The uranium market could remain strong for several years.
John Ciampaglia, CEO of Sprott Asset Management, believes there is a significant upward trend driven by rising global energy needs, especially as major tech companies expand AI-powered data centers.
“At Sprott, we’ve been discussing uranium and nuclear energy for four years now, and we remain very optimistic about this sector,” he shared on CNBC’s “ETF Edge” recently.
His company manages the Sprott Physical Uranium Trust (SRUUF), recognized as the largest physical uranium fund globally by Morningstar. The fund has seen a 22% increase over the last two months.
Additionally, they oversee the Sprott Uranium Miners ETF (URNM), which has risen nearly 38% in the same time frame. According to the Sprott website, Cameco and NAC Kazatomprom JSC are the fund’s largest holdings as of June 12.
“Uranium is a dependable energy source. It generates no greenhouse gases and has a solid long-term performance history,” Ciampaglia remarked. “It produces substantial electricity, exactly what the grid needs right now.”
Ciampaglia notes a shift in perceptions towards nuclear energy, especially for its energy reliability and low carbon emissions. He described uranium as “extremely energy-dense,” making it an appealing choice for ensuring energy security.
He pointed to the 2022 European energy crisis after Russia’s oil supply disruptions and April’s power outage in Spain and Portugal as reasons for seeking more robust energy alternatives.
“We believe this trend is long-term and will persist,” Ciampaglia stated. “Except for Germany, virtually every nation has returned to nuclear energy, signaling a strong movement towards it.”
‘Dependable Power is Essential’
Jan van Eck, CEO of VanEck, is also actively engaged in the uranium sector.
“Dependable power is crucial,” he emphasized. “These data centers cannot afford even brief downtimes; they must operate continuously.”
His firm manages the VanEck Uranium and Nuclear ETF (NLR), which has seen a rise of about 42% in the last two months. As of June 12, VanEck’s top three holdings are Oklo, Nuscale Power, and Constellation Energy.
However, he cautions about a potential drawback in the uranium market: constructing new nuclear plants can take several years.
“What happens during that time?” Van Eck wondered. “Investors are notoriously impatient.”
Van Eck speculates that the previous administration’s favorable views on nuclear energy might expedite its development.
During the discussion, he brought up nuclear tech firm Oklo, whose stock surged after they announced a potential deal with the Air Force to provide nuclear power to a base in Alaska.
This announcement followed President Trump’s signing of executive orders aimed at revamping the Nuclear Regulatory Commission, accelerating reactor construction, and bolstering the domestic uranium industry.
“Trump oversees federal land, which removes the risk of local opposition to these projects,” Van Eck noted. “They plan to utilize this authority to showcase the safety of new, smaller technologies.”
