In recent years, much of the green energy movement and related investment thesis has focused on solar and wind, among other sources. However, nuclear power is experiencing a rebirth of sorts — one some experts believe brings with it robust long-term investment opportunities.
That’s likely one reason the VanEck Uranium and Nuclear ETF (NLR) has easily outperformed old-guard fossil fuel and renewable energy benchmarks over the past year. During that period, the VanEck fund is higher by 29.3%. While equity markets have hit a rough patch of late, nuclear power’s long-term outlook is something to behold.
Just look at some of the tailwinds that could propel NLR holdings. Nuclear has evolved from a once-derided power source to one that’s essential in the green energy conversation. Plus, nuclear expansion is seen as essential to generating the power needed to advance the artificial intelligence revolution.
Nuclear Power ETF NLR Could Be Ready for Big Things
NLR will turn 17 years old next week. Its best days could be ahead of it. That’s because some experts are forecasting a massive wave of nuclear-related spending in the coming decades.
“We estimate that nuclear renaissance will be worth $ 1.5 trillion (USD) through 2050, in the form of capital investment in new global nuclear capacity,” noted Tim Chan, Morgan Stanley Asia Pacific’s head of sustainability Research. “And the growth globally will be led by China and the US. China will also lead in the investment in nuclear, followed by the US and the EU. In addition, this new capacity will need $128 billion (USD) annually to maintain.”
Adoption of nuclear power by major economies outside the U.S., such as China and India, is another factor that could reward NLR investors over the long term. The same could be true of AI, which has substantial energy needs. Those demands are prompting some concerns in climate change circles and nuclear is one way to allay those fears.
“Nuclear power generators do have a unique opportunity to provide power to data centers that are located on site, and those plants can provide consistent, uninterrupted power, potentially without external connections to the grid,” added Steven Byrd, Morgan Stanley’s global head of sustainability research. “In the US, we believe supercomputers, which are essentially extremely large data centers used primarily for GenAI training, will be built behind the fence at one or more nuclear power plants in the US. Now these supercomputers are absolutely massive. They could use the power, potentially, of multiple nuclear power plants.”
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