1 Nuclear Energy ETF to Buy Hand Over Fist as AI Supercharges Power Demand

The nuclear energy sector is making a big comeback, and VanEck’s Uranium and Nuclear ETF (NLR) is leading the charge with an impressive 17.29% surge in the year to date. This growth comes at a time when the demand for nuclear power is skyrocketing, thanks to the rapid rise of energy-hungry technologies like artificial intelligence (AI). 

Data centers, which are essential for AI and other tech operations, are expected to use around 11% of all U.S. electricity by 2030. In response, companies like Microsoft (MSFT) and Google (GOOGL) have turned to nuclear energy. Microsoft partnered with Constellation Energy (CEG) to restart the Three Mile Island reactor and Google teamed up with Kairos Power to develop small modular reactors (SMRs). 

Globally, the nuclear power market was valued at an estimated $38.84 billion in 2024 and is expected to grow to $44.71 billion by 2029, supported by record investments like the $7 billion poured into nuclear fusion in Q3 2024 alone. The International Atomic Energy Agency (IAEA) has also projected that global nuclear capacity could increase 2.5 times by 2050 in its high-case scenario reinforcing the positive outlooks. 

As AI, electric vehicles, and cryptocurrency mining continue to push power needs to new heights, nuclear energy is proving a reliable and clean solution. This makes ETFs like NLR an exciting option for investors looking to tap into the future of energy.

Overview of the VanEck Uranium and Nuclear Energy ETF (NLR)

The VanEck Uranium and Nuclear Energy ETF (NLR) is a fund that gives investors broad access to the nuclear energy industry. Launched on Aug. 13, 2007, NLR tracks the MVIS Global Uranium & Nuclear Energy Index, aiming to match its performance as closely as possible before fees and expenses. This index includes companies involved in everything from uranium mining to building and maintaining nuclear power plants, producing electricity from nuclear sources, and supplying equipment or services to the industry. By covering all these areas, NLR gives investors exposure to the full nuclear energy supply chain — a smart way to balance risk while tapping into growth opportunities in this rapidly evolving sector.

The ETF’s holdings reflect its wide-ranging approach. NLR’s portfolio includes 29 holdings, with its top 10 making up a significant share of its total assets. At the top is Constellation Energy, which accounts for 10.5%, followed by Public Service Enterprise Group (PEG) at 7.73%. Other key names include BWX Technologies (BWXT), PG&E (PCG), and Cameco (CCJ), all accounting for more than 5%. The portfolio also features Endesa (ELEZY) at 5.13%, Oklo (OKLO) at 5.59%, CEZ AS (CEZ.K.DX) at 5.02%, Fortum Oyj (FOJCY) at 4.2%, and NuScale Power (SMR) at 4.04%. This lineup shows NLR’s global focus on capturing opportunities across the nuclear sector.

This thoughtful diversification has paid off in terms of performance. Over the past year, NLR has risen from a low of $68.42 in August 2024 to a high of $97.89 in October 2024 — a remarkable jump of 37.04%. As of Jan. 23, the ETF has delivered a year-to-date gain of 17%, reflecting growing investor interest and confidence in nuclear energy as a reliable and sustainable power source amid rising global energy demands.

NLR’s market presence reinforces its status as a leader in this space. With assets under management (AUM) of $982.5 million and an average daily trading volume of 772,193 shares, the ETF is highly liquid and attracts both institutional and retail investors alike. These numbers highlight its ability to meet demand from those looking to invest in the nuclear energy revival, especially as AI-driven technologies push energy needs to new heights.

The ETF also has a competitive net expense ratio of 0.61%, or $60 on an initial $10,000 investment, which keeps costs low for investors — an important factor when considering any ETF. 

Catalysts Driving NLR’s Growth

With data centers expected to use about 11% of all U.S. electricity by 2030, there’s an urgent need for clean, reliable energy. AI workloads alone are predicted to push data center energy consumption to 146.2 terawatt hours by 2027. The energy demands of AI are growing incredibly fast — training requirements for AI models are doubling roughly every 100 days. For example, training GPT-4 reportedly used 50 times more electricity than the previous version, GPT-3. And unlike traditional computing systems, AI infrastructure needs to run nonstop, which only adds to the strain on power grids.

Big tech companies are already turning to nuclear power to meet these challenges. Google is working with Kairos Power to build up to seven small modular reactors (SMRs), which could generate 500 megawatts of power by 2035. Meta has also jumped on board, announcing plans to secure 1–4 gigawatts of new nuclear capacity starting in the early 2030s.

Nuclear power is so attractive because it provides steady, carbon-free electricity around the clock. Unlike renewable sources like wind or solar, which depend on weather conditions, nuclear plants deliver constant baseload power — exactly what AI systems need to run smoothly without interruptions. The International Atomic Energy Agency’s estimates that global nuclear capacity could grow by 2.5 times by 2050 isn’t just a prediction; there’s real progress happening right now. Around the world, 63 nuclear reactors are under construction, adding over 70 gigawatts of capacity — the highest level seen since the early 1990s.

The connection between AI and nuclear energy goes even deeper than just power supply. AI is being used in nuclear operations to improve safety measures, optimize reactor designs, and make plants more efficient overall. This partnership between AI and nuclear technology is creating a positive cycle: AI helps advance nuclear energy, while nuclear power ensures AI can continue growing at its current pace. Together, they’re driving a nuclear revival that makes NLR a smart choice for anyone looking to invest in the future of energy.

Conclusion

As artificial intelligence continues to reshape various industries, the demand for clean and reliable energy is on the rise. In this context, nuclear power stands out as a viable solution — offering stability, scalability, and sustainability. The VanEck Uranium and Nuclear Energy ETF (NLR) presents a promising opportunity for investors looking to engage with a sector that is poised for significant growth. With a diversified portfolio and a track record of solid performance, NLR aligns effectively with the energy needs driven by advancements in AI while supporting global decarbonization goals. For those interested in investing where technology meets sustainability, NLR is a compelling choice worth considering.