We recently compiled a list of the Top 10 AI Stocks on Latest Analyst Ratings and News. In this article, we are going to take a look at where Constellation Energy Corporation (NASDAQ:CEG) stands against the other AI stocks.
As President Joe Biden nears the end of his term, he is issuing a series of executive orders. In the latest, the President has signed an order to provide federal support to address the massive energy needs of fast-growing advanced artificial intelligence data centers.
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The order will allow federal land owned by the Defense and Energy departments to host gigawatt-scale AI data centers and new clean power facilities. According to Biden, the order will “accelerate the speed at which we build the next generation of AI infrastructure here in America, in a way that enhances economic competitiveness, national security, AI safety, and clean energy”.
According to the order, companies tapping federal land for AI data centers must also purchase an “appropriate share” of American-made semiconductors. These purchases will be decided on a case-by-case basis.
“It’s really vital that we ensure that the AI industry can build out the infrastructure for training and using powerful AI models here in the United States”.
-White House technology adviser Tarun Chhabra.
Several known names, including OpenAI Senior Vice President of Global Affairs Chris Lehane, have commended this effort. Lehane also called out for cultivating a robust domestic infrastructure for the growing U.S. artificial intelligence sector.
“So what you get with the Biden administration today is — at least from a signaling perspective — on federal land, trying to short the timeline between when you can get your project shovels in the ground and then the project going forward”.
-Chris Lehane
According to Lehane, the incoming Trump administration sees AI through two lenses — national security and economic security. He hopes that both sides of the coin will amalgamate into a national strategy.
AI Company OpenAI has also recently laid out its vision for artificial intelligence development in the U.S. According to the company, the US needs investment from abroad and supportive regulation to stay ahead of China in the race for nascent technology. In a 15-page document called the “Economic Blueprint”, it said that “Chips, data, and energy are the keys to winning AI” and that the U.S. needs to act now to craft nationwide rules that can help secure its advantage.
OpenAI released the document days before President-elect Donald Trump takes office, with CEO Sam Altman also previously donating around $1 million to Trump’s inaugural fund in hopes of fostering a positive relationship.
“There’s an estimated $175 billion sitting in global funds awaiting investment in AI projects, and if the U.S. doesn’t attract those funds, they will flow to China-backed projects —strengthening the Chinese Communist Party’s global influence”.
-OpenAI said in the document.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close up of a wind turbine producing electricity as the sun sets.
Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 78
Constellation Energy Corporation (NASDAQ:CEG) is an energy provider specializing in clean, carbon-free energy solutions. On January 10, the company revealed that it has agreed to buy privately held natural gas and geothermal company Calpine Corp for $16.4 billion. This cash-and-stock deal is driven by the rapid growth of AI data centers that require huge amounts of energy to power them. Deemed as one of the biggest acquisitions in U.S. power industry history, the transaction valued Calpine at $26.6 billion, including debt. The agreement will turn Constellation into the largest U.S. independent power provider, potentially adding $2 billion to Constellation’s free cash flow annually. According to Constellation, the deal would allow the companies to have nearly 60 gigawatts (GW) of capacity from zero- and low-emission sources, including nuclear, natural gas, and geothermal. Constellation’s employee base is also expected to grow by nearly 20% to 16,500.
“Demand for our products is expected to grow by levels we haven’t seen in a lifetime”.
-Constellation CEO Joe Dominguez said on a call with investors following the announcement.
Overall CEG ranks 3rd on our list of the top AI stocks on analyst ratings and news. While we acknowledge the potential of CEG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CEG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
