5. Constellation Energy Corporation (NASDAQ:CEG)
Coatue Management’s Stake Value: $1.48 billion
Number of Hedge Fund Holders: 85
Constellation Energy Corporation (NASDAQ:CEG) produces and sells energy products and services. The company’s strategic focus on carbon-free generation, mainly its robust position in nuclear energy, places it well for future growth. With increased global efforts towards combating climate change, the demand for clean energy sources is projected to increase. Constellation Energy Corporation (NASDAQ:CEG)’s extensive portfolio of nuclear and renewable assets enables it to meet the increased demand effectively. Also, the company’s ability to secure long-term contracts at premium prices demonstrates the emphasis placed on reliable, carbon-free energy.
Another growth opportunity for the company is the rapidly growing AI sector, which provides numerous opportunities for Constellation Energy Corporation (NASDAQ:CEG)’s expansion. The company has entered into a definitive agreement to acquire Calpine. This will couple the nation’s leading clean energy producer with the reliable, dispatchable natural gas assets of Calpine, resulting in opportunities to supply more customers coast-to-coast. The combination is expected to create the nation’s leading competitive retail electric supplier, offering 2.5 million customers with a broader array of customized energy and sustainability solutions and new product offerings in a bid to help them manage energy costs and achieve sustainability goals.
Fred Alger Management, an investment management company, released its Q4 2024 investor letter and mentioned Constellation Energy Corporation (NASDAQ:CEG). Here is what the fund said:
“Constellation Energy Corporation (NASDAQ:CEG) is the largest producer of clean energy in the U.S., with 32,400 Megawatts of capacity, approximately 67% of which is nuclear generated. Its nuclear, hydro, wind, and solar facilities provide 10% of all clean energy on the U.S. grid and 22% of its clean baseload power. We believe the company stands to benefit from the increasing electrification of the U.S. economy. The rise of electric vehicles, data centers, and reshoring of American manufacturing is driving U.S. electricity load growth for the first time in nearly two decades. During the quarter, shares detracted from performance due to a combination of regulatory challenges and broader industry pressures. The Federal Energy Regulatory Commission (FERC) rejected an interconnection agreement between Talen Energy’s Susquehanna nuclear plant and an Amazon data center, raising concerns about similar deals and regulatory hurdles for the nuclear industry. While this event was outside Constellation’s control, we believe it does not alter the thesis that tight power markets should drive higher pricing for the company. In our view, the FERC rejection also underscores anticipated tightness in mid-Atlantic power markets, reinforcing the long-term value of Constellation’s under-monetized assets.”
