Uranium: the bubble has burst. But what next?

The uranium spot price bubble has officially burst.

The uranium spot price – which peaked at US$100 per pound in January 2024 – has fallen 33% the past 15 months and now sits at around US$66, according to Cameco. Meanwhile, the long-term contract price has stabilised at around US$80.

Financial speculators and uranium ETFs are to blame.

Uranium is a small commodity, trading roughly US$10 billion a year. (For perspective: copper trades US$1 trillion plus). And uranium miners are smaller than other kinds of miners. As trading volumes of uranium and its miners are small, speculators and ETF flows can set prices.

Speculators – usually hedge funds and other carry traders – can trade uranium on the spot market directly. But uranium ETFs cannot: it is too illiquid to reliably meet the ETF settlement cycle. Instead, ETFs buy the nearest thing: closed ended uranium trusts – like Sprott Physical Uranium Trust (LSE: SPUT) and Yellow Cake (LSE: YCA) – which hold physical uranium. As ETF flows come in, SPUT and YCA buy more pounds of uranium to profit from ETF demand. And so ETF inflows influence uranium prices indirectly like so: ETF inflows → SPUT/Yellow Cake share purchases → spot market uranium purchases.

Trump brings uranium back to life

On 23 May 2025, Trump signed an executive order aimed at getting nuclear reactors built faster and using them to power artificial intelligence (AI) data centres. The order directs the US Army and Department of Energy to build reactors at military and federal sites, with a focus on powering Microsoft, Google, Amazon, and Oracle’s AI data centres.

This move effectively aligns federal energy policy with big tech’s AI needs. In theory, this translates into state-backed demand for uranium, which could support prices and profits for uranium miners. However, the order also includes the release of 20 metric tons of enriched uranium from federal reserves, which increases short-term supply.

Despite this ambiguity, the announcement triggered a short squeeze in uranium equities. ASX-listed uranium miners like Boss Energy (ASX: BOE) and Paladin (ASX: PDN) —which had unusually high short interest in April, even by their standards—rallied sharply as short sellers were forced to cover. Retail investors have also returned to the sector, adding momentum.

Market structure: from backwardation to contango

At the start of 2024, the uranium market was in backwardation—a rare condition where the spot price exceeds future prices. This typically signals tight near-term supply or speculative froth (or both). Given uranium’s high storage costs and the high interest rate environment, backwardation was especially unexpected and killed off carry traders.

Now, the market has returned to contango, where future prices exceed spot prices. This suggests fewer speculators and a return to a more normal market.

What this means for big tech

While uranium miners have enjoyed a short-term boost, the real long-term winners of Trump’s executive order may be big tech. Trump’s executive order gives Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOGL), and Oracle (NASDAQ: ORCL) preferential access to federal nuclear infrastructure. This includes the ability to build their AI data centres on federal land next to government-subsidised nuclear reactors. Putting things bluntly: the executive order is a gift to big tech and constitutes federal subsidy.

Moreover, Trump’s order fast-tracks regulatory approvals for, and encourages the development of, new nuclear technology. This gives big tech a front-row seat in the development of nuclear IP. Microsoft, Amazon and Google are already investing in nuclear startups, including fusion and small modular reactor (SMR) developers. Their interest here is well-known.

Conclusion

The uranium market may have cooled from its speculative highs, but the structural story is far from over. With big tech investing directly in nuclear innovation, an investment in US technology companies now also offers optionality on nuclear energy growth. As the US government gets more directly involved, the sector is entering a new phase—one that could be less volatile, but far more transformative.

A new wave of ETFs

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