Industry Overview - The Zacks Alternative Energy - Other industry is divided into two main groups: one focuses on the generation and distribution of alternative energy, while the other is involved in the development and installation of renewable projects [2] - Global investment in the energy transition reached a record $2.3 trillion in 2025, marking an 8% increase from the previous year, indicating strong growth opportunities for industry participants [2] Trends in Alternative Energy - Wind energy is rapidly growing due to government support, public concern about climate change, and decreasing costs, with projections indicating the global wind industry will reach its second terawatt of capacity by 2030 [3] - The global wind industry is expected to add approximately 9.1 GW of capacity annually over the next five years, totaling 46 GW by 2029, with cumulative capacity projected to reach 196.5 GW [3] - The electric vehicle (EV) market is also surging, with nearly 2.1 million EVs sold worldwide in December 2025, contributing to a total of 20.7 million units for the year [4] - The global EV market size is projected to reach $6,523.97 billion by 2030, growing at a CAGR of 32.5% from 2025 to 2030, benefiting clean energy companies [4] Cost Challenges - Rising costs due to higher steel prices and U.S. import tariffs are creating financial pressure for wind project developers, despite strong demand [5][6] - The expiration of key U.S. tax credits is expected to increase project costs significantly, making renewable energy development more expensive [7] Industry Performance - The Zacks Alternative Energy industry has outperformed the Zacks Oil-Energy sector and the S&P 500 composite over the past year, with a collective stock surge of 33.1% compared to 18.3% and 17.4% respectively [12] - The industry currently carries a Zacks Industry Rank of 190, placing it in the bottom 22% of over 243 Zacks industries, indicating a negative earnings outlook [8][10] Company Highlights - **Montauk Renewables (MNTK)**: Specializes in biogas management and conversion, producing nearly 1.4 million MMBtu of RNG in Q3 2025, with a projected sales improvement of 3.5% year over year for 2026 [18][19] - **GE Vernova (GEV)**: Focuses on wind and electrification, securing 1.1 GW of U.S. onshore wind repowering orders in 2025, with a projected sales improvement of 17.5% year over year for 2026 [22][23] - **Constellation Energy (CEG)**: Aims to eliminate 100% of greenhouse gas emissions, with a projected sales improvement of 12.2% year over year for 2026 [26][27]

Core Insights - Constellation's subsidiary Calpine LLC has signed a 380-MW agreement with CyrusOne to support a new data center in Texas, ensuring power access and grid reliability [1][3] - The Freestone Energy Center, part of a larger 1,036-MW natural gas-fired power station project, will enhance energy capacity for data centers, addressing concerns about regional power demand [3] - Constellation's acquisition of Calpine for $26.6 billion earlier this year positions the company to meet the growing energy demands of the data economy while maintaining grid reliability [3] Company Developments - The agreement with CyrusOne is designed to provide necessary infrastructure for the new facility, ensuring continued electricity flow to the regional grid [1] - Calpine has also entered an exclusive agreement for Phase 2 of the Freestone project, adding another 380 MW of capacity [3] - Constellation emphasizes its commitment to supporting the data economy and local communities through reliable energy solutions [3] Industry Context - The rise of data centers, particularly those focused on artificial intelligence, has increased discussions around their impact on regional power demand [1] - Natural gas is becoming a primary energy source for data centers, with several projects anticipated to launch by 2026 [1] - The partnership between Constellation and CyrusOne aims to deliver scalable infrastructure while ensuring grid reliability for local communities [3]

Core Viewpoint - Constellation Energy has signed a new agreement to provide 380 megawatts of power to a data center operated by CyrusOne in Texas, indicating a strategic move to support the growing demand for data center energy needs [1] Company Summary - Constellation Energy is a major U.S. power company that is expanding its service capabilities by partnering with CyrusOne to connect and serve a new data center [1] - The new data center will be located adjacent to the Freestone Energy Center in Texas, highlighting the company's focus on infrastructure development in energy-intensive sectors [1] Industry Summary - The agreement reflects the increasing energy demands of the data center industry, which is rapidly growing due to the rise in digital services and cloud computing [1] - The partnership between a power company and a data center operator underscores the importance of reliable energy supply in supporting technological advancements and infrastructure [1]

