Constellation Energy Corporation (CEG - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this company have returned -2.5%, compared to the Zacks S&P 500 composite's -1.2% change. During this period, the Zacks Alternative Energy - Other industry, which Constellation Energy Corporation falls in, has lost 9.1%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Constellation Energy Corporation is expected to post earnings of $3.91 per share, indicating a change of +28.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.5% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $12.12 points to a change of +29.1% from the prior year. Over the last 30 days, this estimate has changed -0.5%.
For the next fiscal year, the consensus earnings estimate of $13.25 indicates a change of +9.3% from what Constellation Energy Corporation is expected to report a year ago. Over the past month, the estimate has changed -0.1%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Constellation Energy Corporation.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Constellation Energy Corporation, the consensus sales estimate of $8.69 billion for the current quarter points to a year-over-year change of +32.3%. The $35.61 billion and $35.06 billion estimates for the current and next fiscal years indicate changes of +39.5% and -1.5%, respectively.
Last Reported Results and Surprise HistoryConstellation Energy Corporation reported revenues of $7.5 billion in the last reported quarter, representing a year-over-year change of +23%. EPS of $2.55 for the same period compares with $1.91 a year ago.
Compared to the Zacks Consensus Estimate of $7.47 billion, the reported revenues represent a surprise of +0.48%. The EPS surprise was +8.05%.
Over the last four quarters, Constellation Energy Corporation surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Constellation Energy Corporation is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Constellation Energy Corporation. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
As data centers and artificial intelligence demand reliable, carbon-free power, these two energy titans could become critical to your portfolio. Here is how Constellation Energy (CEG -0.35%) and GE Vernova (GEV -0.03%) compare in 2026.
Constellation Energy focuses on clean power generation through its massive nuclear fleet, while GE Vernova provides the hardware and services required to modernize the global grid. Both companies play vital roles in the transition to sustainable energy. This comparison examines their financial health and market risks to help you decide which stock fits your investment goals.
Constellation Energy is the largest producer of carbon-free energy in the United States, operating a massive fleet of nuclear and renewable assets. Its strategy focuses on providing reliable power to roughly 2.5 million customer accounts, including three-fourths of the Fortune 100 companies. This includes high-profile agreements with Microsoft (MSFT +0.81%) and Meta to provide dedicated nuclear power while positioning the company as a leader among electric utility stocks.
In FY 2025, revenue reached nearly $25.5 billion, representing a growth of roughly 8.3% compared to the previous year. The company reported a net income of close to $2.3 billion for the same fiscal period, resulting in a net margin of approximately 9.1%. While total revenue increased, this net margin, which represents the portion of sales remaining after all costs are paid, was lower than the nearly 15.9% recorded during FY 2024.
As of its December 2025 balance sheet, the company maintained a debt-to-equity ratio of nearly 0.6x, which measures total debt against shareholder equity to show reliance on borrowed money. The current ratio, measuring the ability to cover short-term debts with short-term assets, stood at approximately 1.5x. Free cash flow for the year was close to $1.3 billion, representing the cash generated after accounting for expenditures on physical assets.
The case for GE VernovaGE Vernova operates as a specialized energy company providing the essential hardware and software used to generate, transfer, and store electricity. The company estimates its global technology footprint helps generate approximately 25% of the world's electricity across a diverse customer base of governments and utilities. It maintains extensive service agreements for thousands of gas and wind turbines, including a recently settled collaboration on the Vineyard Wind offshore project.
In FY 2025, revenue reached close to $38.1 billion, an increase of roughly 8.9% over the prior fiscal year. The company reported a net income of approximately $4.9 billion, which resulted in a net margin of nearly 12.8%. This represents a significant jump from the previous year and highlights the company's ability to generate more value from its global industrial operations.
As of the December 2025 balance sheet, the debt-to-equity ratio was approximately 0.0x, indicating that total liabilities do not exceed shareholder equity. The current ratio, which compares short-term assets to short-term liabilities, was roughly 1.0x. Free cash flow reached nearly $3.7 billion during the fiscal year, providing the company with significant cash to reinvest in technology or return to its investors.
Risk profile comparisonConstellation Energy faces significant risks from commodity price volatility in wholesale power markets, which can impact the unhedged portions of its generation portfolio. Operational performance depends heavily on the reliability of its large nuclear fleet and the successful integration of recent acquisitions. The company is also subject to evolving regulatory environments, including policy shifts that affect nuclear subsidies and the rapid growth of data center energy demand.
GE Vernova's operations are subject to supply chain and logistics disruptions that can delay the delivery of large-scale, long-cycle products. A primary risk involves the execution of long-term service agreements, where errors in cost or reliability estimation can lead to financial penalties. The company faces stiff competition from international rivals such as Siemens Energy (SMEGF +0.17%) and Mitsubishi Electric (MIELF +3.31%), alongside risks related to global shifts in renewable energy policy.
Valuation comparisonConstellation Energy appears to be the more conservatively valued option based on sales, while GE Vernova carries a higher multiple reflecting its significant global industrial scale and profit growth.
MetricConstellation EnergyGE VernovaForward P/E21.2x27.2xP/S ratio 2.9x5.3xValuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?I'd go with Constellation Energy. Both companies are riding the same powerful tailwind of surging demand for reliable, clean power from data centers and AI infrastructure. But Constellation is the one with a fleet of nuclear plants that can deliver that power around the clock, under contract, for decades.
Constellation is the largest producer of carbon-free energy in the United States, and it has a combination of scale, reliability, and contracted long-term revenue that is rare in the energy sector. Q3 numbers are coming early next month, but in Q2 2026, adjusted operating earnings beat estimates and the company raised its full-year guidance substantially after a key acquisition.
GE Vernova is building the turbines and grid infrastructure the energy transition runs on, and the demand for its equipment is strong. The backlog is substantial and the long-term setup is strong. For investors who prefer owning the picks and shovels of the energy transition, GE Vernova is the kind of business that tends to age well in a portfolio.
But Constellation's nuclear fleet is an asset that becomes more valuable the longer AI infrastructure continues to grow, not less. That durability is what makes it my pick here.
If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Constellation Energy Corporation (CEG - Free Report) . This company, which is in the Zacks Alternative Energy - Other industry, shows potential for another earnings beat.
When looking at the last two reports, this company has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 7.54%, on average, in the last two quarters.
For the last reported quarter, Constellation Energy Corporation came out with earnings of $2.55 per share versus the Zacks Consensus Estimate of $2.36 per share, representing a surprise of 8.05%. For the previous quarter, the company was expected to post earnings of $2.56 per share and it actually produced earnings of $2.74 per share, delivering a surprise of 7.03%.
Price and EPS Surprise
Thanks in part to this history, there has been a favorable change in earnings estimates for Constellation Energy Corporation lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Constellation Energy Corporation has an Earnings ESP of +2.09% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #2 (Buy), it shows that another beat is possibly around the corner.
Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades, downgrades and initiations, please see our analyst ratings page.
Shares of Constellation Energy Corporation (CEG - Free Report) have gained 6.5% over the past four weeks to close the last trading session at $271.37, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $339.81 indicates a potential upside of 25.2%.
The average comprises 21 short-term price targets ranging from a low of $290.00 to a high of $395.00, with a standard deviation of $31.35. While the lowest estimate indicates an increase of 6.9% from the current price level, the most optimistic estimate points to a 45.6% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is a much-coveted metric for investors, solely banking on this metric to make an investment decision may not be wise at all. That's because the ability and unbiasedness of analysts in setting price targets have long been questionable.
But, for CEG, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You May Not Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Here's Why There Could be Plenty of Upside Left in CEGThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
The Zacks Consensus Estimate for the current year has increased 0.3% over the past month, as two estimates have gone higher compared to no negative revision.
Moreover, CEG currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much CEG could gain, the direction of price movement it implies does appear to be a good guide.
Constellation Energy Corporation (CEG - Free Report) closed at $279.54 in the latest trading session, marking a -5.49% move from the prior day. The stock's change was less than the S&P 500's daily loss of 1.11%. Elsewhere, the Dow saw a downswing of 0.09%, while the tech-heavy Nasdaq depreciated by 1.88%.
Prior to today's trading, shares of the company had gained 13.81% outpaced the Oils-Energy sector's gain of 4.62% and the S&P 500's gain of 2.06%.
Market participants will be closely following the financial results of Constellation Energy Corporation in its upcoming release. The company is expected to report EPS of $3.99, up 31.25% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $8.69 billion, up 32.2% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.19 per share and revenue of $33.68 billion, indicating changes of +29.82% and +31.92%, respectively, compared to the previous year.
It is also important to note the recent changes to analyst estimates for Constellation Energy Corporation. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.38% higher. Constellation Energy Corporation presently features a Zacks Rank of #2 (Buy).
In terms of valuation, Constellation Energy Corporation is currently trading at a Forward P/E ratio of 24.27. This denotes a premium relative to the industry average Forward P/E of 17.7.
One should further note that CEG currently holds a PEG ratio of 1.63. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Alternative Energy - Other industry had an average PEG ratio of 2.02 as trading concluded yesterday.
The Alternative Energy - Other industry is part of the Oils-Energy sector. Currently, this industry holds a Zacks Industry Rank of 97, positioning it in the top 40% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
Shares of Constellation Energy (CEG -5.49%) jumped from $291.11 on Oct. 6 to $309.80 the same day following the announcement of its landmark 20-year power purchase agreement (PPA) and strategic collaboration with Alphabet.
There was plenty of enthusiasm for the $4.3 billion deal, which will add 890 megawatts of new nuclear capacity through updates at 11 Constellation-owned nuclear units in Illinois, Pennsylvania, and New Jersey.
However, in the days since the announcement, Consellation stock is actually down more than 3%. The reason is that the energy stock is already trading at a high multiple relative to its peers, at more than 28 times trailing earnings and more than 23 times forward earnings.
Here are three reasons why Constellation is worth that lofty valuation after the Alphabet agreement.
Image source: Getty Images.
The deal provides cash flow security The deal locks in long-term demand over a 15- to 20-year horizon. It also has an additional 15-year agreement covering 2,700 megawatts from Constellation's existing nuclear fleet. Pairing the Alphabet announcement with a similar recent $3 billion, 20-year deal with Amazon establishes a predictable baseline of contracted cash flows.
This shields a significant portion of Constellation's nuclear fleet from merchant power price volatility and guarantees high-margin monetization for decades.
Instead of worrying about the typical construction delays, budget overruns, and regulatory hurdles connected with building nuclear plants from scratch, this deal focuses on uprates, which increase the maximum licensed electricity output of an existing, operational nuclear reactor. These include modernizing turbines, steam generators, and controls at existing facilities.
Just look at what happened with the last two new reactors, Georgia Power's Vogtle 3 and Vogtle 4 plants in Georgia, which cost more than $35 billion to build and took 15 years to build. Constellation is updating reactors already in place, a far more economical process, and expects to have the updates ready in 2028.
Analysts have an average price target of $341.53 for the stock, well above its current trading price.
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Constellation isn't really overpriced The stock is trading at lower valuations than its historical averages. That's because its shares have fallen more than 17% so far this year. It isn't fair to compare Constellation to other nuclear power stocks, as there isn't a direct comparison. Constellation operates the largest nuclear fleet in the U.S., about one-fifth of all nuclear capacity in this country.
Through six months, the company reported revenue of $18.6 billion, up 44.5%, year over year. Earnings per share were $5.88, an increase of 92.7% over the same six months a year ago. Those numbers show that the mystery isn't the company's valuation, but why it isn't even higher.
The company is a go-to for hyperscalers Its size and scope mean Constellation is best positioned to benefit from the growing need for stable power for data centers, as it can provide 22 gigawatts of carbon-free nuclear power, three times more than any other utility in the U.S.
