War-weary investors are pivoting back to the artificial intelligence (AI) trade with renewed vigour, providing a significant boost to ASX-listed uranium stocks. Following a broader sharemarket sell-off in March amidst the Middle East conflict and surging oil prices, companies like Paladin, Bannerman, and Silex Systems have all seen double-digit rallies in April. This resurgence indicates investors are betting on nuclear power playing a crucial role in meeting the escalating energy demands of data centres, the foundational infrastructure for the AI revolution.
Market observers note that while Middle East tensions initially prompted a general sell-off of risky assets, the focus has now shifted to the technological frontier. Guy Keller, portfolio manager of Tribeca’s Nuclear Energy Opportunities Strategy, observed a “real resurgence on the tech and AI front,” drawing renewed attention to the uranium trade. Sam Berridge, portfolio manager of Perennial’s Natural Resources Fund, added that the “biggest driver for nuclear right now, even bigger than the Iran war, is the forward energy demand for AI,” citing multiple upside surprises in AI capital expenditure expectations. The Philadelphia semiconductor index, tracking major US chip makers, recently capped a record 18 days of gains, underscoring this trend.
On the ASX, Paladin shares have climbed over 10 per cent in the past month, with Bannerman surging 25 per cent and Silex Systems up 18 per cent. Boss Energy also saw a modest 5.5 per cent increase. While Mr Berridge favours Paladin among local listings, he suggested better returns might be found in North America due to more supportive nuclear energy policies. This sentiment is echoed by Mr Keller, who highlighted potential benefits for ASX-listed Peninsula Energy, which holds a US uranium asset, from any further push by the US Department of Energy to secure more uranium.
The US Energy Secretary recently indicated that the first ten new planned nuclear reactors would “almost certainly” receive departmental loans, with significant funds earmarked for nuclear power. US tech companies are also directly investing in small modular reactors to manage energy costs. X-Energy, which designs small modular nuclear reactors and manufactures advanced nuclear fuel, recently saw its share price surge after raising over $US1 billion.
