We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Nuclear Energy Charging Up to Power AI: Buy ETFs on Dip?
Read MoreHide Full Article
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.
Impact of AI on Power Demand
AI is poised to drive a 160% increase in data center power demand by 2030, per Goldman Sachs. On average, a ChatGPT query needs nearly 10 times as much electricity to process as a Google search. At present, data centers worldwide consume 1-2% of overall power, but this percentage will likely rise to 3-4% by the end of the decade.
Case for Nuclear Energy
This is where the demand for nuclear energy lies. The world is striving to cut down on carbon emissions, and consumers and corporations are opting for cleaner versions of energy. However, unlike other renewable sources, which can be intermittent, nuclear energy offers a consistent solution. Additionally, advancements in nuclear technology, such as small modular reactors, are making it more adaptable and safer for widespread use.
Will Republicans Back Nuclear?
Banking behemoths, including Bank of America (BAC - Free Report) , Citi (C - Free Report) , and Morgan Stanley (MS - Free Report) recently pledged for the goal of tripling nuclear power. While Democrats have been more hesitant to support it due to environmental concerns, most Republicans have been pro-nuclear. And with Republican winning the U.S. election, we can expect more nuclear energy production to power AI, going forward.
Inside the U.S. Power Grid's Challenges
States such as Georgia, Arizona, and Texas are already struggling to meet rising electricity needs. The growing demand from AI and data centers increases this challenge. Nuclear energy offers the only scalable solution to ensure the U.S. power grid can handle future demands effectively..
Big Tech’s Rush to Nuclear Energy Suppliers
Recent deals by giants like Microsoft, Amazon and Google with U.S. suppliers to purchase nuclear power indicate their commitment to utilizing low-carbon electricity to energize their AI data centers. According to CNBC, Google GOOGL recently announced plans to buy power from a fleet of small modular reactors (SMRs) developed by Kairos Power, stating that its first nuclear reactor from Kairos Power is expected to be operational by 2030, with additional reactors coming online by 2035.
Microsoft also followed suit, as quoted on CNBC, signing an agreement with U.S. energy firm Constellation (CEG - Free Report) recently, to revive a dormant reactor at the Three Mile Island nuclear power plant in Pennsylvania. Amazon, too, recently announced a $500 million deal with Dominion Energy (D - Free Report) to explore the development of a small modular reactor near Dominion’s North Anna nuclear power station, per CNBC.
Time to Tap Uranium ETFs?
Being an essential component in sustainable and reliable energy generation, the growing interest in nuclear energy has led to an optimistic outlook for Uranium. But the supply of uranium is in crunch.
Kazakhstan, the leading uranium producer globally, accounting for approximately 45% of global production, recently announced a 17% cut in its forecasted production for 2025.
Investors can thus use the following pure-play uranium-related exchange-traded funds (ETFs) to capitalize on the latest growth trajectory. Notably, these ETFs are down past month as chip giants (the backbone of AI) have underperformed during that timeframe.
Profit booking, downgrades of some chip biggies by analysts, China’s probe for chip giant NVIDIA, some subdued earnings results — weighed on the chip space. Since uranium now falls in the AI investing periphery, this dip can be an entry point to the below-mentioned ETFs.
VanEck Uranium and Nuclear ETF (NLR - Free Report) – down 1.8% past month (as of Dec. 5, 2024)
Global X Uranium ETF (URA - Free Report) – down 0.5% past month
Sprott Uranium Miners ETF (URNM - Free Report) – down 0.3% past month
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Nuclear Energy Charging Up to Power AI: Buy ETFs on Dip?
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.
Impact of AI on Power Demand
AI is poised to drive a 160% increase in data center power demand by 2030, per Goldman Sachs. On average, a ChatGPT query needs nearly 10 times as much electricity to process as a Google search. At present, data centers worldwide consume 1-2% of overall power, but this percentage will likely rise to 3-4% by the end of the decade.
Case for Nuclear Energy
This is where the demand for nuclear energy lies. The world is striving to cut down on carbon emissions, and consumers and corporations are opting for cleaner versions of energy. However, unlike other renewable sources, which can be intermittent, nuclear energy offers a consistent solution. Additionally, advancements in nuclear technology, such as small modular reactors, are making it more adaptable and safer for widespread use.
Will Republicans Back Nuclear?
Banking behemoths, including Bank of America (BAC - Free Report) , Citi (C - Free Report) , and Morgan Stanley (MS - Free Report) recently pledged for the goal of tripling nuclear power. While Democrats have been more hesitant to support it due to environmental concerns, most Republicans have been pro-nuclear. And with Republican winning the U.S. election, we can expect more nuclear energy production to power AI, going forward.
Inside the U.S. Power Grid's Challenges
States such as Georgia, Arizona, and Texas are already struggling to meet rising electricity needs. The growing demand from AI and data centers increases this challenge. Nuclear energy offers the only scalable solution to ensure the U.S. power grid can handle future demands effectively..
Big Tech’s Rush to Nuclear Energy Suppliers
Recent deals by giants like Microsoft, Amazon and Google with U.S. suppliers to purchase nuclear power indicate their commitment to utilizing low-carbon electricity to energize their AI data centers. According to CNBC, Google GOOGL recently announced plans to buy power from a fleet of small modular reactors (SMRs) developed by Kairos Power, stating that its first nuclear reactor from Kairos Power is expected to be operational by 2030, with additional reactors coming online by 2035.
Microsoft also followed suit, as quoted on CNBC, signing an agreement with U.S. energy firm Constellation (CEG - Free Report) recently, to revive a dormant reactor at the Three Mile Island nuclear power plant in Pennsylvania. Amazon, too, recently announced a $500 million deal with Dominion Energy (D - Free Report) to explore the development of a small modular reactor near Dominion’s North Anna nuclear power station, per CNBC.
Time to Tap Uranium ETFs?
Being an essential component in sustainable and reliable energy generation, the growing interest in nuclear energy has led to an optimistic outlook for Uranium. But the supply of uranium is in crunch.
Kazakhstan, the leading uranium producer globally, accounting for approximately 45% of global production, recently announced a 17% cut in its forecasted production for 2025.
Investors can thus use the following pure-play uranium-related exchange-traded funds (ETFs) to capitalize on the latest growth trajectory. Notably, these ETFs are down past month as chip giants (the backbone of AI) have underperformed during that timeframe.
Profit booking, downgrades of some chip biggies by analysts, China’s probe for chip giant NVIDIA, some subdued earnings results — weighed on the chip space. Since uranium now falls in the AI investing periphery, this dip can be an entry point to the below-mentioned ETFs.
VanEck Uranium and Nuclear ETF (NLR - Free Report) – down 1.8% past month (as of Dec. 5, 2024)
Global X Uranium ETF (URA - Free Report) – down 0.5% past month
Sprott Uranium Miners ETF (URNM - Free Report) – down 0.3% past month