The nuclear energy sector is experiencing a powerful revival, driven by macroeconomic shifts and technological innovation. For financial advisors and investors, understanding these trends is key to identifying investment opportunities as the nuclear energy landscape evolves.
A recent poll of financial advisors confirms that interest in the “nuclear renaissance” investment case is driven by several distinct tailwinds. When asked what they find most interesting about the sector, the responses revealed enthusiasm for new technology, built upon an appreciation for the fundamental benefits of nuclear power.
VettaFi recently sat down with Range Fund Holdings founder and CEO Tim Rotolo to discuss the exciting investment opportunity for nuclear energy. He brings unique expertise in this area, having founded North Shore Indices, which launched the uranium mining index URNMX in 2019.
Summary The nuclear energy universe spans from uranium mining to developers of advanced reactors to utilities generating electricity from nuclear reactors, with very different risk profiles across the value chain. Given the diversity of nuclear-related stocks, index construction is particularly important for investors looking to access the space through an ETF.
Summary: Energy security came into focus after Russia's invasion of Ukraine drove a global energy crisis with an acute impact in Europe. Energy policy is focused on ensuring reliable and affordable power, especially as electricity demand grows, including from AI data centers.
While the renewable energy picture has darkened with the Trump administration's shift in policy priorities, electricity demand has done the opposite. AI-driven data center usage and construction is perhaps the key market narrative right now, representing a huge swathe of the year's economic activity.
Electricity demand is on the rise globally thanks to electrification, adoption of electric vehicles, wider use of air conditioning, and the rise of AI-related data centers. In the U.S., data centers are expected to drive roughly half of the overall increase in power demand to 2030, according to the International Energy Agency (IEA).
Electricity demand is ramping up considerably, as data centers proliferate to keep up with AI processing power demands. Of course, data centers are not the only driver of the ravenous demand for electricity, but taken together, that electricity demand can create some powerful investment opportunities.
Nuclear energy is experiencing a revival, driven by artificial intelligence energy consumption and loosening U.S. regulation, creating a strong catalyst for sector growth. The Range Nuclear Renaissance ETF (NUKZ) offers targeted exposure to leading nuclear value chain companies, returning 73% in the past year and 124% since inception. I am initiating a buy rating for NUKZ, recommending a small portfolio allocation for long-term, risk-tolerant investors seeking exposure to nuclear's resurgence.
NUKZ offers focused exposure to the nuclear renaissance, with strong YTD momentum and a reasonable valuation below the S&P 500's P/E. The ETF benefits from AI-driven power demand, policy tailwinds, and 39% foreign stock exposure, enhancing its growth potential. Despite high volatility, low yield, and liquidity concerns, NUKZ's technicals and institutional interest suggest a bullish breakout is likely.
While investors have generally been cautious regarding green energy since the presidential election last November, the Trump administration has recently provided multiple signals that it intends to boost domestic nuclear energy by a significant amount. In May, the president signed a series of executive orders aiming to facilitate the construction of nuclear plants on public lands, grow U.S. uranium mining operations, and, controversially, revisit exposure limits for ionizing radiation.
The Range Nuclear Renaissance Index ETF has outperformed the S&P 500, returning 80% since its debut, driven by strong political tailwinds and regulatory changes. The 'Nuclear Thesis' posits that nuclear power is essential for meeting clean energy goals, with advanced reactor designs addressing traditional nuclear power issues. Chris Wright, the new U.S. Secretary of Energy, supports nuclear power, aiming to reduce regulatory barriers, benefiting NUKZ's holdings like OKLO, CEG, CCJ, LEU, and SMR.