The Global X Uranium ETF (URA) has bounced in the past few months as investors predict a renaissance in the nuclear energy industry. After dropping to a low of $22.76 on August 5, the fund has rebounded by over 42%, and is nearing its all-time high of $33.65.

Nuclear energy demand

The Global X Uranium ETF has rallied as the prices of uranium continued rising. Data by Markets Insider shows that uranium has risen from $78 in August to $82.95 today.

Still, unlike in 2023 when uranium prices soared, they have come under intense pressure, this year as they dropped from $105 to a low of $78. 

This rebound happened as investors predicted that the nuclear energy industry will continue doing well in the next few years. 

For example, we recently wrote that Microsoft had reached a deal with Constellation Energy, a large utility company in the US. The agreement is that the firm will restart the Three Mile nuclear energy plant to supply the company with reliable energy for its data center. 

Analysts expect that Microsoft will pay Constellation between $110 and $115 per megawatt hour in the 20-year long-term deal.

Microsoft is not the only company working on the nuclear energy. This week, Google inked a deal with Oklo, a company affiliated with Sam Altman to develop small modular nuclear power plants in the US. 

Therefore, most nuclear power stocks have surged, with some of them hitting their all-time high.

For example, the Oklo stock price has soared by over 56% this year, outperforming the S&P 500 and the Nasdaq 100 indices.

Better still, NuScale shares have surged by 480% this year, outperforming popular brands like Nvidia and MicroStrategy. It has moved from a small company to a large one valued at over $3.3 billion. Uranium Energy Corp and Uranium Royalty have also surged by double digits. 

The URA ETF has also surged after the Department of Energy approved the conceptual design for Oklo’s Aurora Fuel Fabrication Facility. As part of the approval, Oklo received 5 metric tons of high-assay low-enriched uranium (HALEU) and used nuclear fuel.

Analysts believe that the small modular nuclear power plants will be the ket driver for nuclear energy in the next few years. For example, Rolls-Royce Holdings is working on these plants in the UK.

Uranium demand and supply metrics

The challenge for uranium is that supply and demand metrics mean that uranium prices may remain under pressure for a while. 

According to the Energy Information Agency (EIA), the domestic uranium market is expected to grow in the US. Mining production is expected to keep growing this year as the number of development holes dug rising to 1,930 last year, from 260 in 2021.

Global production is also expected to continue rising as many of the idled mining locations come back online. A few years ago, mining operations in Kazakhstan almost dried as prices dropped.

Other suppliers like Australia, Namibia, and Uzbekistan have also increased their production as demand rises. For example, Australia is expected to export over 8,000 tonnes by 2028, a big increase from the 4,933 tons it sold in 2022.

URA is a top uranium ETF

URA is one of the best approaches to invest in uranium. Unlike popular commodities like crude oil and natural gas, it is not offered by most brokers, making it highly difficult to invest in it. 

URA, therefore, gives access to uranium by investing in the biggest producers and Sprott Physical Uranium Fund. 

Cameco, the biggest uranium company, is a key player in the fund. Its stock has soared by over 54% in the last 12 months, helped by its strong performance and hopes of higher uranium prices.

The other top players in the URA ETF are Nexgen Energy, NAC Kazatog-Regs, Paladin Energy, Denison Mines, Mitsubishi Heavy, and OKLO.

URA ETF analysis

The weekly chart shows that the URA ETF has staged a strong comeback in the past few days, helped by the strong sentiment in the market. 

It has soared from $22.84 in August to $32.35, and is nearing its record high of $3364. The stock has also risen above the key resistance point at $28.05, its highest point in November 2021.

URA has also moved above all moving averages, while the Relative Strength Index (RSI) and the MACD indicators have pointed upwards. 

Therefore, the stock will likely continue rising as bulls target the next key point at $33.65, its highest point on May 24th. A move above that level will point to more gains since it will invalidate the double-top pattern that has been forming. If this happens, it will point to more gains, with the next point to watch being at $40. 

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Hyundai Motor Co.’s Indian arm is experiencing a rocky start as its monumental $3.3 billion initial public offering (IPO) struggles to captivate investor interest amid a challenging market landscape.

In just two days, Hyundai Motor India Ltd. has managed to secure only 42% of the shares available in this landmark IPO—the largest in India’s history.

With the offering set to close on Thursday, this tepid demand, coupled with sluggish gray market activity, has dampened expectations for a strong stock debut.