Hyperscalers such as Alphabet require firm, 24/7 carbon-free power to fuel energy-hungry artificial intelligence data centers, making intermittent renewables insufficient on their own. This deal, alongside consecutive mega-deals from other tech giants, validates that nuclear operators possess irreplaceable pricing power. It also shows that tech companies are willing to heavily co-invest to secure reliable electricity.
Most of Constellation's nuclear assets are on the PJM Interconnection grid. PJM encompasses Northern Virginia and the surrounding Mid-Atlantic regions, with the highest density of data center infrastructure in the world.
Individual hyperscalers are asking for multi-gigawatt commitments. Constellation is one of the only energy providers in the country with a large enough portfolio to handle multiple GW-scale agreements without exhausting its asset base.
Worth it, despite some risks There are legitimate reasons that Constellation isn't trading higher. It's important to note that revenue from these uprates won't begin until 2028, leaving the stock vulnerable to a broader tech sector sell-off, especially if artificial intelligence (AI) spending cools.
However, these deals also de-risk the company's investments in expanding its nuclear capacity. Constellation shouldn't be viewed as another boring utility stock but as a prime enabler of infrastructure for AI data centers. It expects more than 20% EPS growth through 2029, and based on its first-half earnings, is delivering on that forecast.
BALTIMORE--(BUSINESS WIRE)--Constellation (Nasdaq: CEG) today announced that it has completed the sale of the Brazos Valley Energy Center to LS Power. The 606-megawatt (MW) natural gas-fired combined-cycle facility is located outside Houston and operates in the ERCOT market.The transaction represents continued progress in satisfying regulatory commitments related to Constellation's acquisition of Calpine, which closed in January 2026.Constellation entered into an agreement to sell Brazos Valley.
Key Takeaways CEG is expanding its renewable portfolio with hydro, solar, wind, geothermal and battery storage assets. CEG's 15-year Toyota agreement supports a Texas solar project set to begin operations in 2027. CEG operates 590 MW of battery storage, with over 2,000 MW in development. Constellation Energy Corporation (CEG - Free Report) is expanding its generation portfolio following the Calpine acquisition while broadening its renewable energy assets to meet rising demand for clean electricity. Although nuclear and natural gas remain CEG’s primary generation sources, renewable energy development is further diversifying its portfolio.
The company’s renewable assets include two hydroelectric plants with more than 1,600 megawatts (MW) of capacity, six solar facilities totaling 377 MW and 27 wind projects across 10 states with over 1,400 MW of capacity. Following the Calpine acquisition, CEG also operates The Geysers geothermal complex in Northern California, comprising 13 plants with approximately 750 MW of capacity. The complex completed a 25-MW expansion in June 2026. The company also operates four battery storage facilities with 590 MW of capacity and has more than 2,000 MW in development. In the second quarter of 2026, CEG achieved a 96% renewable energy capture rate across its wind, solar and run-of-river hydro fleet.
On Sept. 21, 2026, CEG announced a 15-year renewable energy agreement with Toyota Motor North America supporting Ferrovial’s Milano Solar project in Texas. Under a separate power purchase agreement, CEG will purchase power associated with more than 115 MW of solar capacity, representing approximately 246,000 megawatt-hours of annual generation. Commercial operations are expected to begin in September 2027 and Toyota will receive renewable energy certificates from the project. These initiatives broaden CEG’s renewable offerings and support corporate customers’ sustainability goals.
CEG’s expanding renewable assets, storage capacity and corporate agreements support portfolio diversification and long-term growth.
Renewable Energy Expansion Drives Utility GrowthRising investments in solar, wind and battery storage are expanding utilities’ generation portfolios. Renewable energy expansion benefits not only CEG but also other utility companies, as discussed below:
Clearway Energy (CWEN - Free Report) operates 13.9 GW of gross generating capacity, including 11.1 GW of renewable energy and storage assets, strengthening its position in clean power.
NextEra Energy, Inc. (NEE - Free Report) generates, transmits and distributes electricity across North America. In the second quarter of 2026, it added 3.6 GW of wind, solar and battery storage projects to its backlog, reaching 35.1 GW.
The Zacks Rundown on CEGCEG’s Earnings EstimatesThe Zacks Consensus Estimate for 2026 and 2027 earnings per share indicates an increase of 29.82% and 8.76%, respectively, year over year.
Image Source: Zacks Investment Research
CEG’s Returns on Equity (ROE)Constellation Energy's trailing-12-month ROE is 14.89%, ahead of the industry average of 8.28%.
Image Source: Zacks Investment Research
CEG’s Stock Price PerformanceIn the past month, the company’s shares have risen 9.1% compared with the industry’s 3.7% growth.
The technology sector's commitment to nuclear energy continues to strengthen. Just last week, Google's parent company Alphabet (GOOG +0.16%) (GOOGL +0.30%) agreed to purchase nuclear-generated electricity from utility company Constellation Energy's (CEG +0.65%) existing nuclear power plants for 15 years, in addition to making a 20-year agreement to purchase 890 megawatts' worth of power from nuclear power production facilities that Constellation will build in the future. Alphabet's long-term commitment will enable Constellation Energy to confidently invest $4.3 billion in new nuclear energy capacity, adding to its already-extensive nuclear power portfolio.
Constellation shares jumped on the news, of course. But so did shares of small modular reactor (SMR) developers Oklo (OKLO -1.33%) and NuScale (SMR -3.13%), despite having no involvement in Constellation's agreement with Google. What gives?
Image source: Getty Images.
A new way to create and consume nuclear energy NuScale and Oklo may be positioned to enter the nuclear energy business. However, they're not like Constellation. Constellation Energy's typical nuclear power facility is built to serve hundreds of thousands of utility customers.
NuScale and Oklo, on the other hand, are working on small-scale reactors designed to power facilities such as refineries, smelters, and desalination plants, built where the electricity is consumed.
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The two approaches to providing power are obviously very different -- different enough that investors seemingly shouldn't conflate the two. Yet, they did. Why?
Because there's a more philosophical message being delivered here. That's the general recognition that nuclear energy is a far more practical solution to the growing power shortage that renewables were expected to shore up by now. Alphabet's management may not be interested in small modular nuclear reactors (yet). Other companies could be, given the broader reacceptance of this once-waning energy source. Investors are simply connecting the dots, and reasonably so.
Small modular reactors will feature prominently in the future SMRs will never account for the lion's share of the planet's nuclear power generation, to be clear. Their fiscal math just doesn't make sense at scale.
Nevertheless, when grid independence is necessary and desirable, and the need is modest, they do have their place. That's why there are now over 70 small modular reactors already planned, if not already being built, according to estimates from the World Nuclear Association, compared to none in true commercial operation.
Moreover, the International Atomic Energy Agency expects about one-fourth of the world's new nuclear energy production capacity established between now and 2060 to come from small modular reactors, aligning with the International Energy Agency's prediction that the SMR power output will grow from less than 1 gigawatt in 2030 to around 100 gigawatts by 2050.
Don't miss the forest for the trees For what it's worth, Constellation Energy isn't ignoring the potential of small modular reactors. In July 2026, it made a strategic equity investment in privately held modular reactor developer Blue Energy. Constellation just has more pressing, larger-scale concerns to focus on right now.
Investors are more forward-thinking, recognizing that Alphabet's long-term interest in Constellation's supply of nuclear-generated electricity is a sign of a much broader philosophical movement with room for more than one winner.
Key Takeaways Brazil small-cap ETFs rallied on election-related optimism.Tanker shipping ETFs gained amid rising Strait of Hormuz risks.Utilities, cybersecurity and cloud ETFs benefited from AI-driven demand. Wall Street just recorded an upbeat week, with the S&P 500 gaining 1.2%, the Dow Jones adding 0.9%, the Nasdaq Composite inching up 0.6%, while the Russell 2000 lost 0.9%. Let’s find out which ETF areas stood out last week and beat the market.
Winning ETF AreasBrazil Brazil’s Bovespa index surged last week after right-wing Senator Flavio Bolsonaro won 47% of the vote in the first round of the presidential election, ahead of incumbent Luiz Inácio Lula da Silva’s roughly 45%, defying polls that had projected Lula to lead.
The two candidates will contest in a runoff on Oct. 25. Since the right-wing candidate gained the majority, the stock market reacted favorably.
VanEck Brazil Small-Cap ETF (BRF - Free Report) – Up 11%
iShares MSCI Brazil Small-Cap ETF (EWZS - Free Report) – Up 9.8%
Tanker ShippingAbout 11 tankers faced attack while transiting Hormuz during the week that ended Oct. 4, the maximum number of strikes on commercial ships since the war began, per CNBC. The rise in attacks comes as Middle Eastern crude oil exports recovered to prewar levels in September, supported by U.S. military efforts.
Due to rising risks, many tankers are likely to avoid chokepoints and take the long detour. These journeys will take weeks longer, tying up the global fleet. At the same time, marine insurance companies have raised their fees dramatically. As a result, tanker shipping ETF surged.
Utilities U.S. utility stocks rose last week. The main catalyst was Constellation Energy (CEG - Free Report) , which jumped about 15% after Google announced a 20-year nuclear power agreement to secure 890 megawatts of electricity, reinforcing expectations that AI data centers will drive long-term power demand. Utilities ETFs heavy on the CEG stock jumped mainly.
Cybersecurity Despite prevailing concerns over AI safety, elevated valuations and financing risks, Wall Street remains optimistic about AI’s long-term potential. Growing AI adoption, however, is increasing cybersecurity risks, as sophisticated cyberattacks and rogue AI agents threaten sensitive data and infrastructure.
This trend, alongside geopolitical tensions and rising cyberwarfare, could boost cybersecurity spending. With cybersecurity demand spanning market cycles and becoming essential to AI deployment, cybersecurity ETFs have been surging in recent weeks.
Global X Cybersecurity ETF (BUG - Free Report) – Up 6.6%
WisdomTree Cybersecurity Fund (WCBR - Free Report) – Up 5.9%
Cloud Computing Cloud computing stocks jumped last week on renewed optimism about AI-driven cloud demand and the potential for Big Tech to monetize its massive AI investments. Investors were looking for signs that accelerating cloud adoption and growing revenue backlogs at companies such as Amazon, Microsoft and Oracle could justify their spending on AI infrastructure.
Goldman Sachs expects year-over-year cloud revenue growth among major providers to accelerate from 48% in the second quarter to 55% in the third quarter, strengthening expectations for continued growth, as quoted on Yahoo Finance.
WisdomTree Cloud Computing Fund (WCLD - Free Report) – Up 5.8%
Constellation Energy Corporation (CEG - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this company have returned +4.7%, compared to the Zacks S&P 500 composite's +2.4% change. During this period, the Zacks Alternative Energy - Other industry, which Constellation Energy Corporation falls in, has lost 2.7%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Constellation Energy Corporation is expected to post earnings of $3.99 per share for the current quarter, representing a year-over-year change of +31.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.4%.
The consensus earnings estimate of $12.19 for the current fiscal year indicates a year-over-year change of +29.8%. This estimate has changed +0.4% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $13.25 indicates a change of +8.8% from what Constellation Energy Corporation is expected to report a year ago. Over the past month, the estimate has changed +1%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Constellation Energy Corporation.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Constellation Energy Corporation, the consensus sales estimate for the current quarter of $8.69 billion indicates a year-over-year change of +32.2%. For the current and next fiscal years, $33.68 billion and $32.56 billion estimates indicate +31.9% and -3.3% changes, respectively.
