Constellation Energy aims to bring mothballed plant back to life to power Microsoft AI agreement. ...

Core Insights - The Trump administration is providing Constellation Energy with a $1 billion loan to restart the Crane Clean Energy Center nuclear plant in Pennsylvania, previously known as Three Mile Island Unit 1, which is expected to generate power again in 2027 [1][2] - The project has an estimated total cost of $1.6 billion, with the loan covering the majority of this amount [3] - The restart of the plant is part of a power purchase agreement with Microsoft to support its data center demand in the region [1] Company Overview - Constellation Energy is the largest operator of nuclear plants in the U.S. and has previously hinted at the possibility of federal financial support for the project [4] - The first advance of the loan is expected in the first quarter of 2026, with a guarantee from Constellation to protect taxpayer money [3] Industry Context - The Crane Clean Energy Center's restart is significant as it aims to lower electricity costs for consumers on the grid operated by PJM Interconnection, which serves over 65 million people across 13 states [5] - The administration emphasizes the importance of supporting affordable, reliable, and secure energy in the U.S., with the loan expected to lower the cost of capital and make power cheaper for PJM ratepayers [6]

Core Insights - Kering's growth strategy necessitates a reduction in dependence on the underperforming flagship brand Gucci [1] - The company plans to further scale back its store network to enhance operational efficiency [1] - Kering aims to pursue more synergies across its brands to drive overall performance [1]

Core Insights - 2025 has seen significant investment themes including artificial intelligence, quantum computing, and notably, nuclear energy stocks, with the VanEck Uranium and Nuclear ETF delivering a total return of 55% as of November 17 [2] Company Performance - NuScale Power experienced a tumultuous year, with shares rising nearly 200% through mid-October but subsequently collapsing by around 61% from their peak due to disappointing Q3 earnings [3][6] - The company reported a substantial loss of $1.85 per share against analyst expectations of a loss of only 11 cents, primarily due to a $128.5 million payment to ENTRA1 Energy aimed at expediting a six-gigawatt nuclear energy deployment [4][5] - Following the earnings report, NuScale's shares dropped 14% on November 6 and continued to decline, resulting in a total decrease of 45% since the report, with Royal Bank of Canada lowering its price target from $35 to $32 [5] Market Reactions - Constellation Energy, the largest operator of nuclear energy facilities in the U.S., reported Q3 earnings on November 7, missing both sales and adjusted EPS expectations, yet the stock gained 2% on the same day [7] - Despite a 16% decline from mid-October highs, Constellation has still achieved a total return of 52% year-to-date [7]

Core Insights - The rapid growth in demand for artificial intelligence (AI) is significantly impacting the energy requirements of data centers, which are known for their high power consumption [1] Group 1 - The increasing demand for AI is a primary driver of energy consumption in data centers [1] - Energy supply is identified as a potential limiting factor for the rapid expansion of AI capabilities [1]

Market Overview - The US equity market experienced a rally in the third quarter of 2025, with the S&P 500 Index increasing by 8.12% [1] - Bonds also saw gains, with the Bloomberg U.S. Aggregate Bond Index rising by 2.03% during the same period [1] Performance Analysis - The composite return for the quarter was 7.22% gross of fees and 7.10% net of fees, which underperformed the S&P 500 Index's 8.12% gain [1] - The underperformance of the strategy was attributed to security selection [1] Company Spotlight: Constellation Energy Corporation - Constellation Energy Corporation (NASDAQ:CEG) is highlighted as a key stock, being the largest producer of carbon-free energy in the United States [3] - The company operates the largest nuclear fleet in the nation and has a diversified energy portfolio including natural gas, geothermal, wind, solar, and hydro assets [3] - Constellation Energy's stock had a one-month return of -8.61% but gained 46.84% over the last 52 weeks, closing at $338.52 per share with a market capitalization of $105.76 billion on November 14, 2025 [2] - The pending acquisition of Calpine is expected to significantly enhance Constellation's generation portfolio, combining nuclear power with additional gas capacity [3] - The company serves over 2.5 million customers and plays a crucial role in the U.S. energy transition, focusing on reliable, affordable, and sustainable power [3]

