October 23, 2024
Boom! The Uranium Switch Just Flipped!
Dear Subscriber,
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| By Sean Brodrick |
Uranium stocks are stepping higher.
Uranium industry kingpin Cameco (CCJ) just zoomed more than 60% off its September low. Meanwhile other, smaller uranium stocks are making even more significant gains.
What’s going on? It’s like a switch was flipped in the uranium industry.
Only it’s more like three switches.
I covered it in my presentation last week at the Orlando MoneyShow. Here’s what sparked uranium’s latest uptick …
We’ve seen three of Earth's biggest corporations suddenly shift to backing nuclear power. And this all happened in the space of a month!
- Microsoft (MSFT) started it in September when it signed a deal with Constellation Energy (CEG). Constellation will restart an 835-megawatt nuclear reactor at Three Mile Island to power Microsoft AI data centers in the mid-Atlantic. What’s more, Microsoft is paying at least 100% over market rates, according to analysis by Morgan Stanley.
- Then, in October, Alphabet/Google (GOOG) said it would buy power from small modular reactor (SMR) developer Kairos Power. Alphabet plans to buy power from a fleet of nuclear reactors made by Kairos, the first of which will come online in 2030. Alphabet will use this electricity to power data centers. In total, 500 megawatts will be added to the grid. The theory is that SMRs are a more cost-effective way to scale up nuclear power.
- Then, a few days later, Amazon.com (AMZN) announced it inked a deal with Dominion Energy (D) to explore the development of a small modular nuclear reactor near Dominion’s existing North Anna nuclear power station. Amazon needs the extra juice for its cloud computing and data centers. This is just part of a larger $500 million investment that Amazon is making in nuclear power. The SMRs will be developed with technology from Maryland-based X-energy.
Combined, the three announcements could account for more than 5,000 megawatts of power by the late 2030s with the possibility of more.
And last spring, Amazon’s AWS invested in an atomic energy project with Talen Energy (TLN).
That deal will allow AWS to purchase nuclear power from Talen’s existing Susquehanna Steam Electric Station, a nuclear power station in Pennsylvania.
AWS also purchased the adjacent, nuclear-powered data center campus from Talen for $650 million.
Atomic Investment Trends
Why are these companies making these investments in nuclear power? Because the world is using a lot more electricity.
Global electricity demand grew at 2.2% a year, but now that’s projected to rise to 3.4% annual growth.
Data centers like the ones owned by these big companies are a major new source of electricity demand. The International Energy Agency forecasts that data centers’ total electricity consumption could DOUBLE from 2022 to 2026.
If new power sources aren’t added as electricity demand increases, the U.S. risks more brownouts or even blackouts.
And that’s why these big companies are suddenly all-in on nukes.
Why not use more solar, wind and other renewables? The world is using a lot more “green” energy, after all.
Well, in some cases, it’s unreliable. It just doesn’t scale the way nuclear does. And you don’t want to be the head of a data center that can’t keep the power on!
What this really does is add growing demand to nuclear power, which is already facing a global supply/demand squeeze.
In this next chart, the yellow area represents projected nuclear reactor requirements. The bars are global supply struggling to keep up with that demand …
The gap between supply and demand will be filled by stockpiled material — for a while.
At some point, the supply/demand squeeze will get critical. And that’s GREAT news for a whole bunch of uranium producers.
They’re waking up, taking strides and ready to run.
And remember, nuclear power requires long-term planning. These trends will stay in place for YEARS to come.
4 Ways to Invest
So that’s the good news. The better news is that I’ve already recommended some of the best uranium stocks to my Resource Trader Members, and they’re racking up open gains.
And I’ve got great news for you, too: There are FOUR easy ways to play this move. I’m talking about ETFs.
All uranium ETFs are not created equal, which means you have some choices.
The Sprott Junior Uranium Miners ETF (URNJ) holds a basket of up-and-coming uranium companies.
Sprott Uranium Miners ETF (URNM) has some of the same stocks as URNJ but also includes some of the biggest companies at home and abroad.
The Global X Uranium ETF (URA) holds miners, industrial companies that make reactor components and some lithium and battery metal companies.
VanEck Uranium and Nuclear ETF (NLR) holds miners, utilities and industrials with nuclear exposure.
Which one you use is up to you. The flip has switched in nuclear, and all lights are green.
Are you ready to power up with an atomic portfolio?
All the best,
Sean
P.S. My colleague Juan Villaverde is just as fascinated with market cycles as I am. So much so, he even created the now-famous Crypto Timing Model to help readers like you trade on its signals.
Well, Juan’s model is starting to flash one of its strongest trading signals. But the only way to find out what that means and how to play it is to come to next week’s special event.
This opportunity is so huge, Chris Graebe decided to join Juan to ask him all about the “Golden Window” that’s opening soon. You can grab your own VIP seat here.
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