Last Reported Results and Surprise HistoryConstellation Energy Corporation reported revenues of $7.5 billion in the last reported quarter, representing a year-over-year change of +23%. EPS of $2.55 for the same period compares with $1.91 a year ago.
Compared to the Zacks Consensus Estimate of $7.47 billion, the reported revenues represent a surprise of +0.48%. The EPS surprise was +8.05%.
Over the last four quarters, Constellation Energy Corporation surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Constellation Energy Corporation is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Constellation Energy Corporation. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
In the latest close session, Constellation Energy Corporation (CEG - Free Report) was down 4.85% at $285.07. This change lagged the S&P 500's daily loss of 0.47%. Meanwhile, the Dow gained 0.1%, and the Nasdaq, a tech-heavy index, lost 1.25%.
Heading into today, shares of the company had gained 1.93% over the past month, outpacing the Oils-Energy sector's gain of 1.58% and the S&P 500's gain of 1.15%.
The investment community will be closely monitoring the performance of Constellation Energy Corporation in its forthcoming earnings report. The company is predicted to post an EPS of $3.99, indicating a 31.25% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $8.69 billion, indicating a 32.2% increase compared to the same quarter of the previous year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $12.19 per share and a revenue of $33.68 billion, signifying shifts of +29.82% and +31.92%, respectively, from the last year.
It is also important to note the recent changes to analyst estimates for Constellation Energy Corporation. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.38% higher. Constellation Energy Corporation is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, Constellation Energy Corporation currently has a Forward P/E ratio of 24.59. This signifies a premium in comparison to the average Forward P/E of 17.82 for its industry.
It's also important to note that CEG currently trades at a PEG ratio of 1.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Alternative Energy - Other industry stood at 2.01 at the close of the market yesterday.
The Alternative Energy - Other industry is part of the Oils-Energy sector. Currently, this industry holds a Zacks Industry Rank of 91, positioning it in the top 37% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Jason Brown of the @brownreport turns to a trio of stocks that that have seen numerous headlines over recent trading days. For Constellation Energy (CEG), Jason expects the company to pen more deal linked to AI data center expansions.
Shares of Constellation Energy (CEG -0.27%) rallied on news that it had agreed to a deal that will bring 890 megawatts of new nuclear power to the PJM grid. But the stock still remains 25% below its late 2025 high, as of this writing. The latest deal, with Alphabet's (GOOG +0.81%) Google, is just one of many the company has inked with high-tech companies. And it highlights the strength of Constellation Energy's business right now. Here's why it's so important.
Artificial intelligence is disrupting the grid U.S. electricity demand increased by 10% between 2005 and 2025. It is projected to increase by 60% between 2025 and 2045. That's a step change in demand, and it is already straining the grid, with new technology playing a material part in the change. The big story right now is artificial intelligence, which requires high-power computers that consume massive amounts of electricity.
Image source: Getty Images.
It is not a coincidence that Constellation Energy has inked supply deals with Google, Microsoft (MSFT +0.09%), Meta (META -2.38%), and Amazon (AMZN +1.42%). All are aggressively building out their AI capacity. And, just as important, as an independent power producer, Constellation Energy operates outside of the regulatory framework.
Essentially, it sells power directly to companies, so the technology giants it is working with don't have to go to the local regulated utility for power. Rising demand from AI data centers has been blamed for higher consumer electricity costs, but working with Constellation means companies are bringing in their own power. That's an important phrase, because AI companies are increasingly being pushed to do just that. The agreement with Google "offers a direct response to PJM's 'Bring Your Own Power' proposal," according to the two companies.
Constellation Energy has the scale and reach tech giants need Working outside of the regulated utility framework is an important reason why Constellation Energy is being tapped by so many tech companies. However, there's still more to the story.
Notably, Constellation Energy is the largest owner and operator of nuclear power plants in the United States. It has the scale and expertise to take on large power supply deals. Geographic reach is part of the equation, since the company has generating assets spread across the continental United States.
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That said, there's another important detail here. While nuclear is at the heart of many of the company's big AI power supply agreements, that's not all that Constellation Energy does. It also operates a large fleet of natural gas generating plants. And it has wind, solar, and hydroelectric power facilities, as well. So it can provide a suite of solutions for its tech customers, allowing them to work with a single provider rather than creating a patchwork of relationships.
Constellation wins with long-term contracts There is a host of reasons why technology companies are choosing Constellation Energy, and they all amount to a big win for this independent energy provider. Each agreement typically creates a long-term income stream for the company, often lasting up to 20 years. That supports a solid growth story and creates a snowball effect, as the company's position in the industry is further solidified.
In other words, it is reasonable to expect more major power deals, nuclear and otherwise, for Constellation Energy in the future. It is also worth noting that companies outside of tech, including Walmart (WMT +0.90%), have been working with Contellation, as well. While the stock probably won't interest value or dividend investors, given its lofty 29x price-to-earnings ratio and tiny 0.5% yield, growth investors may want to take a closer look as this independent power producer continues to expand its already strong position in the industry.
Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Constellation Energy, Meta Platforms, Microsoft, and Walmart. The Motley Fool has a disclosure policy.
Key Takeaways Constellation Energy signed a 20-year Google PPA to add 890 MW of new nuclear capacity to the PJM grid. Google's deal supports over $4.3 billion in upgrades to 11 CEG nuclear units, starting in 2028. CEG also secured a 15-year supply deal for 2,700 MW of existing PJM generation, boosting revenue certainty. Constellation Energy Corporation (CEG - Free Report) is strengthening its long-term prospects by securing power agreements with large customers seeking reliable, emissions-free electricity. These contracts can provide revenue visibility while supporting investments in the company’s nuclear fleet.
On Oct. 6, 2026, CEG announced a 20-year power purchase agreement (PPA) with Google to add 890 megawatts (MW) of new nuclear capacity to the PJM grid. The agreement will support more than $4.3 billion of investment in upgrades to 11 CEG-owned nuclear units, with the first uprate expected in 2028.
The deal also includes a 15-year energy supply agreement covering 2,700 MW of existing PJM generation, providing greater revenue certainty and supporting the continued operation of Constellation Energy’s generating assets. CEG will use Google Cloud and Gemini Enterprise to enhance asset performance, optimize power dispatch and improve energy operations.
In the second quarter of 2026, CEG signed 920 MW of long-term PPAs with investment-grade customers. The contracts had an average duration of 18.5 years and are expected to be fully ramped by 2032. Recently, CEG also signed a 20-year PPA with Amazon covering 690 MW, including 190 MW of new nuclear capacity. The agreement supports more than $3 billion in Maryland infrastructure investments through 2032.
CEG expects nearly $5.7 billion in capital expenditures in 2026 and $4.7 billion in 2027, supporting investments in growth opportunities. Thus, Google’s agreement supports CEG’s growth through new nuclear capacity, contracted revenues, asset investments and rising AI-driven electricity demand.
Long-Term PPAs Strengthen Utility Growth ProspectsLong-term PPAs provide utilities with predictable revenues, improving cash-flow visibility and supporting investment in generation assets. Such agreements also help fund capacity expansions while meeting rising electricity demand.
Vistra Corp. (VST - Free Report) benefits from long-term nuclear PPAs with Meta and AWS, strengthening contracted revenue visibility. In second-quarter 2026, Vistra indicated that these agreements could lift Retail and contracted revenue sources to nearly 50% of EBITDA.
NextEra Energy (NEE - Free Report) benefits from a large contracted development pipeline that supports future growth visibility. Energy Resources added 3.6 GW of generation and storage to its backlog during second-quarter 2026, lifting the total backlog to approximately 35.1 GW.
The Zacks Rundown on CEGCEG’s Earnings EstimatesThe Zacks Consensus Estimate for 2026 and 2027 EPS indicates an increase of 29.82% and 8.76%, respectively, year over year.
Image Source: Zacks Investment Research
CEG’s Returns on Equity (ROE)Constellation Energy's trailing-12-month ROE is 14.89%, ahead of the industry average of 8.28%.
Image Source: Zacks Investment Research
CEG’s Stock Price PerformanceIn the past three months, the company’s shares have risen 23.2% against the industry’s 6.3% decline.
Constellation Energy Corporation (CEG) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might help the stock continue moving higher in the near term.
Australian uranium miners logged their best session in weeks on Wednesday after Alphabet's Google agreed to buy power from US nuclear energy major Constellation Energy , potentially raising the demand for uranium.
Shares of Constellation Energy (CEG +12.25%) rallied 11.4% on Tuesday as of 3:25 p.m. EDT.
Constellation made news today after inking a huge deal with Alphabet (GOOG +0.22%) (GOOGL +0.35%), under which Constellation will upgrade and expand its nuclear power capacity to the PJM power grid, supplying more of Alphabet's AI data centers in that area.
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Alphabet to help upgrade Constellation's nuclear power units Today, Alphabet and Constellation signed a comprehensive power purchase agreement that will enable Constellation to supply additional nuclear power to the PJM electricity grid, which stretches from the mid-Atlantic region to Illinois, and fuel Alphabet's fast-growing AI data center footprint in those areas.
There are multiple parts to the deal. First, Alphabet signed a 20-year, 890-megawatt (MW) power purchase agreement with Constellation, which will enable Constellation to invest an additional $4.3 billion to boost capacity from its nuclear units in Illinois, Pennsylvania, and New Jersey.
On top of that, Alphabet signed a 15-year, 2,700-MW PPA with Constellation for additional power from the PJM grid, extending the useful life of existing power assets. Constellation also signed a five-year deal with Google Cloud, under which Constellation will use Gemini Enterprise, Alphabet's enterprise AI offering, to enable lower-cost, efficient power production across its footprint.
Constellation CEO Joe Dominguez noted in the press release:
This long-term clean energy collaboration with Google can serve as a model for how technology companies and the energy industry can work together to responsibly develop the digital economy and invest in our nation's energy infrastructure in a way that delivers gridwide benefits for all, funded by private entities.
Image source: Getty Images.
Turning down the heat The rapid expansion of AI data centers across the U.S. has sparked political backlash and raised concerns among some AI investors over the summer. However, it appears that at least some of those concerns, specifically about pollution and higher electricity costs for consumers, are mitigated by deals like this.
Alphabet is paying its own way in this case, relieving consumers from the burden of Constellation's expansion, and is also contributing AI tools to help lower costs and bring on more carbon-free energy to the grid.
This is perhaps part of why Berkshire Hathaway chose Alphabet as its big AI bet and participated in Alphabet's June equity offering to raise nearly $85 billion. Well-funded tech giants have the capacity to invest in AI data centers and also help mitigate the environmental and cost concerns that accompany them. So perhaps for all the focus on the newer AI labs that may go public soon, it may very well be deep-pocketed tech giants like Alphabet, which can shoulder more of the cost burden, that will thrive in the agentic AI age.
Billy Duberstein and/or his clients have positions in Alphabet and Berkshire Hathaway. The Motley Fool has positions in and recommends Alphabet, Berkshire Hathaway, and Constellation Energy. The Motley Fool has a disclosure policy.
FuelCell Energy Inc. (NASDAQ:FCEL) climbed Tuesday after a major nuclear power deal between Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Constellation Energy Corp. (NASDAQ:CEG) gave traders fresh evidence that demand for AI computing power is far from slowing down.
FCEL stock climbed Tuesday. See the chart and price action here. Google’s Big Power BetGoogle and Constellation Energy signed a 20-year power purchase agreement to add 890 megawatts of new nuclear capacity to the PJM grid.
The power will come from upgrades at 11 existing Constellation reactors in Illinois, Pennsylvania and New Jersey. Constellation will put more than $4.3 billion into the project.