Core Insights - Constellation Energy Corporation (CEG) reported Q3 2025 earnings of $3.04 per share, missing the Zacks Consensus Estimate of $3.13 by 2.89% while revenues reached $6.57 billion, exceeding expectations by 7.3% [1][9] Financial Performance - Revenues of $6.57 billion increased by 0.3% from $6.55 billion in the same quarter last year [7] - CEG's net interest expenses decreased by 8.8% to $134 million from $147 million year-over-year [10] - The trailing 12-month return on equity for CEG is 21.59%, outperforming the industry average of 7.99% [23] Stock Performance - CEG stock closed at $335.74 on Nov. 13, reflecting a 5.16% decline in intraday trading following the mixed earnings report [2] - Over the past six months, CEG shares have gained 49.2%, outperforming the industry’s 38.9% rise and the S&P 500's 16.7% growth [2] Operational Highlights - Renewable energy capture for CEG's wind, solar, and hydro fleet was 96.8%, up from 96% in Q3 2024 [7] - The company produced 46,477 gigawatt-hours (GWhs) from its Salem and South Texas Project Generating Stations, an increase from 45,510 GWhs in Q3 2024 [8] Strategic Initiatives - CEG plans capital expenditures of approximately $3 billion for 2025 and $3.5 billion for 2026, with about 35% allocated for nuclear fuel purchases [16] - The company aims to achieve 95% carbon-free output by 2030 and 100% by 2040, with nearly 90% of its yearly power generation already carbon-free [18] Investment Outlook - The Zacks Consensus Estimate for CEG's 2025 and 2026 earnings per share reflects year-over-year growth of 8.77% and 21.09%, respectively [20] - CEG's board has authorized a share repurchase program of up to $3 billion, with approximately $593 million remaining as of Sept. 30, 2025 [25] - The company aims to increase its dividend by 10% annually, currently offering a quarterly dividend of 38.78 cents per share [26] Valuation - CEG is currently trading at a forward P/E ratio of 31.79X, which is a premium compared to the industry average of 23.94X [27]

Core Insights - The demand for electricity driven by artificial intelligence (AI) is significantly outpacing the current grid's capacity, with projections indicating a need for 60 to 120 gigawatts of new load by 2030, equivalent to Italy's entire power consumption [1][2] Group 1: Companies Leading the Trend - Constellation Energy operates the largest nuclear fleet in the U.S. with 21 reactors producing about 22,000 megawatts of carbon-free power, and has secured multi-year power purchase agreements with major tech companies like Microsoft and Meta [4][6] - Vistra combines 41 gigawatts of nuclear, gas, and utility-scale batteries, enabling it to serve both peak and firm demand, with a third-quarter adjusted EBITDA of $1.58 billion and a narrowed full-year guidance of $5.7 billion to $5.9 billion [7][9] - Quanta Services focuses on building high-voltage transmission and substations, reporting third-quarter revenue of $7.6 billion and a record backlog of $39.2 billion, indicating strong demand for grid upgrades [10][12] Group 2: Market Dynamics - The scarcity of reliable power sources is leading to premium pricing for nuclear baseload and flexible generation, as companies race to secure firm power to support AI infrastructure [13]

Core Insights - The recent pullback in artificial intelligence stocks and nuclear-heavy AI energy trade presents a buying opportunity for investors, particularly in stocks like GE Vernova and Constellation Energy, which are currently trading about 20% below their highs [1][7]. Industry Overview - The demand for energy is surging due to the AI arms race, with projections indicating a 25% increase in U.S. electricity demand by 2030 and a 75% increase by 2050 [2]. - AI data centers require reliable and clean energy, making nuclear energy a key player in meeting this demand [3][4]. Company Insights: GE Vernova - GE Vernova Inc. has seen a 300% increase in stock price since its spin-off from GE in April 2024, outperforming Nvidia and the tech sector [5]. - The company is positioned to hold its ground at pre-July breakout levels, with potential long-term buying opportunities if it pulls back to its 200-day moving average [6]. - GE Vernova's portfolio includes nuclear energy, natural gas, electrification, and grid technologies, contributing to approximately 25% of global electricity generation [8]. - The company is recognized for its energy technology manufacturing capabilities, paying dividends, and stock repurchases, distinguishing it from speculative stocks [9]. - GE Vernova's BWRX-300 small modular reactors (SMRs) are viewed as potential leaders in the future of nuclear power [10]. - The company projects a 34% increase in adjusted EPS for FY25 and a 71% increase for FY26, with revenue expected to reach nearly $42 billion by FY26 [14]. Company Insights: Constellation Energy - Constellation Energy is the largest U.S. nuclear power plant operator and has seen its stock rise over 525% since going public in early 2022 [15]. - The stock has recently dropped 19% from its mid-October high, presenting a potential buying opportunity if it approaches its 200-day moving average [16]. - Constellation's $27 billion acquisition of Calpine will enhance its position as the largest clean energy firm, expanding its reach into energy-demanding regions like Texas and California [17]. - The company has secured long-term nuclear power agreements with major tech firms like Microsoft and Meta to support their AI initiatives [18]. - Constellation has raised its dividend by 10% for 2025 and 25% for 2024, with expectations of adjusted EPS growth of 9% in 2025 and 21% in 2026 [20].

Core Insights - The company is experiencing strong fundamental growth factors, indicating a positive outlook for its performance [1] - The shares of the company are considered undervalued, suggesting potential for price appreciation [1] Company Analysis - The analyst has a background in equity analysis, with experience across various sectors including telecom and industry, which enhances the understanding of the company's financial statements [1] - The analyst's educational background includes a bachelor's degree in Antwerp, a master's at KU Leuven, and an MBA in Finance at Vlerick, providing a solid theoretical and practical foundation for investment analysis [1] Investment Focus - The analyst is currently building an investment project focused on the CIS region, aiming to apply Western analytical tools to identify hidden value in emerging markets [1] - There is an emphasis on deep, fundamentals-driven research to uncover the underlying stories behind companies [1]