In recent years, nuclear energy has regained global attention as a low-carbon, efficient energy source, driven by the global energy crisis, the shift towards energy transition, and the rapid development of energy-intensive industries such as artificial intelligence (AI) and data centers. Many countries, including Germany and Japan, have revised their plans to phase out nuclear energy.
Simultaneously, natural uranium, the primary fuel for nuclear power plants, has become a focal point of the energy industry due to rising demand and promising market prospects.
Thanks to policy adjustments, uranium demand has surged, pushing prices to an all-time high. In February of this year, uranium prices reached a historic peak of $81.32 per pound, doubling their value from a year prior. According to data from the World Nuclear Association (WNA), uranium demand from reactors is projected to increase by 28% by 2030 and nearly double by 2040.
Unsurprisingly, the uranium and nuclear energy fund, VanEck Uranium and Nuclear ETF (NYSEARCA:NLR), also recently hit a record high. However, despite an optimistic long-term outlook for the nuclear energy sector, the market appears to have overheated, with a broad selloff in nuclear-related stocks over the past month.
NuScale Power Corp. (SMR)
Small modular reactor (SMR) developer NuScale Power Corp. (NYSE:SMR) saw its stock plunge nearly 30% this month. The selloff began three weeks ago after the company announced an agreement with several brokerage firms to sell up to $200 million in common stock to raise funds. This move alarmed investors and led to a sharp decline in share prices.
However, despite the recent drop, NuScale’s stock has still provided an impressive 634% return over the past 12 months.
Centrus Energy Corp. (LEU)
Similarly, Centrus Energy Corp. (NYSE:LEU), a producer of High-Assay Low-Enriched Uranium (HALEU), has seen its stock price fall by 35% since early November. This decline followed its earlier success when the U.S. Nuclear Regulatory Commission approved Centrus’ application to produce HALEU at its Ohio-based facility. This marked the first such approval in the Western world outside Russia. HALEU will play a critical role in SMR technologies in the future.
Despite the recent dip, Centrus’ stock has risen nearly 50% over the past year.
Uranium Miners and Other Companies
Uranium mining firms were also not spared, with shares of Cameco Corp. (NYSE:CCJ), Uranium Energy Corp. (NYSE:UEC), NexGen Energy (NYSE:NXE), and Energy Fuels Inc. (NYSE:UUUU) experiencing double-digit declines over the past two weeks.
Nuclear-focused startup Oklo Inc. (NYSE:OKLO), founded by Sam Altman, saw its shares drop 21% in the past month, while diversified energy company Constellation Energy Corporation (NASDAQ:CEG) recorded a 13% decline in the last two weeks.
Despite the recent correction in nuclear stocks, the long-term outlook for the sector remains robust.
There is a clear global trend toward a nuclear energy resurgence. According to WNA data, the current worldwide installed nuclear capacity is 396 GW, requiring approximately 67,500 tons of uranium annually. At the COP28 climate conference in 2023, 22 countries signed a declaration to triple nuclear energy capacity by 2050, signaling nuclear energy’s growing role in the global energy mix. WNA projects that global nuclear capacity will reach 686 GW by 2040, requiring an average annual addition of 18 GW over 2025–2040 and nearly doubling uranium reactor demand to 129,900 tU by 2040.
The International Energy Agency’s (IEA) “Electricity 2024” report forecasts that global nuclear power generation will hit an all-time high in 2025. This growth will be driven by new reactor operations in markets like China, India, South Korea, and Europe, France’s resumption of nuclear production, and Japan’s restart of previously halted facilities. This would surpass the sector’s previous peak in 2021.
Nuclear energy remains a critical tool in achieving global energy transition goals and is poised to play a key role for years to come. The recent pullback in the nuclear stock sector may represent a buying opportunity for long-term investors, as the industry is positioned for significant growth.
