4. Constellation Energy Corp (NASDAQ:CEG)
Number of Hedge Fund Investors: 54
Earlier this month, UBS published a list of stocks it believes would benefit from the AI boom as it expects global AI revenues to cross $400 billion in the next three years. Constellation Energy Corp (NASDAQ:CEG) is among the stocks the firm is recommending investors to buy. Constellation Energy Corp (NASDAQ:CEG) recently posted Q1 results. Adjusted EPS in the quarter came in at $1.82, beating estimates by $0.53. Revenue in the quarter fell 18.6% year over year to $6.16 billion, missing estimates by $20 million.
Constellation Energy Corp’s (NASDAQ:CEG) management was careful while talking about AI-led data center growth in its latest earnings call, adding that it’s more interested in providing clean, nuclear energy to the interested companies. Constellation Energy Corp (NASDAQ:CEG) CEO Joseph Dominguez said during Q1 earnings call:
“I think the interest is like nothing else we’ve seen in 20 years in terms of the number of clients that are coming to us, the size and scale of the opportunity. So I would say that, you know, kind of the, you know, what you’re hearing in the market is certainly accurate in terms of the inbounds that we’re getting from an origination team perspective. And frankly, some of the outreach we’re doing. So that that all seems to be right. Right now it’s focused on nuclear because the clients we’re dealing with aren’t interested, as a general rule, in emitting technologies. They have sustainability goals. They have 24/7 clean goals, and they want to stay on that path. So we’re focused right now on the nuclear plant opportunity and monetizing the value of the attributes that we have.”
Read the full earnings call transcript here.
Sound Shore Management made the following comment about Constellation Energy Corporation (NASDAQ:CEG) in its Q3 2023 investor letter:
“On the plus side of the ledger, we had strong contributions from independent power producers Vistra and Constellation Energy Corporation (NASDAQ:CEG). Both stocks surged with higher US electricity prices as strong summer demand exposed reliability issues in many regions of the nation’s electric grid. Meanwhile, Midwest focused Constellation is the biggest producer of carbon-free electricity in the US with nuclear power plants representing the majority of its capacity. We added the name in January 2023 when the stock was trading at a below normal 15 times earnings. Our research identified an upside to earnings power from maturing hedges and regulatory changes, including the Inflation Reduction Act’s nuclear credit. A recent spinout from Exelon Corp, we viewed the strength of Constellation’s clean, reliable baseload power model as an appealing and high potential offering for residential and commercial customers. The company’s recent contract to supply Microsoft at premium power prices is evidence of the opportunity. Constellation is yet another example of an industry undergoing tremendous change that can offer attractive investment opportunities for investors with patience and a research process to uncover specific companies that are well positioned.”
