The Nuclear Renaissance Has Not Been Canceled, Just Postponed

“Nuclear energy is one hell of a way to boil water.”

–Albert Einstein

April 24, 2025 —

While the launch of DeepSeek and a market downturn may have created a view that the nuclear renaissance is over, its cancellation is unlikely.

To understand why, let’s examine the outlook for nuclear power and see if the recent market selloff is creating a buying opportunity.

Let’s start with the global picture:

Consider that about 60 reactors are still either under construction or planned, and over 120 reactors are proposed globally.

In addition, there have been continued announcements in the last few years of both mine restarts and reactor life extensions.

This demand swell is happening in a backdrop where there is already an ongoing annual supply deficit in uranium production every year.

The secondary supplies from underfeeding from centrifuges in the East and the downgrading of weapons-grade nuclear weapons have largely been mopped up over the prior decade.

Additionally, AI data centers, and other big-tech buildouts are seeing the advantages mount for generating carbon-free 24/7 baseload electricity through nuclear power as part of their broader initiatives.

While this may take longer to play out than initially envisioned, all that growth is still there as a further demand driver on the future horizon.

Reflecting on economics 101: What does it mean if the demand is growing for more nuclear fuels, and yet there is a shortfall in new supply?

It means the nuclear boom is still well underway. But recent events are a reminder that nothing ever moves up or down in a straight line.

The Case for Uranium Remains Strong

There is still a very critical tipping point regarding where all the uranium will come from, just from the current nuclear power demand requirements.

Uranium is the feed source to the nuclear fuel process for both the current reactor demand, as well as the future reactor growth demand.

This presents a true opportunity for the uranium companies that either grow production or go into production over the next several years. It also presents a legitimate investment opportunity for those savvy enough to connect the future dots in this sector.

There are also related ripple effects that are being experienced across the sector. With regards to processing uranium into UF6 and then Low-Enriched Uranium (LEU) as nuclear reactor fuels, there are serious current bottlenecks in this market due to the Western sanctions on Russian supplies and Russia’s export ban to the U.S. of this crucial nuclear fuel.

There are few domestic solutions in the West, with regards to nuclear fuel processing and enriching, and so again, this presents an opportunity for investors willing to get positioned in a longer-term theme.

Having said all of that, today was still a really ugly day in the nuclear stocks and uranium equities.

Today, uranium mining companies, uranium enrichers, nuclear fuel stocks, and small modular reactor stocks were all down significantly.

Upon zooming out, really this whole sector has been under pressure for a number of months. This isn’t just a one-day strong move down… this corrective wave has had legs.

Many investors have finally capitulated in this latest downturn, and are labeling this sector as “dead money,” and rightly so… One can understand the frustration of investors as it has been an overall downwards corrective trend for the uranium equities for many months now, as evidenced by the Sprott Funds Uranium Mining ETF (URNM) chart:

• URNM is down 44% from its peak last May at $58.51, down to today’s close at $32.66.

• URNM had a nice counter-trend rally from that September low of $35.89 up to the October peak at $52.01, but that move happened in just over a month. Investors would need to have been buying that double-bottom dip to capitalize on that brief pop.

• The way URNM pricing has been in early March is substantially below all key moving averages (the 200-day, 144-day, and 50-day Exponential Moving Averages).

• Additionally, this uranium equities ETF made a new “lower low” below the prior double-bottom trough levels of $35.98 in August and $35.89 in September. This is all very bearish action but has been going on for some time now, and the cure for low prices will be low prices…

• Uranium spot pricing has continued to weaken. Even though the spot price only accounts for small one-off transactions, and is not nearly as important as the larger pounds contracted for longer-term offtake pricing agreements; it still has a dramatic effect on investor sentiment and how they trade the equities.

• Other than brief rallies, uranium equities have been a losing sector over the last 9 months. This interests the contrarian investor in me who likes to buy into weakness when prices are actually “low.” [As a reminder for folks reading this that just can’t get past how ugly the price action has been in the uranium equities — it never feels good emotionally or with regards to sentiment to buy any sector or equities when prices are legitimately low and undervalued.]

