Right. Constellation Energy. (CEG +4.44%). They’ve got a whole lot of nuclear plants, which, let’s be honest, is a bit of a conversation starter at dinner parties. And everyone – and by everyone, I mean the hyperscalers, the data centers, the ones guzzling power like it’s going out of style – they’re all banging down Constellation’s door. The stock was doing rather well, peaking at over $400 a share. But, predictably, things rarely stay that simple, do they?
See, Constellation sells wholesale energy. Rising prices? Good. Makes sense. Except someone – regulators, naturally – decided that maybe, just maybe, rising electricity costs are… unpopular. A novel concept, I know. They’re proposing rate caps in the Mid-Atlantic, which is where Constellation does a lot of its business. So, the stock’s dipped below $290. Is this a moment? A chance to swoop in? I’ve been staring at the charts, doing the mental gymnastics, and honestly? It’s complicated. Like most things worth having.
Why the Sudden Chill?
Apparently, back in January, the Trump administration – yes, that Trump administration – teamed up with 13 state governors. A coalition of the… willing? They agreed on some “Principles” about energy. It sounds dreadfully official, doesn’t it? The gist of it was encouraging this one-time emergency auction for new power generation, and basically getting the big tech companies to bid on 15-year contracts. They also want to keep a lid on price hikes for regular folks. All very noble, of course.
The problem, from Constellation’s perspective, is that they’re a wholesale producer. They sell into competitive markets. And they have a lot of assets in that region. Rising prices are good. Price caps? Less so. It’s basic economics, really. The stock’s been feeling the pinch ever since. It’s like watching your favorite pair of shoes slowly fall apart. Annoying, isn’t it?
They did manage to clear all their PJM capacity in the recent auction, which is… something. Revenue at the approved cap of $333.44 per megawatt-day. Not exactly a windfall, but it’ll do. They’re also signing these long-term deals – Power Purchase Agreements, or PPAs – with the hyperscalers. Microsoft, Meta… even CyrusOne, the data center people. Locking in revenue, hedging against volatility. Smart. It’s like having a decent emergency fund. You still worry, but at least you’re not completely panicked.
So, Should You Buy?
Constellation’s been riding this “AI power trade” wave, thanks to all those nuclear plants. They benefit from rising costs, but these regulatory moves… they could cap the upside. It’s a bit of a tug-of-war, isn’t it? And I hate tug-of-war.
The stock is down 32% from its high. The forward P/E ratio is 24.4, down from 43.1 a few months ago. It’s not exactly screaming “bargain,” but it’s… reasonable. They’re still locking in deals, and demand is going to keep rising. So, yes. I think it’s a buy. While it’s under $290. But don’t blame me if it doesn’t work out. I’m just a woman with a spreadsheet and a slightly cynical outlook. And a very strong coffee.
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2026-02-17 04:13