This disappointing response reflects the broader trend of Indian equities faltering in recent weeks, as investors increasingly focus on the potential for stimulus measures in China.

Hyundai’s IPO had generated significant excitement, especially as India had recently emerged as the world’s most active IPO market.

The South Korean parent company is divesting up to a 17.5% stake in its Indian subsidiary, positioning Hyundai Motor India with a valuation nearing $19 billion at the upper limit of the IPO range.

Trading for the shares is scheduled to commence on October 22.

Despite the initial sluggishness, there remains a possibility for a turnaround.

Historically, large IPOs in India often see a surge in subscriptions as the deadline approaches, with retail investors stepping in to match institutional interest.

As of Wednesday, institutional investors had placed bids for 58% of the shares on offer, while retail subscriptions lagged at 38%.

Under local regulations, a minimum subscription of 90% of the total offering is required for IPOs to proceed with share allotment and listing.

“I’m pretty confident that the issue will sail through,” remarked Astha Jain, an analyst at Hem Securities Ltd., in an interview with Bloomberg.

She attributed the weak demand to the high valuation of the shares, which leaves little upside for potential investors.

Jain noted that retail traders, who typically seek quick returns, may be hesitant to engage.

Before the public offering launched, Hyundai successfully raised approximately 83.2 billion rupees ($990 million) by allocating shares to anchor investors at the upper price point of 1,960 rupees each.

Notable investors such as BlackRock Inc. and Baillie Gifford were confirmed as participants, following earlier reports from Bloomberg News.

With Hyundai’s IPO proceeds, the total capital raised from Indian IPOs this year has surpassed $12 billion, outpacing volumes from the previous two years, yet still falling short of the record $17.8 billion achieved in 2021, according to Bloomberg data.

Other significant IPOs in the pipeline include food delivery giant Swiggy Ltd. and the renewable energy division of state-owned power producer NTPC Ltd.

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Taiwan Semiconductor Manufacturing Co. (TSMC), a key supplier to Nvidia and Apple, posted a 54% increase in Q3 net profit, surpassing expectations as surging demand for artificial intelligence (AI) chips offset weakness in the mobile industry.

The chip giant reported net profit for the September quarter of NT$325.3 billion ($10.1 billion), exceeding analysts’ average estimate of NT$299.3 billion.

The boost in earnings followed a 39% rise in revenue during the same period.

AI chips offset mobile market slump

TSMC’s performance reflects the growing importance of AI infrastructure.

As companies like Microsoft and Amazon ramp up spending on AI, the demand for advanced chips has surged, helping TSMC weather sluggishness in traditional markets like mobile and automotive sectors.

The increased demand has also bolstered TSMC’s partnerships with Nvidia and Apple, whose AI-related products and services have driven strong chip orders.

Despite concerns about slowing fabrication capacity growth, TSMC’s 2- and 3-nanometer chip technologies have attracted significant interest from companies including Nvidia, AMD, and Qualcomm.

This strong pipeline of orders has allowed TSMC to maintain a positive revenue outlook.

Stock performance and market reaction

TSMC’s shares have surged more than 70% this year, outperforming many of Asia’s major tech companies.

The growth mirrors investor confidence in the AI theme, with US retail investors actively trading TSMC’s American depositary receipts (ADRs). As of early trading, TSMC’s ADRs rose 4.5% on Robinhood’s platform.

Meanwhile, shares of Japanese chip equipment makers like Lasertec Corp. pared early losses after TSMC’s earnings announcement.

However, investors remain cautious following ASML Holding NV’s recent report, which revealed weaker-than-expected bookings due to slower recovery in the mobile and automotive sectors.

TSMC has eyes on international expansion

TSMC’s strategy of international expansion also supports its positive outlook.

The company is pursuing new plant construction in Japan, Arizona, and Germany, with plans to expand further into Europe, focusing on the growing AI chip market.

While AI spending continues to be a bright spot for TSMC, some investors have expressed concerns about its sustainability.

Analysts are questioning whether tech giants like Meta and Alphabet will maintain their high levels of investment in AI chips without a groundbreaking application to justify the spending.

Despite these concerns, TSMC remains focused on strengthening its production capabilities and capitalizing on AI-driven opportunities.

The company’s leadership in advanced semiconductor technologies and packaging solutions positions it well to meet the needs of future AI applications.

