NLR ETF

One of the clearest, most powerful industry-level trends in 2024 was the renaissance of nuclear power and the related equities — one powered in large part by the artificial intelligence (AI) revolution and the technology companies at the center of it. Take the case of the VanEck Uranium and Nuclear ETF (NLR).

Nuclear energy is rapidly emerging as a choice for powering artificial intelligence (AI) systems due to its ability to provide a stable, high-output source of electricity. As AI technologies continue to grow and require more computational power, the demand for reliable energy sources becomes important.

I recommend buying the VanEck Uranium and Nuclear ETF due to surging uranium prices driven by AI's energy demands and low-carbon goals. The ETF comprises 28 nuclear energy and uranium companies, with $772 million in assets and a 0.64% management fee. AI's growth necessitates constant, high-energy data centers, making nuclear energy indispensable and driving uranium prices higher.

There are a variety of unofficial holidays marking various climate and environmental causes. More traditional energy sources, including nuclear, are often overlooked when it comes to celebratory occasions.

During the 28th COP28 Summit, something remarkable happened: Twenty countries have decided to triple their nuclear power production by 2050. The ETF has a high concentration in utilities and lacks significant positions in key uranium miners, reducing its appeal for uranium price gains. I prefer the Sprott Physical Uranium Trust for direct exposure to uranium prices, avoiding the ETF's issues with valuation.

Nuclear energy is experiencing a rebirth and shares of producers of this power source are going along for the ride. Just look at the VanEck Uranium and Nuclear ETF (NLR).

Nuclear energy's resurgence is driven by net-zero targets, AI energy demands, and SMR advancements, making it a compelling investment opportunity. The VanEck Uranium and Nuclear ETF offers exposure to companies in uranium mining, reactor construction, and nuclear infrastructure. Despite past industry challenges, innovations in SMRs and strong support from governments and tech leaders highlight nuclear's growth potential.

With tech giants ramping up their investments in AI, the increasing energy demands of data centers are driving a heightened need for nuclear power, creating an optimistic demand outlook for uranium. To capitalize, look at pure-play uranium ETFs.

Over the past few years, the phrase “nuclear renaissance” has been frequently used. And it's not hyperbole.