Key Takeaways
- Demand for electricity for artificial intelligence data centers are driving up shares of nuclear power firms Constellation Energy and Vistra.
- Both companies’ shares hit all-time records in the fourth quarter of 2024.
- Constellation plans to restart a unit of the Three Mile Island nuclear plant in Pennsylvania after striking a deal with Microsoft to use the electricity from that plant to power Microsoft’s data centers.
Shares of nuclear power providers Constellation Energy (CEG) and Vistra (VST) added to their gains of yesterday on optimism of growing demand for electricity by artificial intelligence (AI) data centers.
Constellation Energy shares soared 8.4% Thursday when the company announced it had struck a pair of deals worth more than $1 billion with the federal government’s General Services Administration. One of those involves supplying more than a dozen departments in five states with nuclear energy.
Today, Constellation reported that the Treasury Department has reversed an earlier ruling and will now allow existing nuclear plants to be able to qualify for federal tax credits under the Inflation Reduction Act of 2022. Shares rose 3.5% in recent trading.
The company made headlines in September when it reported that it would restart a unit of Pennsylvania’s Three Mile Island to produce energy for Microsoft’s (MSFT) data centers. That sent shares soaring; they hit an all-time high in early October and remain up about 115% in the past year.
Vistra also has benefited from the Constellation news, with shares soaring 8.6% yesterday and a further 7% today, leading S&P 500 gainers both days. Shares reached a record high in November and have added more than 300% in the past year.
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