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NLR ETF Peaks at $32, Drops 30% as Nuclear Rally Declines

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  Published in Stocks and Investing on Thursday, December 18th 2025 at 15:02 GMT
      Locale: UNITED STATES

NLR: The Nuclear Rally Appears to Be Over

In the last two years the nuclear‑energy sector has been a lightning‑fast story. A handful of large U.S. utilities and a handful of independent nuclear operators saw their shares soar, and a dedicated “Nuclear” ETF – ticker NLR – tracked the boom, out‑pacing the S&P 500 for much of 2023. Yet the narrative has begun to shift. New cost data, political headwinds, and a resurgent renewable‑energy market are all pointing to a “take‑away” moment: the nuclear rally may have peaked.

1. What Made the Rally Happen?

Energy‑price volatility

The global energy crisis of 2022‑23 saw natural‑gas and coal prices skyrocket. Nuclear power’s status as a low‑carbon, base‑load generator made it attractive to both investors and policymakers. In many jurisdictions, “clean” power became a policy imperative, and the nuclear sector was suddenly seen as a bridge to net‑zero.

Policy and regulatory support

U.S. administrations (both Democratic and Republican) promoted nuclear as a low‑carbon option, offering incentives such as tax credits, accelerated depreciation, and streamlined permitting for existing plants. In Europe, countries that were historically hostile to nuclear began to revisit nuclear policy in the wake of supply‑chain disruptions.

A lagging renewable sector

While solar and wind grew at record rates, they still suffered from intermittency and grid‑integration challenges. Nuclear’s continuous output filled the gap and helped utilities manage peak demand, further boosting nuclear valuations.

2. The NLR Chart – A Rough Roadmap

The NLR ETF, which tracks a basket of nuclear‑focused stocks (Exelon, Duke Energy, American Electric Power, FirstEnergy, etc.), reached a high of about $32 in late March 2023, after a 90%+ rally from its 2022 low. Since then, the fund has tumbled back toward $22 – a drop of roughly 30% in just nine months. That sharp retracement mirrors the sector’s underlying fundamentals, which have shifted since the rally’s inception.

3. Why the Rally Is Cooling

Case Study: Exelon’s New‑Build Gamble

Exelon, which owns three of the nation’s largest operating reactors, announced a $12 billion expansion plan to build a new modular reactor. However, the project now faces a 4‑year permitting delay, and preliminary cost‑growth estimates suggest the final price tag could be $15 billion. The company’s stock has slipped from $48 in May 2023 to $33, illustrating how the market is pricing in these risks.

4. The “Nuclear Renaissance” Myth Versus Reality

• High CAPEX vs. Low OPEX – While nuclear has lower operating costs than fossil fuel plants, the high initial investment and long construction period mean that returns are stretched over decades. Investors who look at shorter‑term performance see lower upside.

• Regulatory Complexity – Even if a plant is approved, the NRC’s safety protocols, decommissioning plans, and waste‑management approvals can add decades of uncertainty.

• Public Perception – A 2023 survey found that 72% of U.S. respondents would oppose a new nuclear plant in their county if given a choice. This social license can stall even the best‑funded projects.

• Renewables’ Speed of Deployment – Solar and wind projects can be completed in 18–24 months for a fraction of the cost of a nuclear plant. That speed advantage is a huge competitive edge for utilities.

5. What Investors Should Take Away

Short‑term vs. long‑term outlook

• Short‑term: The NLR ETF is currently trading near a 1‑year low. The near‑term performance is tied to ongoing construction delays and regulatory uncertainty.

• Long‑term: Nuclear could still be a core part of a decarbonized grid if political will and financing improve. The modular, small‑modular reactor (SMR) technology could reduce CAPEX and construction times.

Risk Management

• Diversify: Rather than a pure nuclear play, consider a broader energy mix that includes renewables, storage, and conventional power.

• Watch the policy cycle: Keep an eye on upcoming legislation that could unlock tax incentives or change safety regulations.

Potential “Turn‑around” Signals

• SMR breakthroughs: If SMR development moves from prototype to commercial scale, it could revitalize the sector.
• Decommissioning revenue: Some utilities have begun monetizing waste‑management contracts, which could offset some operating costs.

6. Final Thoughts

The nuclear rally’s decline is a reminder that sector momentum can be fragile when it relies on a handful of large, capital‑intensive projects and uncertain regulatory pathways. While nuclear remains an attractive low‑carbon alternative for base‑load power, its growth trajectory is no longer as clear‑cut as it was during the 2023 price surge. Investors looking for exposure to the energy transition should weigh the nuclear sector’s high‑risk, long‑term potential against the faster, cheaper, and increasingly mature renewable options.

For those who already hold NLR or individual nuclear stocks, the market is now offering a chance to reassess valuations and potentially take a more balanced stance. The key is to stay informed about regulatory changes, construction timelines, and the competitive dynamics of renewables—because in the world of energy, the only constant is change.