The first upgrade is due by 2028, and all 890 megawatts should be online by the end of 2032. In total, Google has contracted for 3,590 megawatts from Constellation. When a hyperscaler signs up for power for two decades, it suggests the data center buildout still has a long way to go.
Constellation ended Tuesday’s session up 12.25%, per Benzinga Pro market data. Investors are also buying smaller names that can get electricity to data centers faster than new grid connections can.
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Why FuelCell BenefitsFuelCell Energy sells fuel cell systems that produce power on-site, so data centers don’t have to wait in line for the grid. As tech giants hunt for every megawatt they can get, bulls see FuelCell’s on-site power as a way to fill the gap while large projects like Google’s uprates take years to finish.
Other alternative data center power names like Bloom Energy (NYSE:BE) and Generac Holdings Inc (NYSE:GNRC) also moved higher on Tuesday.
Short Interest Adds FuelShort sellers are making the stock more volatile. About 24.9 million FuelCell shares, or 31.19% of the float, were sold short as of Sept. 15, according to Benzinga Pro short interest data.
With that many bearish bets, a rally like Tuesday’s can push shorts to buy back shares, which pushes the price even higher and can lead to a feedback loop where shorts cover and the stock price climbs.
FCEL Price ActionFuelCell stock has traded between $5.71 and $37.88 over the past 52 weeks. Even with Tuesday’s gain, the stock is about 45% below that high. FCEL shares closed up 14.28% at $20.65 Tuesday afternoon, according to Benzinga Pro data.
Photo: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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The most interesting thing about Constellation Energy Corp‘s (NASDAQ:CEG) latest AI-power deal is not simply that Alphabet Inc‘s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google needs more electricity.
It is that one of the biggest names in technology is effectively helping turn Constellation’s nuclear fleet into long-duration infrastructure for the AI economy — potentially validating a $1.2 billion position held by billionaire investor Philippe Laffont’s Coatue Management LLC.
Google Locks In Nuclear PowerGoogle has signed a 20-year agreement covering 3.59 gigawatts of electricity from Constellation, including 890 megawatts of additional nuclear capacity and another 2.7 gigawatts from Constellation’s existing PJM fleet. The agreement is expected to support more than $4.3 billion of investment across 11 nuclear units in Illinois, Pennsylvania and New Jersey. The first incremental capacity is expected to come online in 2028.
That matters because the AI buildout is increasingly running into a basic physical constraint: electricity. Data centers can be built faster than new generation and transmission can be added, making reliable existing power assets more valuable to hyperscalers.
Constellation has been positioning itself around that shortage. In its second-quarter results, CEO Joe Dominguez said the company was "strengthening the nation’s energy infrastructure" while meeting growing demand for reliable power. Constellation also raised its 2026 adjusted operating earnings guidance to $11.50-$12.50 per share and said it had signed another 920 megawatts of long-term power purchase agreements.
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Laffont Already Had $1.2 Billion RidingThat makes Coatue’s position particularly interesting.
The investment firm, founded by Laffont, reported owning 4.63 million Constellation shares worth about $1.15 billion at June 30, according to its second-quarter 13F filing. The position represented about 2.37% of Coatue’s reported portfolio.
The filing does not reveal why Coatue owned the shares, nor whether the firm still holds the same position today. But the broader portfolio offers useful context. Coatue also held sizable positions in Alphabet, Amazon.com, Inc. (NASDAQ:AMZN), GE Vernova Inc. (NYSE:GEV), Eaton Corp (NYSE:ETN) and other companies tied to AI infrastructure and rising electricity demand.
That makes Constellation look less like an isolated nuclear bet and more like one piece of a broader infrastructure thesis.
Can Constellation Reverse Its Losses?The timing is notable. Constellation shares entered Tuesday still down 26.93% year to date, despite a 35.15% discount to their 52-week high as of Monday’s close. Shares jumped nearly 6% in premarket trading Tuesday following the Google news.
The stock therefore does not need another AI narrative as much as it needs evidence that the narrative can translate into durable earnings.
Google is providing some of that evidence. Amazon signed a separate 20-year agreement with Constellation last week that supports more than $3 billion of investment at Maryland’s Calvert Cliffs plant, while Constellation already has major agreements involving Microsoft Corp (NASDAQ:MSFT) and Meta Platforms, Inc. (NASDAQ:META).
For investors, the next question is whether these long-term hyperscaler contracts can turn Constellation’s nuclear advantage into the earnings growth the market has been waiting for.
If they can, Laffont’s $1.2 billion position could look increasingly prescient; if not, the stock’s steep 2026 decline may prove harder to reverse.
Buy Constellation Energy (CEG). Google will fund nuclear uprates at 11 facilities, adding 890 MW of zero-carbon capacity quickly versus new-build timelines. That should translate into higher, steadier cash flow and supports the recent guidance lift, while the stock still trades at a relatively modest ~21x forward P/E versus its own history. Key risk: PJM/regulatory delays or denials slow or shrink the uprate schedule, turning the “immediate incremental MW” story into a multi-year wait and crushing near-term earnings power.
Key Risk: Regulators or PJM block/delay the uprates, cutting the incremental MW and cash-flow timeline.
Nuclear utilities basket sell/avoid
Sell or avoid the weaker nuclear-adjacent names that don’t have a similar hyperscaler-funded pipeline—specifically Exelon (EXC) and Duke Energy (DUK) on a relative basis. The Google/CEG deal is a funding model shift: hyperscalers pay for grid capacity, so the market will re-rate the operator with the clearest, fastest path to incremental MW. Key risk: competitors land comparable long-term data-center/offtake deals, forcing the market to broaden the re-rating beyond CEG.
Key Risk: Other utilities secure similar hyperscaler-funded nuclear/grid deals, erasing CEG’s relative advantage.
Constellation Energy CEG shares are ripping higher on October 6th after management announced a massive clean energy partnership with Google.
The agreement will see Google invest in nuclear uprates across 11 of CEG facilities in three states. The deal brings 890 MW of fresh, zero-carbon capacity to the critical PJM grid serving 67 million people.
The news adds to momentum in Constellation Energy stock as it attempts to stage a comeback. At writing, it’s up more than 20% versus its low in late September.
The strategic pairing with Google is largely constructive for CEG shares.
Estimated at about $4.3 billion over a 20-year horizon, the contract funds efficiency and equipment uprates – modernizing turbines, steam generators, and digital systems across operating facilities.
Instead of waiting five to 10 years for complex greenfield reactor construction, reactor uprates will enable Constellation to squeeze hundreds of incremental megawatts from its existing infrastructure almost immediately.
Note that the Google deal aligns perfectly with PJM’s “Bring Your Own Power” framework, proving that hyperscale data centers can expand AI infrastructure by privately funding grid capacity rather than shifting financial burdens onto retail utility customers.
For Constellation, it locks in guaranteed, high-margin cash flow backed by an elite balance sheet.
Investors looking for exposure to the booming AI power demand have plenty of reasons to consider Constellation Energy shares at current levels.
Despite today’s gains, the clean energy stock remains discounted compared to its price at the start of 2026.
In other words, at a forward price-to-earnings (P/E) multiple of about 21x, CEG is trading well below its historical high-water valuation despite improving fundamentals.
As the largest operator of nuclear power plants in the US, Constellation holds an unmatched, clean baseload footprint, which is partly why management recently raised its full-year adjusted operating earnings guidance to about $12 per share.
However, prospective buyers should balance their enthusiasm with patience.
Regulatory reviews for plant modifications can still encounter bureaucratic friction, and long-term tech contracts take time to fully reflect in quarterly earnings.
All in all, the mega-deal signals a “pivotal shift” in how Silicon Valley solves its immense energy hunger.
Rather than relying on intermittent renewables or dirty fossil fuels, tech leaders are willing to sign multi-decade offtake agreements to guarantee uninterrupted, clean electricity.
By turning existing reactors into powerhouses of extra generation, CEG establishes the operational playbook for clean power providers nationwide.
While market volatility is bound to trigger occasional pullbacks, the broader tailwinds surrounding nuclear power have rarely been stronger.
In conclusion, Constellation Energy sits right in the sweet spot of the global energy transformation, making today’s Google-fueled surge in CEG stock look less like a temporary flash and more like the start of a sustained growth phase.
Alphabet has agreed to buy 20 years of nuclear power from Constellation Energy, covering 890 megawatts of new power that Constellation will spend $4.3 billion to bring online on the PJM grid. Yahoo Finance Host Julie Hyman, Breaking Business News Reporter Jake Conley and Senior Autos Reporter Pras Subramanian break down Big Tech's growing list of nuclear deals, why power has become one of the AI buildout's biggest bottlenecks, why behind-the-meter power may only temporarily ease stress on the grid, and why utility stocks, including Constellation, are lagging the rest of the AI infrastructure trade.
Constellation Energy Corp (NASDAQ:CEG) stock is up 8% before the bell, after the utility company signed a 20-year agreement with Google to bring 890 megawatts of nuclear energy to the PJM power grid.
Futures indicate the S&P 500 (SPX) is knocking on the door of a new all-time high, though Kevin Green says there are key technicals to watch if the index breaks out. A downtick in crude oil prices is another key factor backing bullish sentiment Tuesday morning.
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Technologický konglomerát Alphabet je prý blízko dohody o nákupu jaderné energie od společnosti Constellation Energy, největšího provozovatele jaderných reaktorů v USA. Uvedly to pro agenturu Bloomberg zdroje obeznámené s jednáním. Dceřiná společnost Google by údajně během několikaleté smlouvy měla zaplatit 1 mld. USD nebo více, přičemž oznámení dohody se očekává již tento týden.
Agentura Bloomberg uvádí, že technologické firmy soupeří o zajištění dodávek elektřiny pro rychle rostoucí datová centra a jaderná energie je pro ně atraktivní díky nepřetržitým a bezemisním dodávkám. Podobnou dohodu s Constellation Energy uzavřel minulý týden Amazon, který se zavázal nakoupit 690 MW výkonu.
Google už má s výrobci jaderné energie uzavřeno několik dohod. Loni se domluvil na odběru elektřiny od NextEra Energy a minulý měsíc si zajistil novou kapacitu od Southern Co. financováním modernizace dvou jaderných elektráren.
Představení společnosti Zajímá vás společnost Alphabet? Přečtěte si první a druhý díl podrobného představení společnosti.
Vývoj akcií Akcie společnosti Constellation Energy (CEG) zaznamenávají v předburzovní fázi obchodování růst o 3,48 % na 276,94 USD.
Akcie Alphabet třídy A (GOOGL) v předburzovní fázi posilují o 0,59 % na 348,5 USD. Akcie třídy C (GOOG) zaznamenávají růst o 0,49 % na 345,5 USD. S akciemi Alphabet mohou klienti Fio banky obchodovat také na RM-SYSTÉMu pod tickerem BAAGOOGL, kde se naposled zobchodovaly za 7 390 Kč.
Key Takeaways Constellation issued $5.0B of long-term debt and retired $5.35B in the first six months of 2026.CEG identified $3.9B of growth capital for 2026-2027 to support its expanding generation portfolio. CEG expects $11.5-$13B of free cash flow before growth during 2028-2029, strengthening capital flexibility. Constellation Energy Corporation’s (CEG - Free Report) financing strategy provides flexibility to fund growth investments while maintaining an investment-grade balance sheet. The strategy is becoming increasingly important as the company expands its generation portfolio and pursues opportunities following the Calpine acquisition.
In the first six months of 2026, CEG issued $5.0 billion of long-term debt and retired $5.35 billion, helping manage its debt obligations following the Calpine acquisition. As of June 30, total long-term debt was $19.6 billion, including $13.0 billion of senior unsecured notes. At the end of second-quarter 2026, CEG’s Times Interest Earned ratio of 7.5 indicates sufficient capacity to meet its interest obligations.
