Should You Buy Constellation Energy While It's Below $360?

Core Viewpoint - The rapid growth of artificial intelligence (AI) is creating significant energy demands, presenting investment opportunities in utility companies like Constellation Energy, which is well-positioned to meet this demand through its clean energy portfolio [1][2]. Company Overview - Constellation Energy is the largest nuclear power company in the U.S., operating 14 nuclear generating stations with a capacity of approximately 22 gigawatts (GW) [4]. - The company has achieved a nuclear capacity factor of 94.6% over the past three years, outperforming the industry average by about 4 percentage points since 2013, which enhances its revenue potential [5]. Market Position and Recent Performance - Constellation's stock has recently declined by 19% from its peak of $412, currently trading below $360, raising questions about its investment potential [3]. - The company has a market capitalization of $106 billion, with a current stock price of $338.17 and a gross margin of 19.3% [6]. Strategic Developments - Constellation has expanded its presence in California through a $27 billion acquisition of Calpine, which includes natural gas and geothermal assets, enhancing its coast-to-coast operations [8]. - The company signed a 20-year power purchase agreement with Meta Platforms for the entire output of the Clinton Clean Energy Center, which has a capacity of 1,121 megawatts of nuclear power [9]. Future Prospects - Analysts project that Constellation's adjusted earnings per share (EPS) will nearly double from 2024 to 2028, indicating an 18% compound annual growth rate [12]. - The tightening energy markets, as evidenced by the PJM 2026-2027 capacity auction, suggest a favorable outlook for Constellation's earnings, as demand for energy continues to rise [11].