In today’s edition:
— Constellation Energy shares leap on Google nuclear deal
— Tesla shares show signs of life as deliveries rise in third quarter
— Giant battery farms can speed the switch to clean energy
— A third of the world faces extreme ozone pollution
— Data driven: How climate change can impact malaria
Constellation Energy CEG 0.00%↑ shares haven’t had a great year, despite some high-profile deals, which is why this week’s 15% spike in shares attracted notice from energy and AI investors after an agreement to supply nuclear power to Google GOOGL 0.00%↑.
The deal is the company’s third big nuclear distribution deal in four months, following a big announcement with Amazon AMZN 0.00%↑ last week and with Walmart WMT 0.00%↑ in June. All three involve Constellation Energy investing in and expanding existing nuclear reactors in its fleet with existing connections to the nation’s electric grids.
While many investors are excited about potential future nuclear opportunities, from small modular reactors to even nuclear fusion technology, the big tech and manufacturing companies are looking for extra power now. Companies such as Constellation, which have existing reactors with connections to grids, are reaping the benefits.
Constellation’s stock leaped more than 15% to above $300 a share on the deal Tuesday, the stock’s highest level since the end of May. It’s now up for the previous three- and six-month periods, but down 14% since the beginning of the year (Full disclosure: We own a small amount of CEG shares as part of a family climate portfolio).
Much of the problem has been execution, analysts said. Announcing deals is great, but maintaining pace of plant repairs and grid expansion, especially in the face of political opposition regarding AI data centers and concern about how grids will distribute electricity during busy times. The Google deal, for instance, included a promise from the tech giant to reduce its demand during times of peak energy needs.
All the deals involved some sort of investment help in updating the nuclear power plants from the buyers as well. How Constellation keeps cash flow and margins healthy during the projects is another big investor concern.
For now, Constellation seems back in the AI game, and some analysts even see its stock rising as high as $400 a share over the next year, especially with the overall stock market riding high this week on the continued AI story. The expansion of nuclear energy across the country is still a risky endeavor, however, so investors are right to monitor these companies closely, and take their wins where they can get them.
If you have ideas or suggestions for us, contact me directly at dcallaway@callawayclimateinsights.com.
Tuesday’s subscriber insights