The company issued $2.2 billion of senior notes in May, comprising $750 million of 4.55% notes due 2029, $600 million of 4.80% notes due 2032 and $850 million of 5.30% notes due 2036. The proceeds were used to repay short-term borrowings and for general corporate purposes.
CEG’s strong financing capacity supports its capital allocation strategy. The company identified $3.9 billion of growth capital for 2026-2027 and expects $11.5-$13 billion of free cash flow before growth during 2028-2029. Its BBB+ and Baa1 investment-grade ratings further enhance financial flexibility.
Prudent Debt Management Supports Utility GrowthPrudent debt management helps utilities maintain financial flexibility and fund essential infrastructure without significantly weakening credit quality. A balanced financing approach also supports generation investments, acquisitions and long-term growth.
PPL Corporation (PPL - Free Report) had $3.48 billion of unused credit capacity as of June 30, 2026, providing substantial liquidity for capital investments while limiting reliance on short-term borrowings.
Vistra (VST - Free Report) maintained $6.3 billion of available liquidity as of June 30, 2026, while repaying term loans, credit-facility borrowings and senior notes, supporting financial flexibility for future investments.
The Zacks Rundown on CEGCEG’s Earnings EstimatesThe Zacks Consensus Estimate for 2026 and 2027 EPS indicates an increase of 29.82% and 8.76%, respectively, year over year.
Image Source: Zacks Investment Research
CEG’s Returns on Equity (ROE)Constellation Energy's trailing-12-month ROE is 14.89%, ahead of the industry average of 8.28%.
Image Source: Zacks Investment Research
CEG’s Stock Price PerformanceIn the past three months, the company’s shares have risen 6.4% against the industry’s 13.6% fall.
Investors might want to bet on Constellation Energy Corporation (CEG - Free Report) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.
A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.
The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. These are mostly driven by subjective factors that are hard to see and measure in real time.
Therefore, the Zacks rating upgrade for Constellation Energy Corporation basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.
Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.
Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Constellation Energy Corporation imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.
Harnessing the Power of Earnings Estimate RevisionsEmpirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, so it could be truly rewarding if such revisions are tracked for making an investment decision. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .
Earnings Estimate Revisions for Constellation Energy CorporationFor the fiscal year ending December 2026, this company is expected to earn $12.19 per share, which is unchanged compared with the year-ago reported number.
Analysts have been steadily raising their estimates for Constellation Energy Corporation. Over the past three months, the Zacks Consensus Estimate for the company has increased 3.8%.
Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
The upgrade of Constellation Energy Corporation to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Let's take a look at what these Wall Street heavyweights have to say about Constellation Energy Corporation (CEG - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Constellation Energy Corporation currently has an average brokerage recommendation (ABR) of 1.55, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 20 brokerage firms. An ABR of 1.55 approximates between Strong Buy and Buy.
Of the 20 recommendations that derive the current ABR, 14 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 70% and 5% of all recommendations.
Brokerage Recommendation Trends for CEG
Check price target & stock forecast for Constellation Energy Corporation here>>>
The ABR suggests buying Constellation Energy Corporation, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is CEG Worth Investing In?Looking at the earnings estimate revisions for Constellation Energy Corporation, the Zacks Consensus Estimate for the current year has increased 0.4% over the past month to $12.19.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Constellation Energy Corporation. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Constellation Energy Corporation may serve as a useful guide for investors.
GE Vernova and Constellation both feed the AI power boom, but their Q2 results reveal a widening gap in momentum, valuation, and regulatory risk that points toward one clearer opportunity for investors right now.
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GE Vernova (NYSE:GEV | GEV Price Prediction) and Constellation Energy (NASDAQ:CEG) reported second-quarter 2026 results. GE Vernova makes turbines and grid equipment for data centers. Constellation sells electricity from the largest private U.S. power fleet. GE Vernova supplies the equipment. Constellation owns the generation.
Gas Turbines Sell Out While Nuclear Outages Bite GE Vernova booked $24.20B in orders, up 88% organically, pushing its backlog to a record $176B. First-half equipment orders were priced more than 20% above fourth-quarter 2025 orders. Data center orders exceeded $5B year to date, more than double 2025. Wind losses are expected at about $400M EBITDA for 2026.
Constellation’s adjusted EPS of $2.55 beat $2.33 consensus, but net income fell 39% as refueling outage days rose to 86 from 41. New nuclear contracts reached 920 megawatts averaging 18 and a half years, including a first nuclear PPA for Walmart (NASDAQ:WMT).
Business Driver GE Vernova Constellation Main Growth Engine Gas turbines and grid gear Long-term nuclear PPAs AI Customer Link Data center electrification orders Hyperscaler and corporate power contracts Main Drag Wind losses Outage days, merger costs One Raises Prices While the Other Waits on Regulators GE Vernova plans to lift annual gas turbine output from 20 GW toward 30 GW in 2030, funded largely by customer down payments. Second-quarter free cash flow reached $5.10B, topping all of fiscal 2025. CEO Scott Strazik said “GE Vernova’s momentum is building, and we are raising our 2026 financial guidance.”
Constellation says that existing plants should carry early AI demand. CEO Joe Dominguez said the expansion “is going to rely heavily, in my view, on existing generation.” Policy timing is the problem. Management expects clarity on PJM co-location rules in the first to second quarter of 2027, and Dominguez said “the worst thing for deal execution is ambiguity and uncertainty.”
Lens GE Vernova Constellation Forward P/E 39x 21x Year-to-Date Stock Move 51.55% -26.78% Key Vulnerability Production increase execution PJM and FERC rule timing Investors are already paying a premium for GE Vernova’s order growth. Constellation’s lower valuation coincides with uncertainty over how regulators will rule (we covered seven companies supplying the AI data-center expansion, from power to grid gear, in a free report you can grab here).
Slot Conversions and PJM Rules Decide What Comes Next I will be watching whether GE Vernova reaches 125 GW of gas equipment under contract by year-end. For Constellation, keep an eye on the Crane restart, targeted for 2027, and on a PJM response expected around November.
How GE Vernova and Constellation Stack Up for the AI Buildout GE Vernova has the wider exposure to AI power demand. It sells to utilities, hyperscalers and grid operators across 26 countries, with rising prices. Paying 39x forward earnings is steep; any turbine increase stumble would hurt the stock.
Constellation’s case rests on regulatory clarity. Raised adjusted EPS guidance of $11.50 to $12.50 signals management confidence. Clear FERC co-location rules in early 2027 would remove a key uncertainty.
Contact [email protected] for any questions or corrections.
The nuclear renaissance has arrived. At least that's the opinion of a growing number of Wall Street firms.
"After decades of underinvestment, a convergence of generational technological breakthroughs, intensifying geopolitical competition, and the need for clean, dense, reliable power are positioning nuclear energy for a renaissance," concludes a report from Goldman Sachs.
The force behind nuclear's rise is clear.
"After being roughly flat for years, data centers' demand for power is expected to accelerate 175% by 2030 (from 2023 levels)," Goldman Sachs observes. "This is the equivalent of another top 10 power-consuming nation coming online."
Want to get exposure to the nuclear renaissance? There are three obvious ways to invest in this multi-decade opportunity.
Image source: Getty Images.
1. SMR stocks like NuScale Power and Oklo Inc. One of the most popular ways to invest in nuclear energy right now is by buying shares of companies developing small modular reactors, or SMRs. The two largest pure-play SMR stocks are NuScale Power (SMR +0.14%) and Oklo Inc. (OKLO -0.79%).
NuScale is focused on selling SMR systems to utility operators. Oklo, meanwhile, sells directly to artificial intelligence data centers -- the culprits behind the spike in energy usage globally.
NuScale's approach makes sense if you believe most energy users, including AI data center businesses, will prefer a traditional grid connection. Because SMRs are cheaper and faster to deploy than conventional nuclear power plants, utility operators can get more nuclear power online quickly by deploying NuScale's SMR systems.
Oklo, meanwhile, intends to advantage of SMR's relatively small footprint by co-locating these facilities near the AI data centers themselves. AI companies are deploying billions of dollars to scale energy infrastructure, and Oklo is betting that its go-to-market approach will cut out the utility middleman and appeal directly to deep-budgeted big tech firms.
2. Traditional utilities betting on nuclear power Another approach is to buy electric utility stocks rather than buy the developers of nuclear energy systems themselves. Constellation Energy (CEG -1.75%), for example, is the largest U.S. nuclear fleet operator. It already has long-term power purchase agreements with big tech firms, including Microsoft. The company is restarting old nuclear facilities, including the Three Mile Island nuclear plant. It even directly invested in Blue Energy, an SMR start-up.
Utility stocks may not have as much upside as pure-play SMR stocks, but they're directly exposed to rising energy demand for nuclear power.
3. Uranium ETFs "Nuclear energy has a 'monopoly' on uranium reserves," research from Bank of America concludes. According to the bank, around "99% of the Earth's mined uranium goes toward this type of power generation."
Investors, therefore, may be wise to gain direct exposure to uranium through an ETF such as the Roundhill Uranium ETF (UX -0.08%). This ETF is relatively new, and its expense ratio is on the higher end at 0.77%. But investors have other uranium options as well, including the Global X Uranium ETF (URA +0.24%), which has more than $5 billion in assets, plus a slightly more palatable 0.69% expense ratio. Just understand that this ETF gives you exposure to uranium miners and nuclear component manufacturers -- so it tracks far more than the physical price of uranium.
Bank of America is an advertising partner of Motley Fool Money. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy, Goldman Sachs Group, and Microsoft. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.
Key Takeaways CEG signed a 20-year Amazon PPA for 690 MW, including about 190 MW of new nuclear capacity. The deal supports over $3 billion in Maryland investments and Calvert Cliffs' 20-year relicensing. CEG signed about 920 MW of long-term PPAs in Q2 2026, averaging 18.5 years and ramping fully by 2032. Constellation Energy Corporation (CEG - Free Report) is expanding its portfolio of long-term power purchase agreements (PPAs) as large customers seek reliable, emissions-free electricity. These contracts provide greater revenue visibility and support investments in existing nuclear facilities and new generating capacity.
On Sept. 30, 2026, CEG announced a 20-year power purchase agreement with Amazon covering 690 megawatts (MW) of power, including approximately 190 MW of new nuclear capacity at the Calvert Cliffs Clean Energy Center. The agreement is expected to enable more than $3 billion in Maryland infrastructure investments, including improvements across the plant’s entire 1,790-MW generating capacity. The capacity expansion is expected to be completed between 2030 and 2032. The agreement will provide CEG with revenue certainty to support the relicensing of Calvert Cliffs’ for another 20 years.
In the second quarter of 2026, CEG signed approximately 920 MW of long-term PPAs with diverse, investment-grade customers. The contracts have an average duration of 18.5 years and are expected to be fully ramped by 2032. The company also signed a 176-MW agreement with Walmart, including 30 MW of expanded capacity at the Dresden Clean Energy Center.
CEG’s financial position provides a funding base for these investments. In the first six months of 2026, CEG invested $2.52 billion and expects capital expenditures of approximately $5.7 billion in 2026 and $4.7 billion in 2027.
Thus, long-term contracts can provide revenue visibility and support investments in nuclear capacity and infrastructure.
Long-Term PPAs Support Utility GrowthLong-term power purchase agreements provide utilities with greater revenue visibility while supporting investments in generation capacity and reliability. They can also fund plant upgrades and capacity additions to meet rising electricity demand.
NextEra Energy (NEE - Free Report) benefits from a 25-year agreement with Google that supports the planned 615-MW Duane Arnold nuclear restart, providing long-term revenue visibility while addressing rising electricity demand.
