stellation Energy (US:CEG) ZACKSยท2025-06-13 13:30Core Insights - Constellation Energy Corporation (CEG) is positioned to capitalize on the increasing demand from data centers, with the U.S. data center market projected to reach $308.83 billion by 2030 [1] Company Strategy - CEG's nuclear infrastructure allows it to meet the rising energy needs of power-intensive businesses like data centers by connecting them directly to nuclear energy generation facilities, minimizing the need for long-distance power transmission [2] - The company emphasizes the reliability and carbon-free nature of nuclear power as essential for powering AI data centers, shifting focus from direct power plant supply to potential projects linked to the U.S. electrical grid [3] Key Agreements - Meta has signed a 20-year power purchase agreement with CEG to supply nuclear power for its AI data centers in Illinois, starting in 2027, ensuring a consistent supply of clean energy [4] - Microsoft has also entered a 20-year agreement with CEG to revive the Three Mile Island nuclear plant, with a $1.6 billion investment aimed at providing carbon-free electricity for its expanding data centers [4] Industry Context - Other nuclear-focused companies, such as Xcel Energy and Vistra Corp., are also benefiting from the growing demand for data centers, with Xcel's plants providing about 30% of electricity for its Upper Midwest customers and Vistra investing $2.5 billion in data center energy projects by 2027 [7][8] Stock Performance - CEG's stock has increased by 43.2% over the past three months, outperforming the industry average growth of 22.4% [9][10] - The company is trading at a premium with a forward 12-month price-to-earnings ratio of 28.96X compared to the industry average of 21.66X [12] Earnings Outlook - The Zacks Consensus Estimate indicates an earnings per share increase of 8.77% for 2025 and 22.39% for 2026 for Constellation Energy [14]