Constellation Energy, a leading nuclear energy company, has been awarded a 10-year, $840 million contract with the US General Services Administration to supply power to government agencies. The nearly $1 billion contract begins in 2025 and will see Constellation Energy provide energy to major facilities such as the Federal Reserve System, Social Security Administration, and Army Corps of Engineers.
The company’s stock soared 8.5% after the announcement, with Vistra (VST) also seeing significant gains. The federal government’s decision to invest in nuclear energy is seen as a sign that the US is joining major corporate clean-energy buyers in promoting new nuclear energy capacity.
Constellation Energy Chief Executive Joe Dominguez stated that the US will support continued investment in reliable nuclear energy, allowing the company to extend the lives of its critical assets. The contract comes after Constellation Energy signed a two-decade contract with Microsoft to provide nuclear power for the tech giant’s data centers.
The growing demand for clean energy and the increasing use of artificial intelligence are driving interest in nuclear energy. McKinsey & Co. projects that data center energy demand will grow from around 4% currently to 11-12% by 2030, while Grid Strategies predicts a 16% increase in US electricity demand over the next five years.
Constellation Energy has received a high rating from investors, with an 81 Composite Rating out of 99. The company’s stock is seen as a solid investment opportunity due to its strong performance and growing demand for nuclear energy.
Source: https://www.investors.com/news/nuclear-sp500-stocks-start-2024-with-a-bang-840-million-government-contract