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Can CEG's Nuclear Power Keep Up With AI-Driven Data Center Demand?
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Key Takeaways
CEG is leveraging nuclear power to meet growing energy demand from AI-driven data centers.
Long-term deals with Meta and Microsoft back CEG's push to supply clean power to data centers.
CEG stock jumped 43.2% in 3 months, outpacing the industry's 22.4% gain amid rising nuclear demand.
Constellation Energy Corporation (CEG - Free Report) is all set to take advantage of the growing demand from data centers. According to Arizton Advisory & Intelligence report, the U.S. data center market is experiencing significant growth, with the market size expected to reach $308.83 billion by 2030.
CEG’s robust nuclear infrastructure enables it to fulfill the increasing demand from power-intensive businesses, such as data centers. CEG focuses on powering data centers "behind the meter" by co-locating and connecting them directly to existing nuclear energy generation facilities to avoid the need to transport power long distances over high-power transmission lines. This ensures data centers have direct access to a reliable supply of energy.
Constellation Energy emphasizes nuclear power's reliability and carbon-free status as a major enabler for powering AI data centers. After initially focusing on powering the massive server warehouses directly from its power plants, the company is now turning its attention to possible data center projects that connect to the U.S. electrical grid.
Recently, Meta signed a 20-year power purchase agreement with CEG to supply nuclear power to its growing AI data centers in Illinois. Beginning in 2027, this agreement will ensure a steady supply of clean energy. This will help Meta grow its AI operations and cut carbon emissions. In late 2024, Microsoft entered into a 20-year agreement with CEG to revive the Three Mile Island nuclear plant in Pennsylvania. The $1.6-billion investment aims to restart the reactor, which has been dormant since 2019, to provide carbon-free electricity for Microsoft’s expanding data centers.
Essentially, Constellation Energy is adopting sustainable energy solutions, negotiating the changing regulatory environment, and strategically positioning itself to fulfill the increasing energy demands of data centers, especially those in the AI industry.
Utilities' Potential to Gain From Date Center Demand
Some other nuclear-focused companies that are also poised to benefit from the expanding demand from data centers have been discussed below.
Xcel Energy’s (XEL - Free Report) existing nuclear plants are contributing to meeting the growing demand for power, especially from data centers. Xcel Energy’s nuclear plants, Monticello and Prairie Island in Minnesota, play a pivotal role in meeting the surging electricity demand from data centers. These plants collectively provide about 30% of the electricity for Xcel Energy's customers in the Upper Midwest. Along with developers, XEL is proposing nearly 8,900 megawatts of new data center capacity.
Vistra Corp. (VST - Free Report) is experiencing growth, particularly in its energy division, due to increased demand from data centers, especially in the AI sector. Vistra is investing $2.5 billion in data center energy projects by 2027 to expand its market share. Vistra is strategically leveraging its nuclear assets to meet the surging electricity demand of AI-powered data centers.
CEG Stock’s Price Performance
In the past three months, CEG’s shares have risen 43.2% compared with the industry’s 22.4% growth.
Image Source: Zacks Investment Research
The Zacks Rundown for CEG
CEG is trading at a premium relative to the industry, with a forward 12-month price-to-earnings ratio of 28.96X compared with the industry average of 21.66X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Constellation Energy’s 2025 and 2026 earnings per share indicates an increase of 8.77% and 22.39%, respectively.
Image: Bigstock
Can CEG's Nuclear Power Keep Up With AI-Driven Data Center Demand?
Key Takeaways
Constellation Energy Corporation (CEG - Free Report) is all set to take advantage of the growing demand from data centers. According to Arizton Advisory & Intelligence report, the U.S. data center market is experiencing significant growth, with the market size expected to reach $308.83 billion by 2030.
CEG’s robust nuclear infrastructure enables it to fulfill the increasing demand from power-intensive businesses, such as data centers. CEG focuses on powering data centers "behind the meter" by co-locating and connecting them directly to existing nuclear energy generation facilities to avoid the need to transport power long distances over high-power transmission lines. This ensures data centers have direct access to a reliable supply of energy.
Constellation Energy emphasizes nuclear power's reliability and carbon-free status as a major enabler for powering AI data centers. After initially focusing on powering the massive server warehouses directly from its power plants, the company is now turning its attention to possible data center projects that connect to the U.S. electrical grid.
Recently, Meta signed a 20-year power purchase agreement with CEG to supply nuclear power to its growing AI data centers in Illinois. Beginning in 2027, this agreement will ensure a steady supply of clean energy. This will help Meta grow its AI operations and cut carbon emissions. In late 2024, Microsoft entered into a 20-year agreement with CEG to revive the Three Mile Island nuclear plant in Pennsylvania. The $1.6-billion investment aims to restart the reactor, which has been dormant since 2019, to provide carbon-free electricity for Microsoft’s expanding data centers.
Essentially, Constellation Energy is adopting sustainable energy solutions, negotiating the changing regulatory environment, and strategically positioning itself to fulfill the increasing energy demands of data centers, especially those in the AI industry.
Utilities' Potential to Gain From Date Center Demand
Some other nuclear-focused companies that are also poised to benefit from the expanding demand from data centers have been discussed below.
Xcel Energy’s (XEL - Free Report) existing nuclear plants are contributing to meeting the growing demand for power, especially from data centers. Xcel Energy’s nuclear plants, Monticello and Prairie Island in Minnesota, play a pivotal role in meeting the surging electricity demand from data centers. These plants collectively provide about 30% of the electricity for Xcel Energy's customers in the Upper Midwest. Along with developers, XEL is proposing nearly 8,900 megawatts of new data center capacity.
Vistra Corp. (VST - Free Report) is experiencing growth, particularly in its energy division, due to increased demand from data centers, especially in the AI sector. Vistra is investing $2.5 billion in data center energy projects by 2027 to expand its market share. Vistra is strategically leveraging its nuclear assets to meet the surging electricity demand of AI-powered data centers.
CEG Stock’s Price Performance
In the past three months, CEG’s shares have risen 43.2% compared with the industry’s 22.4% growth.
Image Source: Zacks Investment Research
The Zacks Rundown for CEG
CEG is trading at a premium relative to the industry, with a forward 12-month price-to-earnings ratio of 28.96X compared with the industry average of 21.66X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Constellation Energy’s 2025 and 2026 earnings per share indicates an increase of 8.77% and 22.39%, respectively.
Image Source: Zacks Investment Research
CEG currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.