Uranium ETF Leads Gains as Oil & Gas ETF Lags Behind

The Uranium ETF is outperforming, up 2.4% on Wednesday. Components like UR Energy and Uranium Energy are showing strength. The SPDR S&P Oil & Gas Exploration & Production ETF is underperforming, down 2.2%. Components like Kosmos Energy and Civitas Resources are weak performers.

The nuclear energy sector has been experiencing unprecedented growth, driven by policy shifts and increasing demand for electricity, particularly from artificial intelligence (AI) and cryptocurrency applications. This growth has significantly impacted the performance of the VanEck Uranium and Nuclear ETF (NLR), which has surged 44% year-to-date, raising $1 billion in assets this year alone [1].

The VanEck Uranium and Nuclear ETF (NLR) has benefited from diversified holdings beyond traditional uranium mining. Top holdings include NuScale Power Corp. (SMR), PG&E Corp. (PCG), and Nano Nuclear Energy Inc. (NNE). The fund's diversification strategy captures utilities, miners, and emerging small modular reactor companies, contributing to its robust performance [1].

The sector's momentum is further fueled by government initiatives. President Donald Trump's executive order targeting a fourfold increase in domestic nuclear power production over 25 years has provided bipartisan support for nuclear energy, accelerating project timelines across the industry [1].

Constellation Energy Corp. (CEG) announced that Three Mile Island Unit 1 may restart in 2027, one year ahead of schedule, following a power purchase agreement with Microsoft Corp. (MSFT) to supply its energy-intensive data centers. The U.S. Energy Information Administration projects AI and cryptocurrency will drive electricity demand to record levels through 2026, creating sustained demand for baseload nuclear power that renewable sources cannot match [1].

Uranium Energy Corp. (UEC) has launched the United States Uranium Refining & Conversion Corp. (UR&C) to advance American nuclear fuel security and energy dominance. The initiative aims to develop a new state-of-the-art American uranium refining and conversion facility, positioning UEC as the only vertically integrated U.S. company with uranium mining, processing, refining, and conversion capabilities [2].

The SPDR S&P Oil & Gas Exploration & Production ETF (XLE) has underperformed, down 2.2% on Wednesday. Components like Kosmos Energy and Civitas Resources are weak performers, reflecting broader sectoral challenges [1].

References:
[1] https://www.benzinga.com/markets/equities/25/09/47464927/trumps-nuclear-drive-fuels-vaneck-uranium-etf-44-rally-as-microsoft-google-nvidia-chase-ai-powered-energy-boom
[2] https://www.morningstar.com/news/pr-newswire/20250902va62921/uranium-energy-corp-launches-united-states-uranium-refining-conversion-corp-to-advance-american-nuclear-fuel-security-and-energy-dominance