URAA Taps Into Rising Uranium Demand Amid Booming Interest In AI And Nuclear

Among the rising demand for critical minerals is a surge in uranium mining stocks that corresponds to advancements in artificial intelligence (AI) and a push for greater use of nuclear energy. Many people are viewing nuclear energy as a viable source due to its low greenhouse gas profile while also delivering the highest capacity. Essential to nuclear energy is uranium, a heavy metal that can be used as an abundant source of concentrated energy for nuclear reactors.

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Growing Demand And Limited Supply

According to the World Nuclear Association, Kazakhstan is the world's largest producer of uranium, supplying approximately 40% of the world's mined uranium. In 2023, as reported by the Financial Times, approximately two-thirds of sales by Kazakhstan's state-owned mining group, Kazatomprom, went to buyers domiciled in Russia, China and the home market. Kazatomprom's January 2025 investor handout noted that 45% of 2023 regional sales were in Asia. With an increasing amount of uranium being sent eastward, understanding the U.S.'s domestic uranium mining capabilities has come to the forefront.

As the U.S. Energy Information Administration (EIA) reported, in 2023, U.S. nuclear generators used 32 million pounds of imported uranium concentrate (U₃O₈) and only 0.05 million pounds of domestically produced U₃O₈. Imports of U₃O₈ came from Canada, Australia, Russia, Kazakhstan and Uzbekistan. 

The Trump administration has indicated more significant support for the domestic uranium mining industry, gleaned from the president's executive order declaring a national energy emergency. Furthermore, in 2024, the Department of Energy received $2.7 billion in congressional funding to help revive domestic fuel production for commercial nuclear power plants.

Simply put, the U.S. is making strides to develop domestic uranium capacity, lowering dependence on foreign supply. Regarding future demand for uranium, the World Nuclear Association estimates a 28% increase over 2023-2030. Demand thereafter will depend on new nuclear plants being built and the rate at which older plants are retired. For the decade 2031 to 2040, uranium demand is estimated to increase by 51%.

The Impact Of Trade And AI On Uranium Prices

Recently, uranium prices hit an all-time high due to the increasing energy demand associated with artificial intelligence data centers, which is driving increased demand for nuclear fuel. As reported by the Financial Times, prices for enriched uranium have hit $190 per separative work unit – the standard measure of the effort required to separate isotopes of uranium – compared with $56 three years ago. With many big tech firms beginning to prioritize nuclear power as an energy source, this has resulted in a price increase for uranium.

However, rising trade tensions are poised to impact uranium prices. In a recent earnings call, Grant Isaac, CFO of Cameco CCJ, one of the world’s largest publicly traded uranium companies, noted that a proposed 10% U.S. tariff on Canadian energy products, including uranium, could lead to significant price inflation in the global uranium market. President Trump's tariffs on Canada are currently in play. As reported by the EIA, approximately 27% of the U.S.'s imported uranium comes from Canada.

Renewed Interest In Nuclear

The increasing demand for electricity has put nuclear energy back in the spotlight. As reported by Bloomberg, there are 61 nuclear power plants under construction globally. Another 90 or so are in the planning stage and more than 300 have been proposed. The proliferation of nuclear plants will require more uranium to be readily available for use. With more nations building nuclear plants as a viable energy source, the demand for uranium is expected to continue to increase. 

Trading Uranium With Direxion

For short-term traders looking to gain comprehensive exposure to companies involved in the uranium industry, Direxion's Daily Uranium Industry Bull 2X Shares (URAA) offers enhanced, pure-play exposure to companies involved in the uranium mining industry, which may include mining, exploration, development and production of uranium, or holding physical uranium, owning uranium royalties or engaging in other, non-mining activities that support the uranium mining industry.

URAA is a leveraged ETF designed to track 200% of the daily performance of the Solactive United States Uranium and Nuclear Energy ETF Select Index, before fees and expenses. For investors who are bullish on the uranium industry, this ETF presents a way to engage with seminal companies and participate in their growth patterns. This ETF is best suited for those who can actively manage the inherent risks of leverage and are looking to attempt to capitalize on short-term trends occurring in the uranium industry, and as such, should not be held for more than a day.

Featured image by Ajay Pal Singh Atwal on Unsplash.

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An investor should carefully consider the Fund's investment objective, risks, charges, and expenses before investing. The Fund's prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain the Fund's prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. The Fund's prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in the Fund involves risk, including the possible loss of principal. The Fund is non-diversified and includes risks associated with the Fund concentrating its investments in a particular industry, sector, or geography which can increase volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause prices to fluctuate over time.

Leverage Risk – The Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund's correlation with the Index and may increase the volatility of the Fund.

Daily Index Correlation Risk – A number of factors may affect the Fund's ability to achieve a high degree of correlation with the Index and therefore achieve its daily leveraged investment objective. The Fund's exposure to the Index is impacted by the Index's movement. Because of this, it is unlikely that the Fund will be perfectly exposed to the Index at the end of each day. The possibility of the Fund being materially over- or under-exposed to the Index increases on days when the Index is volatile near the close of the trading day.

Nuclear Energy and Uranium Mining Companies Risk – The price of uranium may be affected by changes in inflation rates, interest rates, monetary policy, economic conditions and political stability. The exploration for uranium and development of uranium mines involves significant financial risks over a significant period of time, which even a combination of careful evaluation, experience and knowledge may not eliminate.

Energy Sector Risk – Energy sector securities may be adversely impacted by changes in the levels and volatility of global energy prices, global supply and demand, and capital expenditures on the exploration and production of energy sources.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Leverage Risk, Market Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Daily Index Correlation Risk, Other Investment Companies (including ETFs Risk), Cash Transaction Risk, Passive Investment and Index Performance Risk. Please see the summary and full prospectus for a more complete description of these and other risks of the Fund.Distributor: ALPS Distributors, Inc.