Vistra Corp. (VST - Free Report) benefits from long-term PPAs with Meta, which enhance revenue visibility for its PJM nuclear assets and are expected to begin contributing to adjusted EBITDA from 2027.
The AI industry continues to grow rapidly. Future growth, however, isn't guaranteed. That's not because the world won't need more artificial intelligence. Rather, scaling AI compute power will quickly encounter other growth constraints.
Number one is access to capital. So far, this hasn't been much of an issue. Markets have been keen to provide AI companies with plenty of fresh cash. That's good news considering AI technologies rely on data centers, which are capital-intensive. If capital grows scarce, industry growth rates will quickly come under pressure.
Scaling data center infrastructure, however, comes with its own growth constraints.
"Capital is pouring into data center development, but there are real constraints on growth," warns McKinsey & Co. "The race to scale AI has triggered one of the largest infrastructure build-outs in modern history. By our estimates, global spending on data centers could reach $7 trillion by 2030. Whether a build-out is successful depends on many nuances, including the availability of capital and energy resources."
These are the two major challenges the AI industry will have to continually overcome to grow: access to capital and access to energy.
Because energy is so critical to powering data centers -- which, in turn, are critical for enabling artificial intelligence itself -- major AI companies are making big moves to ensure they have enough energy long term. That includes negotiating directly with energy system manufacturers and utility operators.
This week, Amazon (AMZN -0.37%) announced a 20-year deal with Constellation (CEG +1.93%) for access to nuclear power. The agreement will direct $3 billion in investment to expand one of Constellation's existing nuclear facilities. Notably, the energy production will be delivered to the grid as usual. So Amazon's partnership will add to the region's overall energy generation capacity rather than exclusively reserving the new power production for itself.
Amazon's strategy makes a lot of sense. Investing directly in nuclear power by expanding existing facilities is cost effective. And, more power production regionally helps the company minimize price increases as a result of its rising energy needs.
Constellation, of course, will be a direct benefactor. But there's one other nuclear stock that this deal should indirectly help.
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I like this nuclear stock even more after Amazon's announcementWhat Amazon helped prove today is that AI companies are willing to go through traditional grid operators to scale regional power production. That's good news for NuScale Power (SMR -1.39%), which aims to build small modular nuclear reactors for utility companies.
Image source: The Motley Fool
For comparison, Oklo Inc. (OKLO -2.38%) is also pursuing small modular reactors. Instead of marketing its systems to utilities, however, Oklo has opted to sell directly to AI companies. In return, it has generated an impressive customer pipeline of data center operators. Though, most of its deals are non-binding, and none of its SMR deals have yet reached commercial production.
NuScale, on the other hand, has closed two sizable deals with utility operators. The first is a relatively small system in Romania. The other -- a 6-gigawatt system in the eastern U.S. -- would be the biggest SMR facility in the world if it ever gets built.
To be clear, Amazon's deal with Constellation has no direct link to NuScale. What's encouraging, however, is another proof point that AI companies aren't necessarily looking to disintermediate utility companies. Instead, they're willing to help finance additional nuclear production to meet their needs through increased regional energy generation. That's great news for NuScale's go-to-market strategy.
Two nuclear ETFs tell completely different stories about who wins when atomic energy expands, and owning the wrong one could mean riding a single commodity price instead of the broader industrial buildout.
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If you own the Global X Uranium ETF (NYSEARCA:URA) to capture the nuclear power expansion, one stock drives a big share of your returns. URA’s July 31, 2026 SEC filing shows Cameco (NYSE:CCJ | CCJ Price Prediction) at 22.18% of net assets. The VanEck Uranium & Nuclear ETF (NYSEARCA:NLR) held the same miner at 8.41% in its June 30, 2026 filing. URA holders get a liquid, well-known uranium vehicle with a stronger ten-year record; however, NLR packages the same nuclear story with a very different weighting.
NLR Owns the Whole Nuclear Supply Chain NLR spreads 26 positions across every link that turns uranium into electricity. Reactor operators sit near the top, led by Constellation Energy (NASDAQ:CEG) at 8.04%, Public Service Enterprise Group at 7.09%, and Finland’s Fortum at 5.75%. These companies sell power from plants already running, linking revenue to electricity demand rather than a spot commodity price.
Miners such as Cameco supply the fuel. Equipment maker BWX Technologies (NYSE:BWXT) holds 6.78%, KEPCO Engineering & Construction adds 2.49% as the plant-building leg, and enrichment developer Silex Systems contributes 1.72%. Oklo, at 5.22%, is a speculative, pre-revenue reactor developer and carries far more risk than a regulated utility like PSEG. Fortum, KEPCO E&C and Silex trade on foreign exchanges, so most U.S. investors reach them through the fund.
URA Reaches Past Miners, but Cameco Still Dominates URA is wider than its reputation. Its July filing lists 86 positions, including Mitsubishi Heavy Industries at 2.04% and Doosan Enerbility at 1.96%. The top remains heavy with Cameco, followed by Sprott Physical Uranium Trust at 6.74% and NexGen Energy at 6.07%.
The Sprott trust stores physical uranium. It has no mines, operating costs, or earnings, so its value tracks the uranium price almost directly, which sharpens URA’s sensitivity to the commodity. NLR holds a smaller physical stake through Yellow Cake at 2.79%, offset by its utility weight.
Five Years Favor NLR, Ten Years Favor URA Price Change URA NLR Year to date -6.2% -16.36% One year -13.71% -22.16% Five years 105.7% 120.36% Ten years 329.19% 182.91% NLR trailed badly over the past year, led over five years, and is far behind over ten years. These figures exclude distributions. Returns from broadening across the chain have been mixed, so the case for NLR depends on risk shape, with less riding on one miner and one commodity price.
A Sector-Wide Selloff Hit Both Funds Equally Over the past month, NLR fell 12.06%, and URA fell 12.05%. Over one week, NLR lost 7.21% and URA 8.37%. Utilities, miners, and reactor developers moved together when nuclear sentiment turned, so chain-wide exposure offered little shelter.
As of September 30, 2026, NLR traded near 103.88 and URA at 40.08.
Fees, Fund Size and a Tax-Aware Switch NLR’s stated expense ratio is 0.52% — lower than URA’s 0.69%. NLR reported net assets of $4.2 billion as of June 30, 2026, while URA reported $5.4 billion as of July 31, 2026.
The funds overlap heavily, with Cameco, NexGen, Oklo, Kazatomprom, Paladin, and Centrus in both, so a switch mainly re-weights exposure. In a taxable account, selling URA at a gain triggers capital gains tax, and long-term holders may sit on large gains after URA’s ten-year run. An IRA or 401(k) allows a swap without a tax bill.
Match the Fund to the Nuclear Thesis You Hold URA suits an investor who wants concentrated exposure to the uranium price itself through a large Cameco stake, a physical uranium trust, and a stronger ten-year record. NLR suits an investor who wants to own the expansion as an industrial story, with reactor operators, equipment makers, and builders alongside miners. For readers who prefer picking the names directly, we listed five of our favorites across utilities and fuel in a free nuclear report here). For that second goal, NLR’s holdings line up more closely with the thesis.
Contact [email protected] for any questions or corrections.
Download this episode on Apple Podcasts/Spotify or listen below:
Chris Ciaccia, Senior Editor of technology at Seeking Alpha, shares why today's news out of Constellation Energy and Amazon is really all about AI (0:30) Oracle getting away from being incredibly reliant on OpenAI (2:25) Micron's outstanding numbers (4:55)
Transcript
Rena Sherbill: Welcome to a new month. It is October 1st. Today I am with a very special guest, senior editor of technology on our news team. It's Mr. Chris Ciaccia. And I am very happy to have him here as we go through all the news headlines that we have today and from our Wall Street Breakfast Podcast.
We have Constellation Energy (CEG) securing a 20 year power agreement with Amazon (AMZN), which supports investment in Calvert Cliffs nuclear plant expansion.
Chris, what would you say about this mega deal this morning?
Chris Ciaccia: So this is really all about AI, Rena. And I feel like that's the theme of today. And that's the theme of basically every day. This gives Amazon cost certainty over 20 years to build out its data centers and for AWS and for AI.
This gives Constellation another mega tenant, like they did the deal with Microsoft (MSFT) a few years ago. So this is all about AI and really the building out of nuclear power and that nuclear power renaissance that we've seen over the past few years.
Rena Sherbill: Anything you would say about constellation energy in particular as it pertains to the deal. If we look at the Seeking Alpha quant and factor grades, we see it has a hold.
Chris Ciaccia: So for Constellation, I think one thing that investors have to remember is that it is a utility, but it's also an unregulated utility.
It's allowed to do deals with companies like Amazon and Microsoft that it did with you know a couple of years ago at larger rates than your traditional utilities.
I think that's one reason why investors may want to give Constellation a second look. You've seen the stock drop since the beginning of the year, but it's up on this news.
And for Amazon, Amazon is just growing tremendously, especially when it comes to AWS. And even though it's not being reflected in the stock right now, stock sold off a little bit after earnings, which were tremendous. you have to look at the long term.
And I think right now everybody is focused on rising yields from government bonds all around the world. the war in Iran, which is causing oil prices to rise.
When push comes to shove, you have to look at the long-term fundamentals of these companies, and both of them are tremendous.
Rena Sherbill: Tencent (TCEHY) is reportedly signing a $7 billion five-year AI chip lease with Oracle (ORCL), which diversifies Oracle's AI customer base. We can see the downward slide for Oracle and a bit of upward movement for TCEHY.
And as we look at the chart, we can also see that TenCent is a hold. It's had a bit of a slide. Chris, what would you offer contextually on this deal and these stocks?
Chris Ciaccia: This is a the start of Oracle slowly starting to get away from being incredibly reliant on OpenAI (OPENAI). You've seen that in the share price.
The numbers have been tremendous that Oracle is produced quarter after quarter, but it investors just aren't reacting, and neither is the share price. This is the start of slowly diversifying away from OpenAI and hopefully this helps the credit default swaps spread which you've seen rise significantly since the start of the year.
And I think that's being reflected negatively in the share price too. Oracle shares are down a little bit today.
I would expect them once investors were able to actually either confirm this deal, because right now it's just reported, or Oracle gets another deal with, you know, a client in Asia or somebody else other than OpenAI, you'll start to see that reflected in the share price.
And for Tencent, it gives them access to advanced AI chips that they can't get in China. Presumably these are either NVIDIA's (NVDA) chips or (AMD)'s chips that Oracle has access to.
And they can't get access to in mainland China for a number of geopolitical reasons. So this helps them from that perspective too.
Rena Sherbill: Can you say a little bit more about the credit default situation and how that affects things?
Chris Ciaccia: Sure. So Oracle's got a lot of debt on its books. and investors are wary for a number of different reasons, whether it's just the customer concentration with OpenAI or the fact that maybe they think that this AI build out is not real.
Oracle's put this massive amount of debt on its books. It hasn't really seen the explosive revenue growth that some of the other companies like Microsoft and Google (GOOG) (GOOGL) and Amazon and even Meta (META) have seen thanks to AI.
So you're seeing investors incredibly wary or cautious about Oracle's long term prospects. And then you've seen that re resulted in the credit default swaps, which is essentially just like a form of insurance on Oracle's debt.
Rena Sherbill: And last on our list of stocks to talk about and items to talk about is a stock that we've talked about on our Investing Experts Podcast for the past week.
We had Steve Cress come on and talk about his thoughts on earnings yesterday out of Micron (MU) and how the market may or may not react. Chris, what would you say about long time, strong buy Micron?