TSMC’s better-than-expected quarterly performance underscores the company’s ability to navigate shifting market dynamics by leveraging AI-driven demand.

With international expansion underway and cutting-edge technology leading the way, TSMC appears well-positioned for continued growth, even as the broader semiconductor market faces uncertainties.

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NuScale Power (SMR) stock price has gone vertical in the past few days, helped by the ongoing nuclear energy recovery. It has risen in the past six consecutive weeks, reaching a record high of $19.32, giving its market valuation to over $3.40 billion.

Other nuclear energy-related stocks have surged. Oklo, the Sam Bankman-linked company has jumped by over 40% this week after inking a deal with Google, one of the biggest companies in the tech sector. Its stock has jumped by over 200% from its lowest point this year. 

Similarly, the Sprott Uranium Trust, which tracks the price of uranium, has jumped by over 23% from its lowest level in August. The Global X Uranium ETF (URA) ETF has risen by over 30% in the last twelve months and by 27% in the last 30 days.

NuScale and modular nuclear energy

The nuclear energy industry is seeing a strong comeback as countries continue their transition from fossil energy to clean energy.

Many analysts believe that it is one of the cleanest and most reliable energy sources in the industry. 

Nuclear is better than solar, which is only effective when the sun is shining. Wind also works when the wind is blowing. 

Nuclear, on the other hand, generates power throughout, provided that there is enough uranium. 

A key challenge for nuclear energy is that many large plants have attracted some safety concerns. 

Therefore, the biggest trend in the industry is in the small modular nuclear reactors (SMR), which are small reactors that can be assembled locally. For example, a factory can contract the installation of such a reactor, which will help it in the transition process.

A key area that could spur this growth is in the data center industry, which is seeing robust demand because of the rising AI demand.

The industry has attracted several companies in the sector. Rolls-Royce Holdings, the giant British company, has moved to the industry and is working to deploy its plants in the UK.

NuScale is another top American company that aims to become a big player in the sector. It has developed the NuScale Power Module, which can generate about 77 MWe. 

The company has also created the VOYGR power plant, which has a capacity of up to 12 power modules, bringing in 924 MWe. 

Analysts believe that these modular plants will continue doing well as the energy sector improves. A recent study established that global power consumption will rise by 191% between 2020 and 2040.

Cash burning machine

The challenge for investing in NuScale is that it is a cash-incinerating company for now. It has already burnt over $2 billion since 2007 when it started working on the technology. 

It raised these mostly from Fluor Corporation, a company that focuses on the engineering and construction sector. 

The company also raised some of the cash when it went public through a SPAC merger deal with Spring Valley. It has also raised money from the Department of Energy. 

NuScale Power’s losses have also been growing in the past few years. According to SeekingAlpha, it had a net loss of over $82 million in the trailing twelve months (TTM). Its total loss in the past five years stood at over $376 million. 

The challenge, however, is that NuScale has been a highly dilutive company in the past few years. According to TradingView, the number of outstanding shares rose from 23 million in 2022 to over 92 million today. This means that early investors have been diluted by over 300% in this period.

Dilution is an important concept that reduces the stake of these investors. It also reduces the amount of money that these investors make per share in the future.

This trend will continue since the company ended the last quarter with $136 million in cash. While this is a big amount, the company also had a net loss of $74.4 million during the quarter. 

Also, there are signs that some insiders are selling the stock. Data by Barchart shows that insiders have sold 424k shares in the last three months and 522,648 in the last 12 months.

NuScale stock price analysis

SMR chart by TradingView

The daily chart shows that the SMR share price has been in a strong bull run in the past few months. It recently crossed the important resistance point at $16.94, its highest point in July this year.

The stock has moved above the 50-day and 200-day Exponential Moving Averages (EMA). Also, the MACD and the Relative Strength Index (RSI) have moved to the overbought level.

Therefore, I believe that the stock will retreat in the coming days or weeks as the hype surrounding nuclear power fades. If this happens, the next point to watch will be at $16.9, its highest swing on July 15. The key date to watch will be on November 7 when the company publishes its financial results.

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After a challenging year, Expedia Group is showing signs of recovery that could make it an appealing choice for investors, with added momentum from recent speculation that Uber Technologies is exploring a potential acquisition of the online travel giant.

With travel demand stabilizing post-pandemic and strategic shifts under new leadership, the company’s potential is starting to look much brighter.

