10 Hidden AI Stocks to Buy Now

5. Constellation Energy Corp. (NASDAQ:CEG)

Number of Hedge Fund Holders: 71

Constellation Energy Corp. (NASDAQ:CEG) is a supplier of power, natural gas, and energy products and services, like electricity. It serves a range of residential, commercial, and industrial clients.

The increase in demand for power due to a surge in AI data centers has put a spotlight on energy firms. Constellation Energy Corp. (NASDAQ:CEG) itself uses AI to improve customer service, analyze energy usage data, predict demand, and optimize grid management.

CEO Joseph Dominguez emphasized the importance of data centers for national security and economic competitiveness. He highlighted the benefits of colocating data centers with nuclear power plants, offering a faster and more cost-effective solution for developing critical digital infrastructure.

Goldman Sachs projects a 2.4% annual increase in power demand until 2030. The company is set to benefit from the rise in clean energy demand amid the data center and AI boom.

It’s also investing $800 million to upgrade its Illinois plants, boosting energy output by 158 megawatts. The re-powering of the Criterion wind project in Maryland will further increase clean energy production by 79,000 megawatt-hours.

It is expanding its clean energy portfolio and investing in sustainable initiatives and recently issued a $900 million green bond to fund projects like nuclear upgrades, clean hydrogen production, and energy storage. Major tech companies have long-term contracts with Constellation Energy Corp. (NASDAQ:CEG) for sustainable energy, providing the company a stable revenue stream.

As of the second quarter, the stock is held by 71 hedge funds. Coatue Management is the largest shareholder and has stocks worth $982,902,129 as of June 30. The company plans to buy back $1.5 billion worth of shares as of August.

It is expected to grow its earnings by 45.84% this year. However, for Q2 of 2024, the year-over-year revenue growth was only 0.53%, translating into a $5.48 billion revenue.

ClearBridge Global Infrastructure Value Strategy stated the following regarding Constellation Energy Corporation (NASDAQ:CEG) in its first quarter 2024 investor letter:

“On a regional basis, the U.S. and Canada was the top contributor for quarter, with U.S. electric utility Constellation Energy Corporation (NASDAQ:CEG) and U.S. rail operator CSX the lead performers. Constellation Energy is primarily a nuclear generation company and is the largest producer of carbon-free electricity in the U.S., serving states including New York, Illinois, Maryland, Pennsylvania and New Jersey. The company’s combined generation capacity is more than 32 GW and 90% of annual output is carbon free. Constellation has been a beneficiary of AI and subsequent power demand as its 24/7 base load nuclear generation can get premium contracts.”