We recently published a list of Jim Cramer is Talking About These 10 Stocks as Markets Rebound. Since Constellation Energy Corp (NASDAQ:CEG) ranks 7th on the list, it deserves a deeper look.
Jim Cramer in his latest program on CNBC talked about the latest rebound in the markets followed by a major selloff on Monday, saying we can “fret” about the interest rates, jobs market or mortgage rates, or we can just buy the stocks of “tremendous” companies and hold on to them.
“Stock prices have become so dependent on the macro, the carry trade, the Fed chatter, that it’s impossible to give you a pat answer even as I’ve told you over and over again that corporate America is doing much better than anyone would expect at this point in the cycle,” Cramer said.
Cramer lamented yet again that people believe a 25bps decline in interest rates could somehow “motivate” people to increase spending and on these hopes they often buy “phony” ETFs.
Cramer also said that the Fed won’t begin to cut rates until it sees consumers “rebelling” against higher prices forcing companies to roll back price increases to pre-COVID levels. Jim Cramer believes we now have an “empowered consumer” who is willing to make choices and choose options that are cheaper and better.” He said that during the pandemic, amid higher liquidity, people were willing to accept higher prices, but not anymore.
For this article we watched several latest programs of Jim Cramer and picked 10 stocks he’s talking about. 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).
Constellation Energy Corp (NASDAQ:CEG)
Number of Hedge Fund Investors: 54
Jim Cramer in a latest program said Constellation Energy is a “solar play” which is already up a lot this year(62%).
“This is a solar play, that is a very good company,” Cramer said.
He recommended investors to hold the stock and not sell it.
Constellation Energy Corp (NASDAQ:CEG) is set to benefit from the rise in clean energy demand amid the data center and AI boom. Constellation Energy Corp (NASDAQ:CEG) has a diverse range of power generation assets including nuclear, solar, wind, natural gas, and hydroelectric. Constellation is expected to benefit from secular growth catalysts. Goldman Sachs projects a 2.4% annual increase in power demand until 2030, driven by data centers, with the transportation sector’s electricity consumption growing by 0.6% annually due to the rise in electric vehicles.
Constellation Energy Corp (NASDAQ:CEG) is one of the leaders in the nuclear energy space. It generated 41.1 TWh of electricity from nuclear plants and 5.8 TWh from other assets in Q1 2024/ As of July last year Constellation Energy Corp (NASDAQ:CEG) was generating 26,270 megawatts in nuclear power, 157% more than Duke Energy’s 10,210 megawatts.
While Constellation Energy Corp (NASDAQ:CEG) management was very practical and cautious talking about data center-related opportunities during Q1 earnings call, it did say that it’s seeing a level of demand that it never experienced in the last 20 years.
We’re seeing interest in developing projects that are on a size and scale that presently don’t exist, but will be needed for training systems and other things to kind of build out and support the need for all of these foundational models. I think they’re up to 170 plus now. Foundational models that are going to require training, data centers. These are things could be aerodynamics or pharmaceuticals, but essentially, these very, very large computers that would do nothing more than train for a period of time on all of the learnings in every country, in every language, from the beginning of time until now, be positioned to answer the questions of the future to advance these different industries.
Read the full earnings call transcript here.
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.”
Overall Constellation Energy Corp (NASDAQ:CEG) ranks 7th on Insider Monkey’s list titled Jim Cramer is Talking About These 10 Stocks as Markets Rebound. While we acknowledge the potential of Constellation Energy Corp (NASDAQ:CEG), our conviction lies in the belief that 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.