10 Best Infrastructure Stocks To Buy Now

2. Constellation Energy Corporation (NASDAQ:CEG)

Number of Hedge Fund Holders In Q2 2024: 71

Constellation Energy Corporation (NASDAQ:CEG) is one of the biggest clean energy companies in the US. Its power generation capacity currently sits at a whopping 32GW, out of which 90% is generated through clean energy. The firm serves the needs of some of America’s largest states, such as New York and Pennsylvania. Constellation Energy Corporation (NASDAQ:CEG)’s energy generation profile, which is primarily geared toward nuclear energy can lead to significant headwinds in the future. This is because, unlike solar and wind power, nuclear is able to provide baseload electricity as the plants can run 24/7. For Constellation Energy Corporation (NASDAQ:CEG), it means that the budding demand for AI can see data center companies rush toward it since data centers also require an uninterrupted electricity supply. One key way through which the firm can benefit from this is by locking in contracts with high per unit prices that are based on today’s demand. Yet, at the same time, this catalyst could turn into Constellation Energy Corporation (NASDAQ:CEG)’s biggest headwind if the demand for AI doesn’t materialize and the potential that’s priced in the stock is priced out.

Constellation Energy Corporation (NASDAQ:CEG) shared insights into how it’s managing the expected data center demand. As per  the firm:

“I understand why there is a lot of attention on that, but we don’t want to leave this topic without saying that we are making great progress on power sales for on grid data centers through our 24/7 product. Utilities across PJM, and I think you’ve seen this in a bunch of the earnings calls, have been highlighting the growth of data centers in their service territory. In total, as you could see on Slide 6, they now identified 50 gigawatts or more that would come in over time. Now look, in fairness, I think there’s a bunch of duplication in those numbers and it’s going to occur over a longish time line. But the point is, I think it’s powerful that everyone is seeing the same thing, growth in this area. And those growth opportunities are good for Constellation because each of these grid data center projects, whether they’re located in Illinois, Ohio or anywhere else in PJM or in other regions, they present an opportunity for our commercial team to sell clean and reliable power through our 24/7 product and other offerings to these clients.”