This ETF Has Crushed the Dow Jones and S&P 500 in 2025. Here's How It Can Keep Winning in 2026.

It looks like the energy sector will disappoint investors this year as the Energy Select Sector SPDR Fund has produced gains of less than half those delivered by the S&P 500.

Drilling deeper, pun intended, investors can find some energy exchange-traded funds (ETFs) that aren't just beating the traditional iteration of the sector, but are trouncing the broader market as well. Take the case of the VanEck Uranium and Nuclear ETF (NYSEMKT: NLR). As of Nov. 10, the nuclear energy ETF is up 71.7% since the start of 2025. This means that for every $1 returned this year by the Dow Jones Industrial Average, the nuclear fund has returned more than $5.

Sounds impressive and it is, but with 2025 nearing its end, investors are right to ponder the case for nuclear energy stocks beating the Dow again next year. Time will tell what that answer is, but the nuclear energy industry has the ingredients needed to cook up another recipe of market-beating performance in 2026.

Not a tech ETF, but...

The VanEck ETF turns 19 years old next August so it's seen its share of ups and downs, including the 2011 nuclear crisis at Fukushima Daiichi in Japan. As highlighted by the ETF's year-to-date performance, these days it's way more good than bad for nuclear energy stocks and artificial intelligence (AI) is a big reason why.

This nuclear energy ETF trounced the Dow in 2025 and can do it again in 2026. Image source: Getty Images.

Here's an interesting data point highlighting investors' enthusiasm for the AI/nuclear relationship. At the end of 2024, the VanEck ETF was home to approximately $1.6 billion in assets under management. As of Nov. 7, that tally had swelled to $3.7 billion, meaning the fund has more than doubled in size since the start of the year.

More integral to the case for this energy ETF are these points. The data centers powering the AI revolution are expected to consume 12% of all electricity generated in this country by 2028 and global electricity demand for those data centers is poised to double by 2030. Those nuggets confirm the staggering power needs of AI, but they don't necessarily scream "nuclear needed here."

However, nuclear is vital to AI advancement -- and for multiple reasons. First, the energy purveyed by some members of the VanEck ETF is clean energy, but it's more stable than solar or wind because nuclear doesn't rely on weather conditions.

Second, while initial nuclear infrastructure expenditures are high, those costs are palatable because over the long haul, nuclear energy is cost-effective and operational costs are usually steady. Adding to the appeal of nuclear to AI hyperscalers is another point: Nuclear is high-density power, meaning a small amount can create substantial amounts of electricity.

This ETF has the right roster

Another feather in the cap of the VanEck ETF is that although it holds just 28 stocks, it's broad-based in its approach to the nuclear energy industry. The fund is home to producers of nuclear energy, companies engaged in the infrastructure and maintenance side of the business, services/technology providers and uranium miners.

Speaking of uranium mining, one of the biggest companies in the industry is Cameco (NYSE: CCJ), which is also this ETF's largest holding. That's relevant because due in part to the power demands created by AI, global uranium output is expected to grow at an 8% compound annual growth rate through 2030.

Another of the ETF's holdings -- the third-largest to be precise -- that could be a driver of long-term upside is Oklo (NYSE: OKLO). The beneficiary of a favorable regulatory environment in the U.S., Oklo is developing the smaller, faster-to-build nuclear reactors that are in high demand.

Cameco and Oklo are just two examples, but if those high-flying stocks continue their bullish ways in 2026, the nuclear energy ETF could again be a Dow-beater.

Todd Shriber has no position in any of the stocks mentioned. The Motley Fool recommends Cameco. The Motley Fool has a disclosure policy.