Nuclear Power’s Resurgence: A Strategic Shift in Global Energy

A fundamental realignment is underway in the world's energy landscape. Nuclear power is increasingly viewed not as a temporary bridge, but as a core component of the future electricity grid. This structural shift, highlighted in a recent International Energy Agency (IEA) report, is being propelled by soaring electricity demands, particularly from artificial intelligence and expanding data center infrastructure.

The IEA's "Electricity 2026" report outlines ambitious targets, forecasting that nuclear and renewable sources will be responsible for approximately 50% of global power generation by 2030. A key driver is the insatiable energy appetite of technology. According to the IEA, data centers alone are expected to account for nearly half of the growth in U.S. electricity demand. This need for constant, reliable baseload power solidifies nuclear energy's advantage over more intermittent sources.

U.S. electricity consumption climbed by 2.1% in 2025, with annual growth of 2% projected through 2030. In response, global capacity is expanding: Japan is reactivating multiple reactors, France is boosting output, and new plants are under construction across Asia.

Market Dynamics and Supply Concerns

This demand narrative is reflected in commodity markets. Uranium prices have demonstrated significant strength, trading recently at $85.25 per pound—a gain of more than 22% year-over-year. Analysts at Bank of America anticipate further upside, projecting the price could reach $130 per pound by the fourth quarter of 2026.

Beneath these price movements lies a pressing long-term question of supply. Estimates suggest a potential supply deficit could balloon to 1.9 billion pounds by 2045 unless production is scaled up substantially. This underlying scarcity has provided a tailwind for related investments early this year.

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

The VanEck Uranium+Nuclear Energy ETF's Approach

The VanEck Uranium+Nuclear Energy ETF offers exposure to this theme with a distinct strategy. Rather than concentrating solely on mining companies, the fund weights utilities and power producers more heavily. This approach is designed to mitigate the operational risks associated with individual mining projects, focusing instead on the broader nuclear ecosystem.

The fund has benefited from the favorable market conditions, posting a gain of 14.34% since the start of the year.

Key Industry Catalysts on the Horizon

Several near-term developments are poised to influence the sector in the first half of 2026:

• Fee Structure: The ETF's current expense ratio cap of 0.60% is set to expire on May 1, 2026.
• Plant Reactivation: A landmark event for the U.S. industry is the planned return to service of the Palisades nuclear plant in Michigan in early 2026. This represents the first recommissioning of a fully decommissioned plant in the country, providing a stable revenue model for utilities and signaling broader operational viability.
• Government Support: Disbursements from a $2.7 billion U.S. federal fund aimed at supporting domestic uranium enrichment are ongoing, impacting the supply chains of companies within the fund's portfolio.

These milestones collectively underscore the renewed momentum behind nuclear energy as it transitions into a pillar of modern power generation.