Key Points
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With President Trump expected to sign an executive order to support the nuclear industry, related stocks are rallying.
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Trump will invoke the Defense Production Act to declare a national emergency due to U.S. dependence on Russia and China for enriched uranium, says CNBC.
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Keep an eye on uranium stocks, and ETFs.
President Trump is expected to sign an executive order to support the nuclear industry. In anticipation, related stocks like Cameco (CCJ) are up about 10% on the day. Uranium Energy (UEC) is up 25%. Paladin Energy (PDN) is up about 6.7%.
As noted by CNBC:
Trump will invoke the Defense Production Act to declare a national emergency due to U.S. dependence on Russia and China for enriched uranium, nuclear fuel processing, and inputs for advance reactors, according to a draft summary viewed by Reuters.
The president is also expected to direct federal agencies to permit and site new nuclear facilities, according to Reuters. He will also order the Departments of Energy and Defense to identify federal land and facilities where nuclear can be deployed and streamline the process to build them, Reuters reported.
Supply and Demand Issues are Also Creating Opportunity
Demand for nuclear energy is coming back strong.
With the global community intensifying its fight against climate change, nuclear energy is quickly emerging as a promising solution. Unfortunately, according to some analysts, there may not be enough supply to go around, as noted by Yahoo Finance.
In addition, as noted by World-Nuclear.org, “Looking ten years ahead, the market is expected to grow. The Reference Scenario of the 2023 edition of the World Nuclear Association’s Nuclear Fuel Report shows a 28% increase in uranium demand over 2023-30 (for an 18% increase in reactor capacity – many new cores will be required).”
The United States is now experiencing a surge in power consumption
Plus, as noted by Deloitte, “After decades of relatively stable electricity demand, the United States is now experiencing a surge in power consumption, driven primarily by the rapid growth of data centers and compounded by industrial modernization. As data centers increase in both size and number, their projected energy consumption is likely to skyrocket, which could place immense pressure on existing energy resources and infrastructure. According to Deloitte estimates, data center electricity demand could rise five-fold by 2035, reaching 176 gigawatts.”
“Nuclear power plants provide firm baseload power, operating 24/7 regardless of weather conditions. Their capacity factor, exceeding 92.5%, outperforms other sources like natural gas (56%) and renewables like wind (35%) and solar (25%). This reliability is important for data centers, helping to ensure uninterrupted operations and maximize return on investments, especially for AI and generative AI applications,” they added.
All of which could benefit from nuclear energy.
With that, while you can always buy individual uranium energy stocks, such as those mentioned above, you can gain better exposure, and pay less with exchange-traded funds (ETFs) such as:
Global X Uranium ETF
With an expense ratio of 0.69%, the Global X Uranium ETF (NYSEARCA: URA) provides investors access to a broad range of companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries.
Some of its top holdings include Cameco, NexGen Energy, Oklo Inc., NuScale Power, Uranium Energy, and Sibanye Stillwater to name a few of its 48 holdings.
Also, since bottoming out at around $20 in April, the URA ETF is now back up to $31.38. From here, we’d like to see it retest $33 a share initially.
Sprott Uranium Miners ETF
With an expense ratio of 0.75%, the Sprott Uranium Miners ETF (NYSEARCA: URNM) invests at least 80% of its total assets in securities of the North Shore Global Uranium Mining Index (URNMX).
The Index is designed to track the performance of companies that devote at least 50% of their assets to the uranium mining industry, which may include mining, exploration, development, and production of uranium, holding physical uranium, owning uranium royalties, or engaging in other non-mining activities that support the uranium mining industry.
Some of its 35 holdings include Cameco, Boss Energy, NexGen Energy, Energy Fuels, Yellow Cake PLC, IsoEnergy, Encore Energy and Ur-Energy to name a few.
Since April, the URNM ETF ran from a low of about $28 to a recent high of $40.44. From here, we’d like to see it retest $46 initially.
Direxion Daily Uranium Industry Bull 2X Shares
With an expense ratio of 3.36%, the Direxion Daily Uranium Industry Bull 2X Shares (NYSEARCA: URAA) seeks daily investment results of 200% of the performance of the Solactive US Uranium and Nuclear Energy ETF Select Index.
Some of its top holdings include Cameco, Uranium Energy Corp, NexGen Energy, Yellow Cake PLC, NuScale Power, and Denison Mines. The ETF also yields pays a quarterly dividend. Its last one for $0.13592 was paid on April 1 to shareholders of record as of March 25.
Since bottoming out at around $9, the URAA ETF ran to a recent high of $20.27. From here, we’d like to see it challenge $24 resistance initially.
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The post Potential Trump Executive Order Sending URA, URNM and URAA Soaring appeared first on 24/7 Wall St..