Chris Ciaccia: Micron is essentially the candy store and the AI industry is the kid. They're just they've got their money out and they want to buy everything in the store and Micron is just reaping the benefits. Numbers this quarter and for going forward are just outstanding. They blow past Wall Street's estimates by a wide margin. Next year, some estimates are thinking that the company could earn two hundred dollars over two hundred dollars a share.
Rena Sherbill (06:54.957)Mm-hmm.
Chris Ciaccia (07:15.236)And when you look at the share price today, about a f about a thousand dollars, that's roughly five times earnings. And now we all know that Micron in the past has been a cyclical company, but that cycl cyclicality has stopped with the AI trade. And even though the stock's down a little bit today, and there might be some profit taking because the stock's been up tremendously over the past 12 months and over the past since the year to date, the story is not ending. And it's just all cylinders go ahead for Micron.
Rena Sherbill (07:46.506)Any negativity that you would seed in investors' minds or any other sides of the coin or anything to note for investors looking at this part of the tech space and or this stock in particular?
Chris Ciaccia (08:02.36)the the there's always a neg there's always two sides to the coin in investing and the negative here for micron and the other companies in the memory and storage space is that the slowdown occurs. all of a sudden, you know, whether it's rising interest rates or a war in Iran or some other kind of event that causes a spending slowdown and that hits Micron.
Like I said before, Micron has historically been a cyclical company, and that's why it doesn't trade at 30, 20 times earnings or whatever the number for most tech companies are that are growing at these tremendous rates.
So that's the big concern is that the spending slowdown happens and then Micron just goes back to being what it was before, which is a boom and bust. Right now we're in the boom and the fear is that the bust happens sooner rather than later.
But it's just it's hard to see that happening given that they've signed all these long-term agreements with a number of different companies and they've given a number of measures of guidance going out for the rest of fiscal twenty twenty six and twenty twenty seven that are just surprising investors left and right.
So there is obviously concern that that can happen, but it just doesn't seem to be on the horizon right now.
I think the thing right now is you've gotta focus on rising yields and how that's impacting the AI industry. And it just doesn't seem to be impacting right now.
We've seen yields on government debt over the past few months rise a hundred basis points, and the slowdown is not occurring.
And that's not to say it may not happen, but it these numbers are just tremendous and these companies are giving forecasts going out to next year and they're factoring the rising yields and geopolitical concerns and all those types of things and nothing seems to be impacting it.
So it seems like it's full sail ahead for the tech industry and for AI in general.
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Admittedly, I am quite bullish on NextEra Energy (NEE -0.07%), and for dividend investors, it has long been a favorite. Yet today I'll make the case for Constellation Energy (CEG +1.80%) as potentially the better long-term buy. Here's why.
Constellation operates the most nuclear-energy-producing facilities in the U.S. Data centers require power nonstop, and Constellation can meet those needs with its carbon-free, around-the-clock nuclear capabilities. While NextEra is moving into nuclear as well, the process to get up and running takes time, and Constellation is already there.
Image source: The Motley Fool.
Constellation's financials are strong, and its second-quarter revenue reached $7.5 billion, a 23% increase from the year prior. Management also raised its full-year guidance for adjusted operating earnings to a range of $11.50 to $12.50 per share.
Constellation's footprint is also expanding. This September, the company agreed to purchase a gas plant in Rhode Island that will add 609 megawatts of capacity. The plant also comes complete with a 15-year purchase agreement with Toyota.
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Constellation's stock has stumbled despite the positive news, falling more than 25% in 2026 as of this writing. With shares trading around $260, Wall Street's consensus average price target of $347 implies significant growth potential ahead.
In my mind, NextEra is more of an income investment, and Constellation is more growth-oriented. While Constellation does have a dividend, the yield is less than 1%. NextEra is a solid choice for most portfolios, but I really see a strong upward trajectory ahead for Constellation.
The stock's decline this year creates an attractive entry point for long-term investors.
Catie Hogan has positions in NextEra Energy. The Motley Fool has positions in and recommends Constellation Energy and NextEra Energy. The Motley Fool has a disclosure policy.
Constellation Energy (CEG) secures a 20-year power agreement with Amazon (AMZN), supporting investment in Calvert Cliffs nuclear plant expansion. Tencent (TCEHY) reportedly signs a $7B, five-year AI chip lease with Oracle (ORCL), diversifying ORCL's AI customer base.
Constellation Energy runs the largest nuclear fleet in the country, guidance keeps climbing, and yet the stock sits near a 52-week low. One Wall Street analyst sees a very specific path back to all-time highs, but it hinges entirely on…
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Constellation Energy (NASDAQ:CEG | CEG Price Prediction) currently trades at $254.02. Wall Street’s average price target is $347.28, which puts the stock 36.7% below where analysts think it should be.
Constellation runs the largest nuclear fleet in the country. After closing the Calpine deal, it has 55 GW of capacity across nuclear, natural gas, geothermal and battery storage. Wall Street likes it because AI data centers need carbon-free power around the clock, and Constellation has more of that power to sell than anyone else. (We picked five ways to play the nuclear restart, utilities and fuel suppliers included, in a free report here.)
Management keeps raising guidance while the stock keeps falling.
Guidance Went Up and the Stock Went Down Grid rule uncertainty and a messy second quarter drove the decline. Shares have fallen 27.77% this year from $351.68. Adjusted EPS of $2.55 beat the $2.33 consensus, but revenue of $7.50B missed. Operating income fell 39.01% and planned refueling outage days rose to 86 from 41.
PJM hasn’t settled rules for connecting large loads and co-located data centers. Management expects a FERC order in the first to second quarter of 2027. In Texas, new batteries are reaching the grid before data-center demand, weakening ERCOT pricing. The stock has dropped 7.55% over the past month.
Scotiabank’s Street-High Target Points to Nearly 74% Upside Andrew Weisel at Scotiabank has the highest target at $441, meaning 73.6% upside. He points to Constellation’s lead in selling nuclear power to hyperscalers, the restart of Crane Clean Energy Center, and tighter PJM capacity markets.
Crane is scheduled to restart in 2027 with a $1B DOE loan guarantee and 20-year Microsoft PPA. Constellation has signed 920 megawatts of new nuclear contracts averaging 18 and a half years. PJM’s 2028/2029 capacity auction cleared at $325/MW-day. Management guides to base EPS growth of 20%+ through 2029. The CEO expects contracting to speed up once rules are settled: “Deal flow will kick off with a bit of a bang.”
Of 22 analysts, 19 rate the stock Buy or Strong Buy and 3 rate it Hold. BMO lowered its target but kept an Outperform rating, naming PJM and ERCOT as key issues. Estimate revisions for 2026 EPS ran 14 up versus 2 down over 30 days.
Revisions to 2027 estimates were split, with 7 up and 9 down. Management says new contracts won’t move 2029 earnings much and hasn’t disclosed pricing. This target depends on regulators acting on schedule.
Vistra (NYSE:VST) is down 13.85% this year at $138.36. Its average target of $217.58 meaning 57.3% upside. Analysts have 19 Buy or Strong Buy ratings and 1 Strong Sell.
Constellation’s consensus upside trails Vistra’s. The 74% case depends on a single bullish analyst.
Constellation Has Lagged a Rising S&P 500 All Year Constellation is down 27.77% this year, while the S&P 500 is up 11.81%. Over one year, the stock is down 22.37% and the index is up 14.46%. At $254.02, the stock is close to its 52-week low of $228.28. Its average target of $347.28 meaning 36.7% upside.
The stock trades at about 21x forward earnings. Management’s 2026 EPS guidance is $11.50 to $12.50.
Constellation’s Upside Depends on Regulators The outlook improves if PJM and FERC settle co-location rules by mid-2027, Crane restarts on time, and hyperscaler contracts speed up. With $2.8B left in buyback authorization, the company can support EPS while investors wait.
The bear case gains weight if the regulatory process drags, ERCOT stays oversupplied, or the Illinois ZEC program ending in May 2027 hurts more than expected. A stock at 21x forward earnings could keep losing ground.
The core business is improving and guidance is rising. The consensus target is more realistic than Scotiabank’s $441.
Contact [email protected] for any questions or corrections.
LUSBY, Md.--(BUSINESS WIRE)--Constellation (Nasdaq: CEG) and Amazon (Nasdaq: AMZN) today announced a long-term agreement that will support the continued investment in and expansion of the Calvert Cliffs Clean Energy Center, Maryland’s only nuclear plant and largest source of clean energy. The agreement will enable more than $3 billion in Maryland infrastructure investment, including state-of-the-art improvements across the entire 1,790-megawatt plant and approximately 190 megawatts in total of new, emissions-free generating capacity coming online between 2030 and 2032.
The expansion of Calvert Cliffs’ generating capacity will be supported by a 20-year agreement, which includes 690 megawatts of power, including the 190 megawatt uprate. The parties have also entered into a related retail supply agreement to support Amazon operations in the 13-state PJM market. In addition to making the uprate possible, Amazon’s long-term commitment will help provide Constellation with the revenue certainty to relicense the plant for another 20 years and make progress toward the development of new clean energy power plants at the site, adding to Maryland’s supply of clean and reliable energy.
The agreement will also help Amazon manage its energy costs for facilities throughout the region. All the electricity generated by Calvert Cliffs will continue flowing to the PJM regional grid just as it does now, demonstrating how large energy users can support investments in new, reliable generation while strengthening the broader electric system.
“This agreement demonstrates how private investment can strengthen critical energy infrastructure,” said Joe Dominguez, chairman, president and chief executive officer, Constellation. “Amazon’s commitment supports the long-term operation of Calvert Cliffs for generations to come and creates a strong foundation for future investment in both the facility and in advanced nuclear technologies.”
“Amazon is committed to investing in carbon-free energy to strengthen the grid and benefit the communities where we operate," said Kerry Person, vice president of AWS Global Operations and Data Center Delivery. "This long-term agreement with Constellation sustains the continued operation and expansion of Maryland's largest source of carbon-free energy, supports hundreds of jobs, and brings significant new generation to the regional grid.”
Located in Lusby on the western shore of the Chesapeake Bay, Calvert Cliffs produces approximately 80% of Maryland’s clean energy and enough electricity to power the equivalent of more than 1.3 million homes. The facility employs more than 800 people and contributes about $21 million annually in taxes supporting schools, roads and other public services.
About Constellation
Constellation Energy Corporation (Nasdaq: CEG), a Fortune 200 company headquartered in Baltimore, is the largest private-sector power producer in the world and the nation's largest producer of clean and reliable energy. With 55 gigawatts of capacity from nuclear, natural gas, oil, geothermal, hydro, wind and solar facilities, our fleet has the generating capacity to power the equivalent of 27 million homes, providing about 10% of the nation's clean energy and delivering the around-the-clock reliability needed to power America's growing economy. We are also the largest nuclear energy company in the U.S. and a leading competitive retail supplier, serving approximately 2.5 million customer accounts nationwide, including 80% of the Fortune 100. We are committed to investing in innovation and new technologies to drive the transition to a reliable, sustainable and secure energy future. Follow Constellation on LinkedIn and X.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Constellation Energy (CEG -4.55%), one of the largest independent power producers in the U.S., was spun off from Exelon (EXC +0.27%) in an IPO on Feb. 2, 2022. It opened at $50.04 per share, but it now trades at about $255. Let's see why Constellation became a multibagger stock -- and if buying it today will still set you up for life over the next few decades.
Image source: Getty Images.
Why did Constellation's stock soar? Constellation operates nuclear, natural gas, oil, geothermal, hydro, wind, and solar facilities with a total capacity of 55 GW. Its nuclear fleet, the largest in the United States, accounts for 22 GW of that total and fuels most of its profit growth.
