Nuclear Energy Has No Equal When it comes to powering the data centers that support AI, nuclear energy has no equal. Electricity that is intermittent could cause a big, expensive mess for data centers. Nukes prevent that problem. They can run continuously for long periods of time without needing maintenance or refueling. Nukes also require a relatively small footprint, compared to renewable energy sources. Theoretically, a square plot of land, 22 miles long on each side, could accommodate enough nuclear reactors to power the entire United States. By comparison, coal-fired power plants would require 50 times more land to accomplish that same task. But this analysis becomes almost comical when you start talking about renewables. Using wind power, for example, to electrify the entire U.S. would require a landmass about the size of Florida and Georgia, combined. Nevertheless, some analysts on Wall Street have criticized the nuclear power deals by Amazon and Microsoft as “too expensive.” But that assessment ignores both the trajectory of the tech industry’s electricity demand and the daunting challenges of meeting that demand. Every critic of the deals should bear in mind that the data center boom is in its infancy, and that as it grows, the competition for electricity could become ferocious. According to BloombergNEF, more than 7,000 data centers are operating or under construction worldwide. These facilities would consume about 508 terawatt hours of electricity per year, if they were to run constantly. That would be more than the total electricity produced in Australia in a year. To be sure, data centers are also exploring non-nuke power solutions. But the sheer volume of incremental electricity demand AI will produce requires a large-scale solution. In 2022, data centers accounted for approximately 1.3% of global electricity demand. But according to Goldman Sachs, data centers will consume more than 4% of the world’s electric power by 2039, and more than 8% of U.S. electric power.  Bottom line: The tech industry’s recent nuclear deals are certainly putting nuclear energy in the spotlight. Uranium to Benefit From Nuclear Demand Although the worldwide tally of operating nuclear reactors has been hovering around the 430-level for three decades, a construction boom is underway. Sixty-two reactors are currently under construction globally, with another 92 on the drawing board. Because of this construction activity, the International Atomic Energy Agency just boosted its annual projection for nuclear power for a fourth successive year. The Agency now expects global nuclear capacity to increase 2.5-fold by 2050. Interestingly, the new, high-profile demand for nuclear power from the tech industry could accelerate the uranium industry’s growth and profitability. The uranium mining industry is not prepared to accommodate growth of that magnitude. Cameco Corp. (CCJ), the largest uranium miner in the Western world, plans to boost output by nearly 5 million lbs. this year. A handful of smaller mining companies are planning to open uranium mining operations over the next few years. But these efforts will not add significant volumes to the market. U.S.-based Uranium Energy Corp. (UEC), for example, opened a uranium-production facility in August that has a licensed production capacity of just 2.5 million pounds. Bottom line: A major supply-demand imbalance is developing in the uranium market, and it will likely push uranium prices significantly higher. So, lofty prices could become the “new normal” in the uranium market. To capitalize on that potential, I recommend investing in the uranium market. In fact, in my recent October issue of Fry’s Investment Report, I recommended a unique energy play that stands to benefit directly from the growth of AI technologies. To learn more about my latest recommendation, click here to learn more about Fry’s Investment Report today. Regards, | 
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