Being an essential component in sustainable and reliable energy generation, the growing interest in nuclear energy is driving a bullish outlook for uranium.

As the demand for AI soars and clean energy needs grow, tech giants are turning to nuclear power to fuel energy-hungry data centers to train and operate the large-scale AI models used in today’s generative AI applications.

Role of the Trump Administration in the Nuclear Comeback

With the administration of U.S. President Donald Trump providing strong backing, nuclear energy is set to see a resurgence. Per Oilprice.com, as quoted on ETF Trends, President Trump is likely to back policies that position uranium as a critical mineral for nuclear power.

Future administration policies could include federal subsidies to support uranium mining projects. This aligns with Trump’s vision to establish the United States as a global AI leader, driving demand for nuclear energy.

The U.S. Senate confirmed Chris Wright, a strong proponent of nuclear power, as energy secretary. According to seattlepi, Wright emphasized that winning the AI race requires reliable, affordable electricity and the infrastructure to distribute it efficiently, adding that nuclear power will be key to the solution.

With the United States heavily reliant on Russia and China for uranium, both global leaders in exporting the metal, President Trump is expected to push for reduced dependence amid potential trade tensions with China and the ongoing geopolitical strains with Russia.

Increased Investments to Power Growth

President Trump announced “Stargate,” a $500 billion private-sector investment aimed at building AI infrastructure in the United States. The initiative is proposed to kick off with a data center project in Texas and an initial investment of $100 billion, with total investments expected to reach $500 billion in the coming years.

Per Forbes, Stargate plans to construct up to 20 large AI data centers across the United States, a monumental initiative designed to cement the economy’s status as the undisputed global leader in artificial intelligence.

According to Yahoo Finance, tech giants have committed over $1 trillion to U.S. investments, with Apple leading the charge with a $500 billion pledge. Apple plans to invest this amount over the next four years, focusing on AI server production in the United States and creating approximately 20,000 new jobs.

In late January, CEO Mark Zuckerberg announced Meta’s $65 billion investment in AI-focused projects for 2025, including the construction of a data center, as quoted on Yahoo Finance. Additionally, Microsoft reiterated its plans to invest over $40 billion in U.S. data centers.

Data centers are energy-intensive, with AI applications consuming even more energy than traditional computing. As a result, most tech giants are shifting toward renewable energy to meet their growing energy needs and increasingly exploring nuclear energy as a power source.

Uranium Prices Poised for Liftoff

Bank of America remains bullish on uranium, as quoted on Financial Review, forecasting a price surge of over 50% to $120 per pound this year, with further increases to $135 in 2026 and $140 in 2027. Morgan Stanley also follows suit, reinforcing its bullish stance on uranium, at least for 2025.

Uranium demand is set to rise as AI-driven data centers fuel greater power needs. The World Nuclear Association, as quoted on Oilprice.com, projects reactor demand to increase 28% by 2030 and nearly double by 2040.

Currently well below last year’s peak above $100/pound, uranium is poised for a price surge as demand grows and supply constraints persist. The current low prices present a compelling buy-the-dip opportunity for investors and buyers alike.

Unlike other energy sources, uranium prices have a minimal effect on the overall cost of nuclear power generation, highlighting the inelastic nature of the metal’s pricing. This could result in sustained higher prices without dampening demand, supporting the upward price trajectory of the metal.

Tariffs to Lend a Helping Hand to Price Surges

Tariffs introduced by President Trump further support rising uranium prices. Uranium prices could surge further, thanks to Canadian tariffs, as Canada remains one of the top uranium suppliers to the United States, per ETF Trends.

According to Cameco CFO Grant Isaac, one of the largest publicly traded uranium companies globally, tariffs on Canada could drive up uranium prices by around 10%, as quoted on Mining Weekly. Isaac also added that the broader market could experience higher uranium prices as non-tariff suppliers adjust their rates upward.

ETFs to Consider

Uranium demand is poised to surge as Trump’s AI push and tech giants drive nuclear adoption to power energy-hungry data centers and meet clean energy goals. With an increasing focus on nuclear energy and uranium demand set to substantially grow, uranium ETFs are an appealing strategic portfolio addition for the long term.

Investors can consider Global X Uranium ETF (URA Quick QuoteURA - Free Report) , VanEck Uranium+Nuclear Energy ETF (NLR Quick QuoteNLR - Free Report) , Sprott Junior Uranium Miners ETF (URNJ Quick QuoteURNJ - Free Report) , Themes Uranium & Nuclear ETF (URAN Quick QuoteURAN - Free Report) and Range Nuclear Renaissance Index ETF (NUKZ Quick QuoteNUKZ - Free Report) to capitalize on uranium market's upside potential.

With a one-month average trading volume of about 2.88 million shares, URA is the most liquid option, offering investors easier entry and exit while minimizing the risk of significant price fluctuations, ideal for active trading strategies.

URA has also gathered an asset base of $3.31 billion, having the largest asset base among the other options. Performance-wise, NUKZ outpaced other funds significantly, gaining 16.37% over the past month, with NLR coming in second, adding 9.94% over the past month.

Regarding charging annual fees, URAN is the cheapest option, charging 0.35%, and is more suitable for long-term investing.