Constellation Energy Stock Forecast: Google and Amazon Deals Strengthen the AI Nuclear Power Story

Reuters, citing a report by Bloomberg, said that Google is nearing completion of a multi-year contract worth $1 billion or more to purchase nuclear power from Constellation Energy. Neither Google nor Constellation publicly announced the deal by the cutoff of my writing this, so I consider it incomplete.

It is strategically important for Google to join the likes of Microsoft, Meta, Walmart and Amazon in being large technology and corporate customers to purchase bulk electricity to power their data centers over many years. Current nuclear capacity is more valuable to these customers than exposures to the short-duration wholesale power markets.

The main value of the deal is duration, as a completed Google agreement would reinforce the same long-duration contracting trend seen in Constellation’s Microsoft agreement, which also reinforces Constellation's view on its generation fleet for selling long-term, nondiscriminatory power rather than short-term, spot market power for commoditized electricity.

Constellation Energy announced a 20-year agreement on September 30th with Amazon to purchase 690 MW of clean energy from its Calvert Cliffs Clean Energy Center. Calvert Cliffs is already operating; the agreement includes approximately 190 MW of additional nuclear capacity expected to come online between 2030 and 2032.

The agreement is expected to support more than $3 billion of infrastructure investment at the 1,790 MW Calvert Cliffs plant, including plant improvements and the 190 MW uprate, and provides revenue certainty to pursue another 20-year operating-license extension, as well as other advanced nuclear opportunities at the site.

It is important to point out that the electricity will be interconnected to the larger PJM system and will not be dedicated to a single Amazon Data Center. This structure may become a useful model for other hyperscalers.

Calpine's acquisition by Constellation closed on January 7. As a result, Constellation claims to have created the largest private-sector power production company in the world. The combined company has approximately 55 gigawatts (GW) of generating capacity across nuclear, natural gas, wind, solar, and other power and energy sources.

The combined company also has approximately 2.5 million customer accounts, including about 80% of the Fortune 100. With a customer account base of that size, the company can more easily provide large data center customers with a bundled, “fuel-flexible” energy solution. A bundled, fuel-flexible energy solution gives customers exposure to multiple fuels and/or types of generation.

The Calpine natural-gas fleet provides flexible capacity and can be dispatched to fill in when demand increases. However, combined with Constellation’s nuclear baseload generation, the enlarged company can provide a fuel and generation mix portfolio that meets the needs of customers, including AI and other energy-intensive facilities, that need power 24 hours a day.

The second quarter results showed the impact of the expanded platform. Adjusted Operating EPS was $2.55 versus $1.91 a year ago. GAAP EPS was $1.42. Management attributed the stronger adjusted results to the Calpine contribution and favorable market conditions to some extent, offset in part by nuclear outages.

The strong quarter allowed management to raise the full-year 2026 adjusted operating EPS guidance to $11.50 - $12.50. Additionally, Constellation disclosed 920 MW of long-term nuclear power purchase agreements during the quarter, with expected start dates between 2029 and 2032.

The disclosure of these agreements helps affirm the thesis. The more Constellation locks in long-term contracts with investment-grade customers, the more secure the earnings stream will be from long-term contracts, as opposed to being at the mercy of the volatile power market.

Constellation is also progressing with the restart of Three Mile Island Unit 1, now called the Crane Clean Energy Center, under its long-term agreement with Microsoft. Recently, Federal officials granted a waiver that allows transfer of the existing capacity-interconnection rights to the plant and the Nuclear Regulatory Commission (NRC) approved an important amendment to Constellation’s fuel license.

Constellation is aiming for a 2027 restart. Bringing an existing nuclear asset back into service can be significantly faster than building a new one, especially as power demand is outpacing new generation.

Should Crane restart successfully and on schedule, it would also help build a stronger case for the recommissioning and/or extension of other nuclear assets. That would also help Constellation monetize AI-driven demand for power without being reliant on new nuclear construction.

