The AI Energy Crunch: How Nuclear Power is Gaining Strategic Importance

The relentless expansion of artificial intelligence infrastructure is forcing a fundamental shift in how major technology companies source their power. With wind and solar often unable to meet the massive, constant baseload demands of modern data centers, nuclear energy is re-emerging as a cornerstone of corporate energy strategy. Investment vehicles like the VanEck Uranium+Nuclear Energy ETF are positioned at the intersection of this technological demand and the need for stable, carbon-free electricity generation.

This ETF distinguishes itself from pure-play uranium mining funds through its diversified approach. It tracks the MVIS Global Uranium & Nuclear Energy Index, providing balanced exposure to both mining operators and the utility companies that own and run nuclear reactors. Holdings such as Constellation Energy and Cameco exemplify this dual strategy.

This structure is designed to mitigate the extreme price volatility historically associated with the uranium spot market. The fund’s total expense ratio is capped at 0.56%, with fee waivers in place until at least May 2026. The sector is also receiving significant policy support; the state of New York, for instance, plans a major expansion of its nuclear fleet to eight gigawatts, a move that reduces regulatory pressure for extending the licenses of existing reactors.

Hyperscalers Drive Long-Term Demand

The current momentum in the nuclear sector is largely propelled by long-term power purchase agreements between hyperscale data center operators—including Meta, Amazon, and Google—and major nuclear power providers. A key example occurred in January, when Meta secured over 2,600 megawatts of capacity for its Ohio and Pennsylvania operations through a 20-year agreement with Vistra Corp.

Should investors sell immediately? Or is it worth buying VanEck Uranium+Nuclear Energy ETF?

The critical question is whether utility providers can sustainably meet this colossal new demand from the tech industry. For companies within the ETF’s portfolio, these contracts provide substantial revenue visibility that extends far beyond mere speculation on uranium commodity prices. Reflecting growing institutional interest, the fund's assets under management have swelled to approximately $4.6 billion.

Key Events and Recent Performance

Despite its favorable strategic positioning, the ETF's share price has recently undergone a correction, declining roughly 10.37% over a seven-day period. Nevertheless, with a current price of $142.01, it maintains a year-to-date gain of 6.74%.

Several upcoming events in February and March could influence the sector's trajectory:
* February 18-19: Quarterly earnings from heavyweight Constellation Energy (CEG), with analyst focus expected on new data center partnership developments.
* February: Further details regarding the implementation of $2.7 billion in U.S. government funding dedicated to domestic uranium enrichment.
* March 13: Announcement of the next index rebalancing, which will be enacted on March 20.