AI ignites a nuclear power wave! Constellation Energy, which secured a 20-year order from Microsoft, raises its full-year profit guidance

Zhitong Finance learned that Constellation Energy (CEG.US) announced its third-quarter financial performance. Q3 non-GAAP earnings per share were $2.74, exceeding expectations by $0.06. Q3 revenue grew 7.2% year-on-year to $6.55 billion, surpassing expectations by $1.96 billion. Looking ahead, the company raised the midpoint of its non-GAAP operating profit guidance range and narrowed the range to $8.00 to $8.40 (market expectation was $8.05).

Recently, the surge in artificial intelligence and other computing has driven the booming development of power-hungry data centers, helping to boost electricity demand for the first time in decades. The U.S. Energy Information Administration estimates that electricity consumption will reach record highs in 2024 and 2025, driven by the use of artificial intelligence, the expansion of data centers, and the growing demand from residential and commercial consumers.

Thanks to this, Constellation Energy's stock price has more than doubled since the beginning of the year, as the group operates the largest fleet of conventional nuclear reactors in the United States. Constellation Energy operates 21 nuclear power plants in the U.S.

With the surge in artificial intelligence data centers, U.S. electricity demand has seen historic growth. These agreements are expected to support the deployment of up to 12 next-generation reactors, providing low-carbon power for the high-energy-consuming artificial intelligence data centers of Amazon (AMZN.US) and Google (GOOGL.US).

Last month, Microsoft also signed an agreement with Constellation Energy—the Three Mile agreement—to restart the Three Mile Island nuclear power plant and sell all generated power to Microsoft. Constellation Energy recently announced a 20-year power purchase agreement with Microsoft, which will support the launch of the Crane Clean Energy Center. Nuclear power generation does not produce carbon emissions, attracting tech giants like Microsoft that are committed to environmental goals.

Last Friday, the Federal Energy Regulatory Commission rejected the revised interconnection agreement that would directly connect Amazon's data center with competitor Talen Energy (TLN.US) at a new nuclear power plant in Pennsylvania. Following this, Talen Energy's stock price fell 13% in pre-market trading on Monday.

As a result, other nuclear power companies also saw their stock prices decline, with Constellation Energy (CEG.US) dropping as much as 13.15% in pre-market trading, and as of the time of writing, the decline narrowed to 7.45%