As global demand for clean, sustainable energy continues to rise, the spotlight has turned to nuclear power as a critical component of the energy transition. Among the financial instruments gaining traction in this sector are exchange-traded funds (ETFs) and nuclear energy stocks, offering investors a chance to capitalize on the growing nuclear renaissance.
While uranium prices have fluctuated due to supply and demand dynamics, the long-term outlook for nuclear energy remains promising. Governments worldwide are ramping up efforts to shift away from fossil fuels, and nuclear power is playing an increasingly significant role in meeting future electricity needs. From powering artificial intelligence (AI) data centers to supporting electric vehicle (EV) infrastructure, nuclear energy is proving indispensable.
This article dives into the five best nuclear energy stocks and ETFs to consider for your portfolio, shedding light on their potential and the broader nuclear industry landscape.
Why Nuclear Energy is in Demand
The global push for decarbonization has led to renewed interest in nuclear power. Unlike solar and wind energy, which depend on weather conditions, nuclear power provides a reliable and carbon-free source of baseload electricity.
In the U.S., electricity demand is expected to surge, driven by AI computation and EV battery charging requirements. Companies like Microsoft (MSFT), Google (GOOGL), and Amazon (AMZN) are already investing in nuclear power to fuel their data centers.
Outside the U.S., the growth prospects are even brighter. According to the World Nuclear Association, around 60 reactors are under construction across 16 countries, with 90 additional reactors planned and over 300 proposed. This demand shift positions nuclear energy as a cornerstone of the clean energy transition.
Top 5 Nuclear Energy Stocks and ETFs
1. Cameco Corp. (Ticker: CCJ)
YTD Return (as of Nov. 8): 21.9%
Cameco Corp., the world’s second-largest uranium miner, stands as a relatively stable player in the volatile uranium market. While smaller mining companies may offer higher potential returns, they come with significant risks. Cameco, with its diversified investments in nuclear fuel cycle technologies, provides a safer bet for investors.
Additionally, investors hesitant about individual stocks can explore ETFs like:
- Sprott Uranium Miners ETF (URNM): Focuses on large uranium miners.
- Sprott Junior Uranium Miners ETF (URNJ): Offers exposure to smaller, high-risk miners.
For those interested in uranium pricing trends, the Sprott Physical Uranium Trust (SRUUF) provides direct exposure to uranium prices.
2. Centrus Energy Corp. (Ticker: LEU)
YTD Return: 68.7%
Centrus Energy is uniquely positioned in the nuclear market as the only U.S. company licensed to produce high-assay, low-enriched uranium (HALEU). HALEU fuels advanced nuclear reactors and small modular reactors (SMRs), key technologies for the next generation of nuclear energy.
With its manufacturing experience and growing demand for advanced reactors, Centrus is poised to lead the charge in the evolving nuclear energy landscape.
3. NuScale Power Corp. (Ticker: SMR)
YTD Return: 644.4%
NuScale Power specializes in SMRs, an innovative solution for replacing retiring coal plants and meeting increasing electricity demand. These reactors, smaller than traditional ones, are modular and scalable, making them a versatile choice for a variety of applications.
NuScale’s designs have already received certification from the U.S. Nuclear Regulatory Commission, solidifying its position in the emerging nuclear renaissance. As governments prioritize domestic nuclear supply chains, NuScale is well-positioned for significant growth.
4. VanEck Uranium and Nuclear ETF (Ticker: NLR)
YTD Return: 26.6%
For investors seeking diversified exposure to the nuclear energy sector, the VanEck Uranium and Nuclear ETF is a strong contender. This ETF encompasses:
- Uranium mining companies.
- Nuclear facility builders and operators.
- Companies providing nuclear-related equipment and technology.
With an expense ratio of 0.61%, this fund offers a balanced approach to nuclear energy investing.
5. Range Nuclear Renaissance ETF (Ticker: NUKZ)
YTD Return: 42.1%
Similar to the VanEck ETF, the Range Nuclear Renaissance ETF offers diversification across the nuclear supply chain. It includes companies involved in advanced reactors, utilities, construction, and services.
With an expense ratio of 0.85%, NUKZ provides exposure to utilities, which can serve as a defensive investment during economic uncertainty.
The Role of Utilities in the Nuclear Renaissance
Utilities are a critical component of the nuclear energy sector. They not only operate nuclear power plants but also provide stable returns due to consistent electricity demand. Recent developments, such as Constellation Energy Corp. (CEG) restarting a unit at the Three Mile Island nuclear power plant, underscore the growing utility interest in nuclear power.
The U.S. Department of Energy’s $1.5 billion loan to restart Michigan’s Palisades nuclear plant highlights government support for nuclear initiatives, further boosting the sector’s outlook.
The Future of Nuclear Energy and ETFs
As the energy landscape evolves, nuclear power’s role will expand significantly. From meeting the energy demands of data centers and EVs to providing reliable baseload power, nuclear energy is indispensable in the global transition to clean energy.
For investors, ETFs like VanEck (NLR) and Range Nuclear Renaissance (NUKZ) offer diversified exposure to this burgeoning sector, while stocks like Cameco, Centrus Energy, and NuScale provide opportunities to capitalize on individual company growth.
By including nuclear energy stocks and ETFs in your portfolio, you can tap into the potential of a sustainable and profitable future powered by nuclear innovation.
