We recently compiled a list of the 15 AI Stocks Every Investor Should Be Watching. In this article, we are going to take a look at where Constellation Energy Corporation (NASDAQ:CEG) stands against the other AI stocks.
No conservation about artificial intelligence today stands complete without the mention of DeepSeek. As reported by The Information, the Chinese AI startup that has startled the world of AI with its self-proclaimed cheaper and more efficient AI models is now looking for outside funding. The startup has drawn interest from names such as Alibaba and state funds, the report noted. These low-cost AI models that DeepSeek has presented recently have stirred up investor skepticism, making it quite evident that China is leaving no stone unturned to keep up in the AI arms race.
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With fame, however, comes challenges. For DeepSeek, the surge in demand has caused outages at the small startup. Due to this reason, the company needs more AI chips and servers so that it can handle the fast-growing usage of its models, all while supporting model development. According to the report, funds that have contacted DeepSeek include China Investment Corp and the National Social Security Fund. It further noted that the startup’s executives and hedge fund parent, High-Flyer Capital Management, are also discussing the potential shift to building a business that generates revenue, eventually profiting from research.
The move is in line with China’s efforts to bolster the country’s economy and advance its technological capabilities. This has been made evident from China’s President Xi Jinping’s recent meeting with private sector business leaders, including Alibaba co-founder Jack Ma and Liang Wenfeng, founder of DeepSeek.
“It’s a tacit acknowledgement that the Chinese government needs private-sector firms for its tech rivalry with the United States. The government has no choice but to support them if it wants to compete with the United States.”
-Christopher Beddor, deputy China research director at Gavekal Dragonomics in Hong Kong.
In a similar move announced before this news, OpenAI also plans to revamp its for-profit arm into a public benefit corporation. The move intends to ease restrictions imposed by its current non-profit parent and also increase investments.
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 February 19, the leading energy company reported its financial results for the fourth quarter and full year 2024. It beat Wall Street estimates for fourth-quarter profit driven by lower expenses and rising demand for power. The energy company posted adjusted earnings per share of $2.44 for Q4, topping the analyst consensus of $2.19. Meanwhile, revenue for the quarter came in at $5.38 billion, beating estimates of $4.75 billion.
Looking ahead, it has also reaffirmed its adjusted earnings guidance for 2025 of $8.90-$9.60 per share, while analyst consensus was $9.43. Key developments for the company include its definitive agreement to buy Calpine largely driven by the rapid growth of AI data centers, completing $1 billion in share purchases, and signing of a 20-year power purchase agreement with Microsoft, supporting the launch of the Crane Clean Energy Center.
“The 14,000 women and men of Constellation remain the driving force behind our strong operational and financial performance in 2024. Whether it’s AI and the many technologies of the future, or the everyday needs of families and businesses across our nation, Constellation provides the reliable and sustainable energy needed today and is investing billions of dollars to power our country for decades to come. We know that reliable, affordable and sustainable power is the key to America’s freedom and the life-blood of our economic prosperity, and over the past three years we have built a company that can meet that need for power with unmatched capabilities. As we look forward to closing the Calpine acquisition later this year, Constellation will create new capabilities that will increase product offerings across America to help families and businesses thrive and grow. There has never been a more exciting time for our country and for the energy industry. We are privileged to be at the heart of it all.”
-Joe Dominguez, president and CEO, Constellation.
Overall CEG ranks 10th on our list of the AI stocks every investor should be watching. 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.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