Group 1 - Constellation Energy Corp. is recognized as one of the 12 Best Nuclear Energy Stocks to Buy Now, with analysts maintaining positive ratings despite slight adjustments in price targets [1][2][8] - Wells Fargo analyst Shahriar Pourreza lowered the price target for Constellation Energy to $460 from $478 while keeping an Overweight rating, emphasizing the company's strong pipeline of asset opportunities [1][8] - TD Cowen initiated coverage with a Buy rating and a price target of $440, highlighting the integration of Calpine as a significant opportunity for long-term power agreements [2][3] Group 2 - The acquisition of Calpine Corporation was completed on January 7, 2026, combining Constellation's nuclear assets with Calpine's natural gas and geothermal portfolio, which is seen as a strategic move for strengthening America's energy future [4][5] - Constellation operates the largest clean energy fleet in the U.S., with approximately 55 gigawatts of generating capacity across various energy sources, including nuclear, natural gas, geothermal, hydro, wind, and solar [5] - TD Cowen anticipates active contracting activity through 2026, with potential upside from gas power purchase agreements layered on top of Constellation's nuclear fleet [3]

Core Thesis - Constellation Energy Corporation (CEG) is positioned as a leading player in the US nuclear and clean-power sector, with a strong nuclear fleet and strategic growth initiatives in AI-driven data center demand [3][4]. Financial Performance - As of February 4th, CEG's share price was $250.46, with trailing and forward P/E ratios of 30.75 and 23.87 respectively [1]. - The company reported a cash balance of $4.1 billion and aims for EPS targets of $11 in 2026, $13 in 2027, and $16–17 in 2028, supported by operational efficiencies and planned share repurchases [5]. - CEG maintains a robust investment-grade balance sheet (BBB+/Baa1) and strong free cash flow projections of $4.5–6 billion through 2028 [5]. Growth Initiatives - CEG is expanding its capacity through various initiatives, including restarts and uprates of existing nuclear plants, targeting an additional 1 GW across multiple sites [4]. - Recent contracts, such as a 10-year/$840 million GSA power supply agreement and a 20-year PPA with Meta, highlight CEG's ability to secure long-term, high-quality contracts [3][4]. Market Position and Valuation - CEG trades at 26x NTM PE and 16x EV/EBITDA, reflecting premium growth expectations, with potential share price scenarios ranging from $250–300 (no new PPAs) to $500 (full nuclear rerating) [7]. - Key catalysts for growth include additional nuclear/gas PPAs, FY26 guidance, ZEC extensions, and PJM capacity developments, positioning CEG as a generational winner in clean energy infrastructure [7]. Historical Context - CEG's stock has appreciated approximately 14.60% since a previous bullish thesis in March 2025, which emphasized rising electricity prices and strong ROE compared to traditional utilities [8].

Industry Overview - The resurgence of nuclear power is driven by the needs of big tech and the growth of artificial intelligence (AI), as countries aim to meet rising energy demand [1] - Nuclear power accounts for nearly 20% of electricity generated in the U.S., with the Trump administration advocating for increased nuclear energy [1] Company Profiles Nano Nuclear Energy - Nano Nuclear Energy is a small-cap start-up founded in 2020, which went public in 2024, focusing on micro reactors and portable nuclear batteries for remote industrial sites, military bases, and space applications [3] - The company's micro-modular reactors (MMRs) are designed to be easier and less expensive to deploy than traditional reactors, with its flagship product being the Kronos MMR, acquired from Ultra Safe Nuclear Corporation [4] - As of the end of 2025, Nano reported a cash position of $203.3 million but had a net loss of $40.1 million, indicating it has several years before facing cash flow issues [5] Constellation Energy - Constellation Energy is a large-cap stock with the largest fleet of nuclear reactors in the U.S. and generates 10% of the clean energy in the U.S. through a diverse energy portfolio including nuclear, natural gas, geothermal, hydro, wind, and solar power [6] - The company reported revenue of $19.1 billion for the first nine months of 2025, reflecting a nearly 7% year-over-year increase, although its earnings per share (EPS) declined by 34% compared to the previous year [7] Stock Performance - Over the past year, Nano's shares have decreased by more than 27%, but they have increased by over 595% in the past three years [8] - Constellation's shares have fallen by more than 10% over the past year, while they have risen by more than 34% over the past three years [8]