The issue here is looking for how much lower uranium prices and related stocks will go, when there will be selling exhaustion and capitulation, and then watching for where pricing will base before the next rally.

Nobody knows the answer to that question, but we can know that the pricing in longer-term off-take contracts that uranium companies have been signing and that they are willing to sign is substantially higher than the current spot pricing.

If all the aforementioned supply/demand fundamentals are true for the growing nuclear power sector, then risk to reward valuations are actually getting more attractive (not less so) for investors that can see where this is all heading.

The DeepSeek Challenge

Nuclear stocks were still holding up better than uranium equities, and were continuing to run through the end of last year and into January.

Then when the sailing seemed smoothest, they were torpedoed with the January 27th news regarding the Chinese AI platform DeepSeek. Note that that’s well before President Trump started his tariff policy and well before April 2’s “Liberation Day.”

This potentially energy-cheaper option for AI development threw a metaphorical wrench into the gears of the domestic AI data center dreams.

This news simultaneously dampened the envisioned demand for their electricity requirements, which strongly favored more traditional nuclear power development as well as small modular reactors.

Some analysts see this as a long-term advantage. If the energy costs for AI drop, as the costs of other technologies have dropped over time, such as the microchip, consumers will be able to do more at a lower cost. The end result will still be more energy usage, because of a far higher AI adoption.

On the technical side, however, let’s not mince words. The market for uranium and nuclear plays is ugly out there, and momentum has been continuing to build to the downside.

But remember: one day or even one month doesn’t make a market.

What is more concerning to many investors who track this sector is that the recent selloff has been an acceleration move of a longer correction that has been playing out for many months now.

The commodities sector is notoriously volatile and the uranium space especially so, and perhaps even more so now given its ties to AI growth.

Because this sector can oscillate wildly from bull to bear and back to bull, it is important to make this volatility your friend and capitalize on buying into the dips, and then selling into the rips.

Eventually, either selling or buying becomes exhausted, and those are the inflection points to add to or trim back positions, respectively.

So, while nobody knows when this recent corrective move in the uranium stocks will find a bottom, we can surely say that it is much closer to that bottom after today’s trading than it was back at the prior peaks in May of last year.

If investors thought the longer-term value was present in the bull case for nuclear power and uranium mining last year, at much higher valuations, then while it is painful to see, this current price weakness is actually a much better risk/reward setup for accumulating uranium and nuclear-related stocks at a discount.

In other words, while uranium-related stocks have been slammed down, the long-term view is just as bullish as it was six months ago.

And that means that while things may look ugly right now, it may be time to pick up some of the uranium stocks.

Regards,

Shad Marquitz
Grey Swan Investment Fraternity

P.S. from Addison: Tip o’ the chapeau to Shad for starring in this morning’s Grey Swan Live!

Shad deftly guided us through our natural resource investments, focusing on gold, silver, natural gas, uranium, modular nuclear, oil and coal — all with a sharp eye on the tariff confusion market sell-off and the collapse of the Mag 7 big tech stocks.

Mr. Marquitz is a pro. In addition to being a go-to contributor to Grey Swan, he’s also the host of the Korelin Economics Report. As such, we covered a lot of ground, including specific companies, their ticker symbols, and business strategies for leveraging low price levels in commodities.

Shad delves into big royalty and dividend natural plays, as well.

Plus, Andrew Packer helps put into perspective Shad’s influence on the Grey Swan model portfolio and the special reports we’ve released on each asset class.

It was a great, well-attended session. “Thank you” to you, too, if you were one of the members who joined in and participated.

The spruced-up, edited version of Grey Swan Live! featuring Shad Marquitz will be forwarded to paid-up members as soon as the production team works their magic.

If you’re not currently a member, I urge you to get the most out of your Grey Swan Investment Fraternity by joining asap. You can do so by clicking right here.

Thanks again, Shad!

Add your perspective to the mix here: addison@greyswanfraternity.com