AI power shortages drive up nuclear stocks: This largest nuclear power operator in the U.S. is worth following.

Core Highlights

The power hunger of AI training and inference is becoming increasingly apparent. According to Goldman Sachs research, global data center electricity consumption is expected to grow by 50% by 2027 and may increase by 2.65 times by the end of 2030. This directly boosts the value of clean energy suppliers.

The largest nuclear power operator in the United States, Constellation Energy (CEG), has therefore become the focus - it controls 14 nuclear power plants with an installed capacity of 22 GW and operates with industry-leading efficiency (a nuclear capacity factor of 94.6% over the past 3 years, which is 4 percentage points higher than the industry average).

Long-term Contract Locking Growth

The most eye-catching aspect is the supply chain lock-in. Constellation has signed a 20-year Power Purchase Agreement (PPA) with Meta to supply the entire 1,121 megawatts output from the Clinton nuclear power plant. Microsoft CEO has also publicly stated that power shortages are a bottleneck for data center expansion.

The company's CEO recently stated that they are “close to reaching” a new agreement with several large-scale technology companies, expecting to announce it before the Q4 financial report.

Signals of Supply Shortage

The results of the PJM electricity market capacity auction for 2026-2027 say it all—Constellation's nuclear power portfolio won all bids, and the transaction price reached the regional cap. This indicates that supply is extremely tight and demand is growing rapidly.

Analysts expect the company's adjusted EPS to double by 2028 compared to 2024, with a compound annual growth rate of 18%.

The valuation is a bit high

The stock price has fallen 19% from a high of $412 to below $360. The current valuation is 29.9 times the expected EPS for next year, which is indeed not cheap for a utility company (previous peak was 35.7 times). However, considering that Constellation has also completed the $27 billion acquisition of Calpine (adding natural gas and geothermal assets, expanding coverage on the West Coast), the cross-regional energy portfolio has become a true nationwide layout.

Core Logic: Scarce electricity + long-term contracts + operational excellence indeed has room for imagination in the era of AI power competition.