As the demand for robust, carbon-free energy solutions grows, certain energy stocks are showing exceptional promise, especially within the nuclear sector. Here’s a closer look at two standout performers this year, both of which are uniquely positioned to benefit from the expanding needs of high-energy-consuming industries like data centers powering the latest AI technologies.
Constellation Energy (NASDAQ: CEG) Nuclear Power Leader with Upside Potential
Constellation Energy has not only soared by 62% year to date but also stands out as the sixth-best performer in the S&P 500. As the owner of the U.S.’s largest nuclear fleet, Constellation is crucial in meeting the escalating demand for sustainable and reliable power sources. Barclays recently initiated coverage of Constellation with a buy rating, setting a price target of $211, which suggests nearly an 11% upside from its current trading price. Analyst Nicholas Campanella from Barclays highlighted the stock’s recent dip as a prime buying opportunity, noting the critical role of Constellation’s extensive nuclear operations in a tightening energy market.
Vistra Corp (NYSE: VST) Doubling Down on Nuclear Growth
Vistra Corp’s performance is even more remarkable, with the stock more than doubling this year, placing it just behind Nvidia as the second-best performer. The company operates six nuclear reactors and has adopted a conservative financial outlook, which BMO Capital Markets believes leaves substantial room for upward revisions. BMO has set a bullish price target of $120 on Vistra, indicating a potential 52% increase from its last close. The strategic focus of Vistra on leverging its nuclear assets to power high-demand sectors like data centers is a significant growth driver, according to James Thalacker of BMO.
Both companies are actively engaging with tech giants to integrate direct nuclear energy solutions into data center operations, reflecting a trend towards more sustainable energy practices. Notably, Constellation is exploring the reactivation of Three Mile Island’s Unit 1 to meet the surging demand for nuclear power—a move that could further enhance its market position.With these strategic initiatives and their pivotal roles in the energy sector, both Constellation and Vistra are not just responding to current market demands but are setting the stage for sustained growth in an increasingly electrified world. These stocks offer investors not only a foothold in energy but also exposure to the burgeoning tech sector’s energy demands.
