10 Best Performing Utilities Stocks So Far in 2025

3) Constellation Energy Corporation (NASDAQ:CEG)

% Gain on a YTD Basis: 32.5%

Number of Hedge Fund Holders: 85

Constellation Energy Corporation (NASDAQ:CEG) generates and sells electricity in the US. The company was awarded over $1 billion in combined contracts by the U.S. General Services Administration (GSA) to supply power to over 13 government agencies and perform energy savings and conservation measures at five GSA-owned facilities in the National Capital Region. Constellation Energy Corporation (NASDAQ:CEG)’s retail subsidiaries will provide the services to the GSA.

The energy sector continues to witness a significant shift towards clean and renewable sources, aided by global efforts to combat climate change and the higher demand for sustainable power solutions. Constellation Energy Corporation (NASDAQ:CEG)’s emphasis on carbon-free generation aligns well with this trend, mainly as industries such as AI and data centers need constant power supply. The strong interest in round-the-clock renewable power, highlighted by the Microsoft deal, reflects a new market segment for energy providers.

The electrification of industries (such as AI data centers, EVs, and industrial decarbonization) continues to fuel increased electricity demand. Fred Alger Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“Constellation Energy Corporation (NASDAQ:CEG) is the largest producer of clean energy in the U.S., with 32,400 Megawatts of capacity, approximately 67% of which is nuclear generated. Its nuclear, hydro, wind, and solar facilities provide 10% of all clean energy on the U.S. grid and 22% of its clean baseload power. We believe the company stands to benefit from the increasing electrification of the U.S. economy. The rise of electric vehicles, data centers, and reshoring of American manufacturing is driving U.S. electricity load growth for the first time in nearly two decades. During the quarter, shares detracted from performance due to a combination of regulatory challenges and broader industry pressures. The Federal Energy Regulatory Commission (FERC) rejected an interconnection agreement between Talen Energy’s Susquehanna nuclear plant and an Amazon data center, raising concerns about similar deals and regulatory hurdles for the nuclear industry. While this event was outside Constellation’s control, we believe it does not alter the thesis that tight power markets should drive higher pricing for the company. In our view, the FERC rejection also underscores anticipated tightness in mid-Atlantic power markets, reinforcing the long-term value of Constellation’s under-monetized assets.”