Group 1 - Constellation Energy Corporation (NASDAQ: CEG) is highlighted as a noteworthy stock by Jim Cramer, who is bullish on its valuation despite a recent decline of over 20% in the stock price [1] - The Trump administration's plan to invest $15 billion in new power plants and implement caps on electricity prices has created uncertainty for Constellation Energy, which is primarily an independent power producer with significant nuclear exposure [1][3] - Cramer believes that Constellation Energy is worth buying into during this period of weakness, as new power plants take a long time to build and the company does not engage in price gouging [1] Group 2 - Constellation Energy produces and supplies electricity, natural gas, and sustainable energy solutions through various assets, including nuclear, wind, solar, natural gas, and hydro [3] - A caller mentioned selling shares of Constellation Energy due to the stock's decline following President Trump's comments about electricity rate caps, indicating market sensitivity to political statements [3] - While Constellation Energy shows potential as an investment, there are opinions suggesting that certain AI stocks may offer greater upside potential and carry less downside risk [4]

Company Overview - Constellation Energy Corporation (CEG) was founded in 2021 and is based in Baltimore, Maryland, focusing on producing and selling energy products and services in the United States [1] - The company has a market capitalization of $101.7 billion and operates through various segments including Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions [1] Stock Performance - CEG shares have underperformed the broader market, declining 12.4% over the past 52 weeks and 24% year-to-date (YTD) [2] - In comparison, the S&P 500 Index has returned 15.4% over the past year and increased by 1.1% in 2026 [2] - CEG also lagged behind the State Street Utilities Select Sector SPDR ETF (XLU), which rose by 10.5% over the past 52 weeks and 1.3% this year [3] Earnings and Analyst Ratings - For the fiscal year ending December 2025, analysts expect CEG to report a 7.5% year-over-year growth in adjusted EPS to $9.32 [6] - The company has a mixed earnings surprise history, surpassing or matching estimates in three of the past four quarters while missing once [6] - CEG holds a consensus "Moderate Buy" rating, with 12 "Strong Buys," one "Moderate Buy," and five "Holds" from 18 analysts [6] Analyst Sentiment - Analyst sentiment has become increasingly bullish, with "Strong Buy" recommendations rising from 11 to 12 over the past three months [7] - On January 20, Wells Fargo analyst Shahriar Pourreza maintained an 'Overweight' rating on CEG and lowered the price target from $478 to $460 [7] Price Targets - CEG's mean price target is $412.06, indicating a 53.5% premium to current market prices [8] - The highest target of $481 suggests a potential upside of 79.2% from current levels [8]

Core Insights - The utility sector is not homogeneous, and Constellation Energy is positioned to capitalize on the growing demand for electricity driven by artificial intelligence [1][2] Industry Overview - The demand for electricity from data centers is projected to increase by 165% from 2023 to 2030, primarily due to the expansion of AI [1] - Utilities are well-positioned to meet this rising demand, with significant growth expected in the sector [2] Company Analysis - Constellation Energy is the largest producer of carbon-free electricity in the U.S., operating 21 nuclear reactors that account for 86% of its output [4] - The company has the potential to quickly ramp up electricity production, which is expected to accelerate its revenue growth in the coming years [5] - Constellation's nuclear capabilities position it as a key player in the evolving energy landscape, with global nuclear production anticipated to grow over 50% by 2040 [7] Financial Metrics - Current market capitalization of Constellation Energy is $88 billion, with a recent stock price of $280.57 [8] - The stock has experienced volatility, with a recent decline attributed to government threats of capping electricity rates, presenting a potential buying opportunity [9]

Industry Overview - Nuclear energy is gaining interest due to soaring energy demands in the United States, with significant planned investments expected in the coming decades [2][4] - The U.S. government has set ambitious targets for nuclear energy production, aiming for 400 gigawatts (GW) of electricity capacity by 2050, which is nearly four times the current levels [4] Company Position - Constellation Energy is the largest producer of carbon-free energy in the U.S., with a nuclear asset capacity of 22.1 GW, more than double that of its closest competitor [5] - The company has established partnerships with leading AI firms, including a 20-year power supply agreement with Microsoft and a similar deal with Meta Platforms [6] Financial Outlook - Constellation Energy's current dividend yield is just over 0.5%, but the company has a low dividend payout ratio of 17% based on full-year 2025 earnings estimates [7][8] - Analysts project that Constellation Energy's earnings per share will grow by 15% annually over the next three to five years, allowing for potential double-digit dividend increases without significantly stretching the payout ratio [8]