Why Nvidia Stock Could Lag Behind A Key AI Energy Company

Core Viewpoint - Nvidia's stock has increased by 156% in 2024, while Constellation Energy's shares have risen by 129%, suggesting a competitive investment landscape between the two companies [1][2]. Group 1: Constellation Energy's Growth Potential - Constellation Energy recently signed a 10-year agreement with Microsoft worth approximately $16 billion, indicating strong demand for nuclear energy [2]. - The company operates the largest fleet of nuclear power plants in the U.S., which is increasingly preferred by tech companies for electricity generation [7]. - Following the announcement of a 20-year deal with Microsoft, Constellation's stock surged by 22$1.68, which was four cents below expectations, and revenue of $5.48 billion, falling short by$70 million [10]. - Despite the shortfall, Constellation raised its adjusted EPS outlook for fiscal 2024 by 4.8% to $8 per share, exceeding consensus estimates by 19 cents [11]. - Analysts have raised their price targets for Constellation significantly, with Wells Fargo increasing it by 20$300, Morgan Stanley by 24% to $313, and Jefferies by 40$256, reflecting positive sentiment towards the company's future growth [12][13]. Group 3: Market Demand and Industry Trends - The demand for energy in data centers is expected to surge by 160% by 2030, while overall U.S. power demand has remained stable from 2014 to 2024 [4]. - The total addressable market for AI-related hardware and software is projected to grow at an annual rate of 40% to 55%, reaching between $780 billion and$990 billion by 2027 [5]. - Anti-nuclear sentiment has diminished, with government support for nuclear and renewable energy increasing, positioning Constellation favorably in the energy market [14].