The recent market excitement over nuclear power investments by technology companies starved for electricity has spurred a sharp run up in the price of uranium. 

The demand from AI data centers and an increase in related M&A activity have propelled share prices for nuclear power companies sharply higher year-to-date. This push from the tech sector follows years of resurgent interest in the technology which culminated in 22 nations pledging to triple nuclear production in the industry at COP28 last year.

These bullish narratives for nuclear power have driven prices higher for the industry’s underlying commodity: Uranium.

Currently front-month CME uranium futures contracts have pulled back below $83 from a year-to-date peak of over $105 in February — the highest level since 2007. Even after that pullback, the price per pound for the metal has risen by over 70% in two years.

The impact on the industry has been profound with startups like Canadian company NexGen whose management has targeted production levels of 29 million pounds annually by 2030.

As of now, U.S. investors who seek to allocate uranium as a commodity are limited to futures markets. But several ETFs have come to market focused on equities engaged in the nuclear race.

Both the Global X Uranium ETF URA and the Sprott Uranium Miners ETF URNM focused on the stocks of uranium mining companies. The VanEck Uranium and Nuclear ETF NLR includes stocks of nuclear producers as well as miners.

Investors anxious to capitalize on the new nuclear bull market may be wise to reflect on uranium’s history as a speculative investment.

In the three decades following the end of World War II, uranium producers experienced a boom market, culminating in a price bubble during the energy crisis of the 1970s. 

In the wake of OPEC cuts, global economies poured money into nuclear power development driving the price of uranium up by more than 500% during the first half of the 1970s. By 1981, prices had halved as investors soured on the nuclear segment.

Markets spiked again in the mid 2000s with prices reaching $136 per pound during the summer of 2007 as the “peak oil” narrative took hold. Investors again soured on the market after the Fukushima plant crisis in 2011. 

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