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Will Constellation Benefit From America's Rising Electricity Needs?
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Key Takeaways
Constellation plans nearly 10 GW of new capacity to meet rising U.S. electricity demand.
Long-term deals with Microsoft and Meta support AI-driven power demand and earnings growth.
Its 55-GW diversified fleet and 2026 EPS outlook of $11-$12 support long-term growth.
Constellation Energy (CEG - Free Report) benefits from America's rapidly rising electricity demand, driven by artificial intelligence, data centers, electrification and the return of manufacturing to the United States. The company believes demand for computing power continues to accelerate, with hyperscale capital spending for 2026 projected to be nearly 75% higher than last year.
Recently, Constellation Energy announced plans to add nearly 10 gigawatts (GW) of new power capacity, restart the 835-MW Crane Clean Energy Center to serve Microsoft's AI-driven electricity demand, and expand its natural gas and battery storage business. Meta entered into a 20-year power purchase agreement with Constellation Energy to procure 1.1 GW of electricity from the Clinton Clean Energy Center in Illinois. These investments should help the company meet rising U.S. electricity demand while supporting long-term earnings and shareholder growth.
CEG's diversified generation portfolio strengthens its ability to meet rising electricity demand. Following the Calpine acquisition, the company owns about 55 GW of capacity across nuclear, natural gas, geothermal, hydro, wind and solar assets. The company added the 105-MW Pastoria Solar Project and the 460-MW Pin Oak Creek Energy Center and advanced its Freestone data center project. These investments enhance grid reliability and support long-term customer and earnings growth.
Constellation Energy's strong earnings outlook includes 2026 adjusted earnings per share (EPS) of $11-$12 and more than 20% annual base EPS growth through 2029. The company expects further growth from long-term data center contracts, higher natural gas plant utilization and nuclear production tax credits, which should boost long-term performance.
Growing U.S. Power Demand Fuels Utility Growth
U.S. electricity demand is increasing, fueled by data centers, vehicle electrification, manufacturing growth and expanding economic activity. Growing electricity demand drives utilities to expand generation, transmission and grid infrastructure, supporting long-term rate base and earnings growth.
NextEra Energy (NEE - Free Report) is expanding generation, energy storage and transmission infrastructure to meet rising U.S. electricity demand. The company is also developing gas-fired plants and partnering with Google to support AI-driven data center growth.
Vistra Corp. (VST - Free Report) benefits from rising electricity demand through its diversified nuclear and natural gas fleet. Long-term power agreements with Amazon Web Services and Meta support AI-driven data center growth while providing stable revenues.
CEG’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 EPS indicates an increase of 25.03% and 16.02%, respectively, year over year.
Image Source: Zacks Investment Research
CEG’s Returns on Equity (ROE)
Constellation Energy's trailing-12-month ROE is 16.81%, ahead of the industry average of 7.15%.
Image Source: Zacks Investment Research
CEG’s Stock Price Performance
In the past three months, the company’s shares have plunged 14.5% compared with the industry’s 6.4% fall.
View the Zacks #1 Rank List
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Will Constellation Benefit From America's Rising Electricity Needs?
Key Takeaways
Constellation Energy (CEG - Free Report) benefits from America's rapidly rising electricity demand, driven by artificial intelligence, data centers, electrification and the return of manufacturing to the United States. The company believes demand for computing power continues to accelerate, with hyperscale capital spending for 2026 projected to be nearly 75% higher than last year.
Recently, Constellation Energy announced plans to add nearly 10 gigawatts (GW) of new power capacity, restart the 835-MW Crane Clean Energy Center to serve Microsoft's AI-driven electricity demand, and expand its natural gas and battery storage business. Meta entered into a 20-year power purchase agreement with Constellation Energy to procure 1.1 GW of electricity from the Clinton Clean Energy Center in Illinois. These investments should help the company meet rising U.S. electricity demand while supporting long-term earnings and shareholder growth.
CEG's diversified generation portfolio strengthens its ability to meet rising electricity demand. Following the Calpine acquisition, the company owns about 55 GW of capacity across nuclear, natural gas, geothermal, hydro, wind and solar assets. The company added the 105-MW Pastoria Solar Project and the 460-MW Pin Oak Creek Energy Center and advanced its Freestone data center project. These investments enhance grid reliability and support long-term customer and earnings growth.
Constellation Energy's strong earnings outlook includes 2026 adjusted earnings per share (EPS) of $11-$12 and more than 20% annual base EPS growth through 2029. The company expects further growth from long-term data center contracts, higher natural gas plant utilization and nuclear production tax credits, which should boost long-term performance.
Growing U.S. Power Demand Fuels Utility Growth
U.S. electricity demand is increasing, fueled by data centers, vehicle electrification, manufacturing growth and expanding economic activity. Growing electricity demand drives utilities to expand generation, transmission and grid infrastructure, supporting long-term rate base and earnings growth.
NextEra Energy (NEE - Free Report) is expanding generation, energy storage and transmission infrastructure to meet rising U.S. electricity demand. The company is also developing gas-fired plants and partnering with Google to support AI-driven data center growth.
Vistra Corp. (VST - Free Report) benefits from rising electricity demand through its diversified nuclear and natural gas fleet. Long-term power agreements with Amazon Web Services and Meta support AI-driven data center growth while providing stable revenues.
CEG’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 EPS indicates an increase of 25.03% and 16.02%, respectively, year over year.
Image Source: Zacks Investment Research
CEG’s Returns on Equity (ROE)
Constellation Energy's trailing-12-month ROE is 16.81%, ahead of the industry average of 7.15%.
Image Source: Zacks Investment Research
CEG’s Stock Price Performance
In the past three months, the company’s shares have plunged 14.5% compared with the industry’s 6.4% fall.
Image Source: Zacks Investment Research
CEG’s Zacks Rank
CEG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.