The company has endured a rollercoaster year, with its stock tumbling after the departure of CEO Peter Kern and disappointing quarterly results earlier in the year.

Kern, who had successfully guided the company through the pandemic, left amid growing investor impatience.

His successor, Ariane Gorin, is now leading a turnaround, focusing on boosting market share for Expedia’s core brands—Expedia, Hotels.com, and VRBO.

In a report by Barrons, senior analyst Naveen Jayasundaram at ClearBridge Investments said,

“Expedia is a business in the midst of a turnaround. There are early signs of progress.”

Uber’s interest fuels optimism for Expedia’s future

Reports from the Financial Times suggest that Uber has explored a potential acquisition of Expedia, which has drawn further attention to the stock’s potential.

Expedia shares jumped 7.6% in after-hours trading after the report came out.

Uber’s CEO, Dara Khosrowshahi, previously led Expedia and remains on its board.

An acquisition could create synergies between Uber’s global transportation network and Expedia’s travel booking services, offering a more comprehensive travel solution for customers.

While no formal deal has been confirmed, Uber’s interest speaks volumes about the value proposition that Expedia represents.

Investors see this as a sign that the company’s assets and operational platform are increasingly attractive to major players in the travel and tech industries.

Travel demand stabilizes as Expedia eyes market growth

Despite fluctuations in the travel market post-pandemic, global travel demand remains robust.

Domestic and international air traffic has returned to 2019 levels, and cruise bookings are set to exceed pre-pandemic figures by nearly five million travelers in 2024.

Expedia, as one of the largest online travel agencies in the world, stands to benefit from this sustained demand.

Expedia’s market dynamics have also shifted as consumer preferences evolve.

Today’s travelers, especially new users unfamiliar with traditional booking platforms, are more likely to rely on online travel agents (OTAs) like Expedia for hotel and airfare deals.

Christopher Conway, senior portfolio manager at GYL Financial Synergies said in the report,

“The more fragmented the industry is, the harder it’s going to be for [competitors], even Google.”

While some bears argue that hotels may resist paying commissions to OTAs in the same way airlines have, the hotel industry remains fragmented, with many properties owned by smaller operators.

This limits the potential for a large-scale rebellion against platforms like Expedia and Booking Holdings, which together control roughly 42% of global travel bookings, according to travel industry firm Skift.

Source: Barron’s

Expedia’s valuation: Undervalued and ready for growth

Expedia’s stock is trading at attractive valuations, making it an appealing option for value-focused investors.

The stock is priced at just 11 times forward earnings, a significant discount compared to its main competitor Booking Holdings, which trades at 22 times forward earnings.

Dan Ahrens, managing director at AdvisorShares, refers to Expedia as a “blue-chip travel stock” that’s simply too cheap at current levels.

Jay Aston Jr., a portfolio manager at Neuberger Berman, echoes this sentiment, noting that “Booking does a good job, but Expedia has a pretty fantastic platform.”

He also highlights that Expedia’s unified platform, streamlined during the pandemic, is now generating significant cash flow.

The company posted $1.3 billion in free cash flow in the most recent quarter, a 42% increase from the previous year.

Aston adds,

A more unified platform will allow Expedia to generate significantly more meaningful cash flow, and there’s a lot more operating leverage to come.

Earnings growth and a bright future under new leadership

Expedia’s financial outlook appears strong, with analysts predicting a 21.5% increase in earnings per share this year, rising to $11.78, and an additional 20% growth in 2025 to $14.18.

Revenue is expected to grow by approximately 7% in both years, driven in part by the company’s home rental service, VRBO, which rebounded in the second quarter thanks to the launch of the One Key loyalty program.

Additionally, Expedia’s business-to-business (B2B) division, which allows other travel companies to tap into Expedia’s inventory, has also been a growth driver.

This part of the business, combined with other strategic initiatives, positions Expedia for continued success.

The company will report its third-quarter results on November 7, giving investors another opportunity to assess the effectiveness of its new leadership and strategy.

Randy Hare, director of equity research at Huntington National Bank, believes Expedia is well-positioned for growth, saying,

Expedia is probably interesting here, relative to Booking, since the valuation is more attractive—we like that. Their estimates seem doable…we could see decent growth and upward movement.

With analysts continuing to revise their earnings estimates upwards, and the company poised for further growth under the leadership of CEO Ariane Gorin, Expedia may just be the travel stock investors need to keep on their radar.

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