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It already serves 80% of the Fortune 100, and it's benefiting from the rapid expansion of the power-hungry cloud and AI markets. Moreover, the Zero-Emission Nuclear Production Tax Credit (PTC), established under the Inflation Reduction Act of 2022, subsidizes its business if energy prices are too low -- but amplifies its gains when energy prices rise.
From 2025 to 2028, analysts expect Constellation's EPS to grow at a 31% CAGR as it scales its power purchasing agreements (PPAs) with the top hyperscalers and enterprise companies, increases the capacity of its existing plants, and integrates its recent acquisition of Calpine. It still looks reasonably valued at 20 times next year's earnings, and it could be a great stock to buy, hold, and forget if you expect the global demand for electricity to keep rising.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy. The Motley Fool has a disclosure policy.
The biggest profits in AI infrastructure hide in three chokepoints that most investors walk right past, and two of them are priced as if the boom is already over.
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The AI trade runs on a supply chain, and the tightest links in that chain tend to capture the most pricing power. Three of those chokepoints sit outside the GPU spotlight: custom silicon and networking, memory and the electricity that keeps data centers running.
Each of Broadcom (NASDAQ:AVGO | AVGO Price Prediction), Micron Technology (NASDAQ:MU) and Constellation Energy (NASDAQ:CEG) controls one of them. Two of the three trade as if the market still doubts how long that demand lasts. Below is the case for each, plus the one risk that could break it.
Number 1: Broadcom As of midday on Monday, Sept. 28, Broadcom shares were up just 0.43% year to date (YTD), while the business is compounding at a pace few megacaps have ever sustained. Fiscal third-quarter revenue reached $29.59 billion, up 85.5% year over year (YoY), and AI semiconductor revenue hit $16.7 billion, up 221%. The stock closed at $352.81, below the $371.27 it fetched on the day of that report.
The anchor is management’s multiyear AI roadmap. Broadcom guided fiscal 2026 AI revenue to $58 billion, fiscal 2027 to approximately $115 billion, and fiscal 2028 AI semiconductor revenue to $230 billion. Hock Tan added, “Our demand actually exceeds this outlook and we will work to improve supply.”
In plain terms, AI labs and hyperscalers want chips designed around their own models, and Broadcom makes them. Tan said Anthropic is “on track to become our largest XPU customer in 2027”, and fourth-quarter guidance calls for revenue of ~$34.8 billion (+93% YoY). If those shipments land on schedule, the gap between flat share performance and near-doubling revenue should narrow.
The risk: the forecast depends on customers finishing entire data centers. Tan called it “a multidimensional issue to get an AI data center deployed,” mentioning land, power, and shells. Anthropic and OpenAI also rely on third-party financing, with a first $35 billion tranche closed in June. If that capital tightens, the 2027 and 2028 targets slip. The next checkpoint is the fiscal fourth-quarter report on Dec. 9.
Number 2: Micron Technology Micron is the pick where Wall Street has partially caught on, with shares up more than 230% YTD. The argument is that estimates still trail reality. Fiscal third-quarter revenue of $41.46 billion beat the $35.25 billion consensus by 17.6% and non-GAAP EPS of $25.11 vs. $20.28 estimate marked seven straight beats. GAAP gross margin expanded to 84.6% vs 37.7% a year earlier.
The CapEx commitment tells you how durable management thinks this is. Fiscal 2026 capital spending is projected at approximately $27 billion, with fiscal fourth-quarter capex around $10 billion and fiscal 2027 quarterly spending expected above fiscal Q4 levels. That expansion is backed by 16 Strategic Customer Agreements structured as take-or-pay contracts, carrying RPO of approximately $100 billion.
Memory used to trade like a spot commodity. Multiyear contracts with price floors make the earnings stream more predictable, and management expects tight conditions to remain beyond calendar 2027. Fiscal fourth-quarter guidance calls for $50 billion ±$1.0 billion in revenue and non-GAAP EPS of $31.00 ± $1.
The risk: Memory cycles have historically been severe after peaks, and Micron is putting record capital near what could be one. The fourth-quarter margin outlook already reflects a meaningful moderation in the rate of price increases. That report is expected near the end of September, though the company has not confirmed a date.
Number 3: Constellation Energy Constellation is the contrarian leg. Shares are down 29.33% YTD, even after full-year 2026 adjusted operating EPS guidance was raised to $11.50 to $12.50 from $11 to $12. Second-quarter adjusted EPS of $2.55 vs. $2.33 estimate beat expectations.
The anchor is contracted demand from AI’s biggest spenders. Constellation holds long-term power agreements with Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:META), including a 20-year Microsoft PPA supporting the Crane restart, now aiming 2027. Last quarter it signed about 920 megawatts of new nuclear agreements averaging 18 and a half years.
Existing reactors are the fastest source of clean, around-the-clock power, and the Department of Energy projects data centers could reach up to 12 percent of U.S. electrical demand by 2028. PJM’s 2028/2029 capacity auction cleared at $325/MW-day, and about $2.8 billion remains under the buyback authorization to capitalize on the discount. All of that expansion still has to be powered and cooled by somebody, which is why we pulled together seven suppliers doing exactly that in a free AI infrastructure report.
The risk: Regulation. Management expects PJM co-location clarity only in the first to second quarter of 2027, the Illinois ZEC program ends May 2027, and long-term debt stands at $17.5 billion after Calpine. Revenue of $7.5 billion also missed the $7.7 billion estimate, a reminder that integration noise can cloud results.
Three Catalysts Worth Tracking Into Year-End Micron’s fiscal fourth-quarter report: A result near the $50.0 billion guide would confirm the contract-backed model. PJM decisions: Management expects a PJM response around November and Dominguez said deal flow could then “kick off with a bit of a bang.” Broadcom’s December update: Q4 AI revenue guided at $21.7 billion is the next proof point for the 2027 roadmap. If all three chokepoints stay tight, pricing power stays with the suppliers. Investors should position around that pattern before the market fully prices it.
Contact [email protected] for any questions or corrections.
Constellation Energy Corporation (CEG - Free Report) ended the recent trading session at $260.43, demonstrating a -1.08% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 0.77% for the day. Elsewhere, the Dow lost 0.67%, while the tech-heavy Nasdaq lost 0.92%.
Prior to today's trading, shares of the company had lost 4.87% lagged the Oils-Energy sector's gain of 1.13% and the S&P 500's gain of 0.96%.
The upcoming earnings release of Constellation Energy Corporation will be of great interest to investors. On that day, Constellation Energy Corporation is projected to report earnings of $3.99 per share, which would represent year-over-year growth of 31.25%. Simultaneously, our latest consensus estimate expects the revenue to be $8.65 billion, showing a 31.65% escalation compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $12.19 per share and a revenue of $33.68 billion, signifying shifts of +29.82% and +31.92%, respectively, from the last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Constellation Energy Corporation. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.38% higher within the past month. At present, Constellation Energy Corporation boasts a Zacks Rank of #3 (Hold).
With respect to valuation, Constellation Energy Corporation is currently being traded at a Forward P/E ratio of 21.61. Its industry sports an average Forward P/E of 17.61, so one might conclude that Constellation Energy Corporation is trading at a premium comparatively.
Also, we should mention that CEG has a PEG ratio of 1.45. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Alternative Energy - Other industry was having an average PEG ratio of 2.2.
The Alternative Energy - Other industry is part of the Oils-Energy sector. This industry, currently bearing a Zacks Industry Rank of 93, finds itself in the top 38% echelons of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
Constellation Energy Corporation (CEG - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this company have returned -4.9% over the past month versus the Zacks S&P 500 composite's +1% change. The Zacks Alternative Energy - Other industry, to which Constellation Energy Corporation belongs, has gained 5.2% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Constellation Energy Corporation is expected to post earnings of $3.99 per share for the current quarter, representing a year-over-year change of +31.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.8%.
The consensus earnings estimate of $12.19 for the current fiscal year indicates a year-over-year change of +29.8%. This estimate has changed +0.4% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $13.25 indicates a change of +8.8% from what Constellation Energy Corporation is expected to report a year ago. Over the past month, the estimate has changed +1%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Constellation Energy Corporation.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Constellation Energy Corporation, the consensus sales estimate for the current quarter of $8.65 billion indicates a year-over-year change of +31.7%. For the current and next fiscal years, $33.68 billion and $32.56 billion estimates indicate +31.9% and -3.3% changes, respectively.
Last Reported Results and Surprise HistoryConstellation Energy Corporation reported revenues of $7.5 billion in the last reported quarter, representing a year-over-year change of +23%. EPS of $2.55 for the same period compares with $1.91 a year ago.
Compared to the Zacks Consensus Estimate of $7.47 billion, the reported revenues represent a surprise of +0.48%. The EPS surprise was +8.05%.
Over the last four quarters, Constellation Energy Corporation surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Constellation Energy Corporation is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Constellation Energy Corporation. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Key Takeaways Constellation Energy's EFOF rose to 6.2% in Q2 2026 from 4.5% in Q1, signaling higher forced outages. CEG's 93% nuclear capacity factor and 96% renewable capture highlight performance across its fleet. Lower EFOF could boost CEG's fleet availability, supporting power sales, capacity revenues and cash flow. Constellation Energy (CEG - Free Report) benefits from its expanded generation fleet, strengthening its ability to meet rising demand for reliable electricity. Following its January 2026 acquisition of Calpine, CEG uses the Equivalent Forced Outage Factor (EFOF) to measure forced outages and reduced operating capacity across its natural gas, oil and pumped-storage hydro fleet.
CEG’s EFOF increased to 6.2% in the second quarter of 2026 from 4.5% in the first quarter. The higher EFOF indicates greater forced unavailability or reduced operating capacity across the applicable fleet. The metric covers multiple generation technologies, so the 6.2% figure should be viewed as a combined fleet measure rather than compared directly with benchmarks for a single plant technology.
Reducing EFOF could improve fleet availability and enable the company to capture more opportunities from its expanded generation portfolio. This is particularly relevant as CEG integrates the larger generation portfolio acquired through Calpine. Improving reliability and reducing forced outages could help the company maintain greater availability across its gas, oil and pumped-storage hydro assets.
CEG reported a 93% nuclear capacity factor in the second quarter of 2026, excluding Salem and South Texas Project, along with a 96% renewable energy capture rate, highlighting performance across its nuclear and renewable generation fleets.
Thus, lower EFOF, alongside strong nuclear and renewable performance, could improve fleet availability, supporting power sales, capacity revenues, operating efficiency and cash flow.
Fleet Performance Monitoring Aids Utility GrowthFleet performance monitoring helps utilities track asset health, identify emerging failures, optimize maintenance and improve reliability. Data-driven insights can reduce downtime and operating costs while supporting efficient asset utilization, stronger performance and sustainable utility growth.
Clearway Energy, Inc. (CWEN - Free Report) tracks fleet performance through plant availability, with solar at 99%, flexible generation at 97% and wind at 92%, alongside compensable generation and performance indices.
Vistra Corporation (VST - Free Report) reported 95.7% total commercial availability and 50.2 terawatt-hours of generation, reflecting strong operational availability and effective utilization across its power-generation fleet.
The Zacks Rundown on CEGCEG’s Earnings EstimatesThe Zacks Consensus Estimate for 2026 and 2027 EPS indicates an increase of 29.82% and 8.76%, respectively, year over year.
Image Source: Zacks Investment Research
CEG’s Returns on Equity (ROE)Constellation Energy's trailing-12-month ROE is 14.89%, ahead of the industry average of 7.15%.
Image Source: Zacks Investment Research
CEG’s Stock Price PerformanceIn the past three months, the company’s shares have plunged 2.7% compared with the industry’s 8.8% fall.
