Nuclear ETFs gain 22% as AI data center demand fuels reactor deals

The VanEck Uranium and Nuclear ETF (NLR) has climbed 22.94% over the past year to $125.64 as Microsoft, Amazon, Google and Nvidia signed reactor deals to power AI data centers that cannot tolerate solar or wind intermittency. The fund's top holdings — Constellation Energy, Cameco and BWX Technologies — sit on the other side of those power purchase agreements.

"Hyperscalers writing checks for AI data center power are not signing solar agreements — they are signing reactor deals," said Craig Irwin, analyst at Roth Capital Partners, in a research note initiating coverage of Nano Nuclear Energy with a buy rating and a $45 price target implying 60% upside.

Global electricity demand grew by 849 terawatt-hours in 2025, according to the International Energy Agency, while hyperscalers including Amazon and Nvidia have pledged at least $700 billion combined to construct AI data centers. Nano Nuclear's KRONOS micro-modular reactor, designed to generate 15 megawatts using a high-temperature gas-cooled design with meltdown-resistant enriched uranium fuel, offers a differentiated power solution that gives the company an edge over competitors, Irwin wrote.

The structural shift matters because solar and wind cannot deliver the 24/7 baseload that AI training clusters require. The Invesco Solar ETF (TAN), the default vehicle for clean-power exposure, holds panel manufacturers and residential installers that are not counterparties on hyperscaler power contracts. NLR, by contrast, spans utilities, uranium miners and engineering firms that supply the deals big tech is signing. The Sprott Uranium Miners ETF (URNM) has gained 38.17% over the past year, while the Range Nuclear Renaissance Index ETF (NUKZ) is up 32.39%, offering higher-beta exposure for investors seeking concentrated uranium plays.

Reactor Technology and the Competitive Landscape

Nano Nuclear's KRONOS MMR targets a market that is accelerating faster than many analysts anticipated. The 15 MWe design uses high-assay low-enriched uranium (HALEU), enriched to 19.75% compared with 3% to 5% for conventional reactors, enabling longer fuel cycles and smaller core sizes. That makes it suitable for colocation with data centers where land and grid interconnection are constrained.

The company faces competition from Oklo and NuScale Power, both of which are developing small modular reactor designs for similar applications. Oklo's Aurora design targets 15 MWe as well, while NuScale's VOYGR platform offers 77 MWe per module. The key differentiator is timeline: Nano Nuclear is making rapid progress toward commercialization, according to Roth Capital, while NuScale's first operational deployment remains years away and Oklo has yet to secure a construction permit from the Nuclear Regulatory Commission.

Investment Implications and Valuation Context

For investors who bought TAN as an AI-adjacent energy play rather than a pure solar bet, NLR is the more direct expression of what hyperscalers are actually building. A rotation from TAN to NLR in a tax-advantaged account is straightforward; in a taxable account, a partial rotation preserves clean-energy diversification while testing the nuclear thesis.

Nuclear remains sentiment-driven and volatile. NLR is down 2.83% over the past month even after its multiyear run, and one analyst warned in December 2025 that the rally had outrun fundamentals. Projects like Google's Kairos partnership are targeted for 2030, not next quarter. Still, with five of six analysts covering Nano Nuclear rating it a buy or strong buy, according to LSEG data, the market is pricing in a structural shift in how AI infrastructure gets powered.

This article is for informational purposes only and does not constitute investment advice.