Constellation is adding flexible generation, starting with its September 10 agreement to acquire the 609 MW Rhode Island State Energy Center from Shell for $715 million. This combined cycle natural gas plant is expected to provide capacity and energy to the ISO New England market and will be a part of Constellation’s merchant generation portfolio after the transaction closes, subject to customary approvals and closing conditions.

Also, as part of the regulatory requirements associated with the Calpine transaction, Constellation is required to sell some of its other assets. For this reason, Constellation is altering its strategy to focus less on adding megawatts and more on reshaping its portfolio based upon regions and assets to which management has the best return potential.

The overall strategy is to incorporate both nuclear and gas to support electricity demand which is becoming more dispatchable and will be supported by Artificial Intelligence. Long duration clean, baseload nuclear generation, and gas with the flexibility to quickly change output to meet varying demand complement each other and support the region’s grid.

The bullish case for Constellation is straightforward. AI data centers will require huge, continuous, and reliable sources of electricity. Construction of new power generation and transmission facilities will take a long time. Constellation has a fleet that is difficult to replicate, and it will be hard to build new power generation facilities in a short time frame.

There are long-term power agreements with Microsoft, Meta, Walmart, and Amazon. There could be a contract with Google in the future. Contracted power demand makes the AI narrative more compelling.

The primary concern for Constellation is valuation. The stock is currently valued for rising AI power demand. If there are delays in the restarts or uprates of nuclear plants, weaker power prices, regulatory changes, slower integration with Calpine, or slower hyperscaler demand, expectations could come down and Constellation's stock could be negatively impacted.

Constellation Energy closed at $267.62 on October 5 after bouncing up from $251.88 and rising trendline support. CEG still needs to break through the recent resistance to continue the uptrend, and until then, the recovery will be questioned.

Constellation Energy Stock Price Chart - Source: Tradingview

Relative Strength Index (RSI) has recently bounced back up to 55 from the 44 level and signal line, and has also crossed back over the neutral 50 level. This signals improving buying pressure, and is in a bullish position.

To continue the recent uptrend, CEG must break through the resistance level at $270.99, with immediate focus on $276.30. If CEG breaks through $285.81, then the $305.51 level becomes the focus. If CEG breaks below $251.88 support, the next downside levels would be $240.39 and $228.77.

I am cautiously bullish, focusing on CEG holding above $251.88, but need to watch for confirmation around the $268.99 - $270.99 resistance.

Key Levels

• Latest completed close: $267.62

• Major support levels: $251.88, $240.39, $228.77

• Major resistance levels: $268.99 to $270.99, $276.30, $285.81

• RSI: approx. 55, improving

• Recovery trigger: 4-hour close above $270.99

• Breakdown trigger: break below $251.88

Constellation is in focus because its AI-power thesis is starting to play out with the announcement of long-duration contracts. The most recent contract announcement is Amazon’s 20 year, 690 MW nuclear PPA at Calvert Cliffs and a Reuters article stating Google is finalizing a similar $1 billion-plus multi-year nuclear power contract.

A close above $270.99 would reclaim the moving average resistance cluster, and a close above $276.30 would reclaim the long-term resistance zone, thus strengthening the overall case for the remaining upside. A close below $251.88 would materially weaken the overall case for recover

Constellation Energy has increasingly shifted away from the conventional power production business and more toward providing strategic infrastructure to the AI economy. The contracted revenue from the Amazon deal is already proving the thesis, and the reported Google negotiations could further strengthen the case if completed. Calpine adds flexible gas and geothermal generation alongside Constellation’s nuclear fleet.

Constellation Energy Corporation (CEG), remains cautiously bullish while it holds above $251.88, but the $268.99 to $270.99 resistance cluster is the immediate test. The long-term view will also depend on Constellation's ability to enter into long-term contracts with other energy consumers to secure stable, long-term revenues, successfully restart the Crane plant, and integrate Calpine without raising expectations too quickly.