1 Uranium ETF to Buy Hand Over Fist

Key Points

• Artificial intelligence (AI) is driving unprecedented energy demand from data centers, which are expected to more than double electricity consumption by 2030, according to the International Energy Agency.

• Nuclear power offers the only scalable, carbon-free solution to meet AI's massive 24/7 energy requirements that solar and wind cannot reliably provide.

• Exchange-traded funds (ETFs) solve the problem of picking individual uranium stocks by providing diversified exposure to the entire nuclear fuel supply chain through a single investment.

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Artificial intelligence (AI) demands energy -- a lot of it. According to the International Energy Agency, data centers powering the AI revolution are expected to more than double their electricity consumption by 2030, reaching 945 terawatt-hours, roughly equivalent to Japan's entire annual electricity usage.

These facilities already account for approximately 2% to 3% of all energy consumption in the U.S., with some estimates reaching as high as 4.4%. Goldman Sachs projects data center power demand could surge 165% by the decade's end.

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The scale is staggering. AI servers consume up to 10 times more power than standard servers, while companies like Microsoft (NASDAQ: MSFT) and Meta Platforms are exploring nuclear power integration into their long-term energy strategies. Microsoft and OpenAI, among other companies, announced plans for the Stargate initiative, a $100 billion project to build advanced data centers powered by next-generation energy sources.

Image source: Getty Images.

This creates an urgent problem: Existing renewable energy sources cannot meet AI's constant power requirements. Data centers need electricity 24 hours a day, 365 days a year, making intermittent wind and solar insufficient.

Nuclear power represents the only scalable, carbon-free solution capable of providing the massive baseload of electricity that AI demands. But selecting individual uranium mining stocks requires extensive research into geopolitics, regulatory environments, and operational complexities that many busy investors simply don't have time to master.

Exchange-traded funds (ETFs) solve this dilemma by offering diversified exposure to uranium companies through a single purchase, eliminating the need to analyze dozens of individual mining operations across multiple countries and regulatory frameworks.

The diversified nuclear play

The Global X Uranium ETF (NYSEMKT: URA) provides comprehensive exposure to companies involved in uranium mining, nuclear component production, and related technologies through 48 holdings that span the entire nuclear fuel supply chain. Rather than betting on a single mining operation or geography, investors gain access to established producers, emerging explorers, and technology companies that benefit from nuclear power expansion.

The fund tracks the Solactive Global Uranium & Nuclear Components Total Return Index, investing at least 80% of assets in companies active in uranium mining, refining, exploration, nuclear equipment manufacturing, and reactor technology development. With $3.8 billion in assets under management, the Global X Uranium ETF offers sufficient liquidity for both individual and institutional investors while maintaining reasonable diversification -- though the top 10 holdings represent 66.9% of total assets, reflecting the concentrated nature of the uranium industry.

The numbers tell an impressive story. The Global X Uranium ETF has delivered a 50.1% year-to-date return through July 2025, though such extraordinary performance reflects the speculative nature of commodity investing and should not be expected to continue. The fund provides a 1.91% dividend yield from underlying mining company distributions, while maintaining a net expense ratio of 0.69% -- reasonable for a specialized sector fund that eliminates the need for costly individual stock research.

The expense ratio represents the annual fee investors pay for professional portfolio management and administration. At 0.69%, the Global X Uranium ETF costs $69 per year for every $10,000 invested, a small price for accessing global uranium expertise and eliminating the substantial research burden of selecting individual mining stocks across multiple countries and regulatory environments.

The nuclear renaissance window

The uranium market stands at an inflection point, driven by the collision of AI energy demands and climate commitments. While renewable energy advocates promise future solutions supported by advancing battery storage technology, nuclear power provides immediate baseload reliability that emerging grid-scale storage cannot yet match at the required scale.

Yes, but uranium investing carries substantial risks. The industry faces geopolitical challenges, as significant uranium supplies come from politically sensitive regions, including Kazakhstan, Niger, and Russia, where sanctions or conflicts can disrupt supply chains. Uranium prices remain notoriously volatile, and mining operations face decades-long development timelines, with regulatory hurdles and operational complexities.

Public opposition to nuclear power persists despite climate benefits, and a single negative incident could shift political sentiment. The uranium mining industry also contends with environmental concerns, permitting delays, and the technical challenges of safely extracting radioactive materials in remote locations worldwide.

Weighing the opportunity

Countries worldwide are recognizing nuclear power's strategic importance. The U.S. plans to triple nuclear power capacity by 2050, while China operates an aggressive nuclear expansion program. This policy shift creates sustained demand for uranium that mining companies cannot quickly address due to decades-long development timelines. Investors should also consider alternatives like the Sprott Uranium Miners ETF (NYSEMKT: URNM) and VanEck Uranium and Nuclear Technologies ETF (NYSEMKT: NLR).

The Global X Uranium ETF captures this entire ecosystem without requiring investors to navigate complex geopolitical risks. When demand growth exceeds supply capabilities, as current AI trends suggest, diversified exposure through the Global X Uranium ETF provides the optimal risk-adjusted approach to capitalize on nuclear power's expansion.

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George Budwell has positions in Microsoft. The Motley Fool has positions in and recommends Goldman Sachs Group, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.