Shares of Constellation Energy (CEG) have fallen as much as 12% today in tandem with other nuclear energy names, after government regulators blocked Amazon’s (AMZN) power agreement with provider Talen Energy (TLN). CFRA Equity Analyst Daniel Rich joined Catalysts to discuss what the news means for Big Tech’s nuclear energy future as companies search for clean methods to power their AI data centers. “It certainly is a setback,” Rich tells Catalysts hosts Seana Smith and Madison Mills, but it’s far from over. The CFRA analyst notes that the US Federal Energy Regulatory Commission (FERC) decision was split, and it “wouldn’t be surprising” for there to be a rehearing shortly. Though the regulatory roadblock adds a bit of near-term uncertainty, Rich is still “pretty favorable” on Constellation Energy and its peers given the interest from Big Tech — Amazon, Alphabet’s Google (GOOG, GOOGL), and Microsoft (MSFT) have all announced investments in nuclear power. “Whatever happens with the [FERC] decision, we think Constellation is in a pretty good spot,” Rich says, adding that today’s sell-off in shares presents a viable buying opportunity for investors. The regulatory news overshadowed Constellation Energy’s robust third quarter results out Monday morning. The energy giant raised its full year adjusted operating earnings guidance after topping Wall Street’s expectations for operating revenue by more than $1 billion. In the earnings release, Constellation Energy CEO Joe Dominguez lays out “the importance of AI and the data economy to America’s economic competitiveness and national security can’t be overstated.” CFRA maintains its Buy opinion on Constellation shares, but lowered the 12-month price target by $25 to $280 per share citing the uncertainty from the FERC decision. Even with Monday’s drop, Constellation Energy stock is up more than 90% this year and is among the best-performing stocks in the S&P 500 (^GSPC). For more coverage on Big Tech’s adoption of nuclear energy, catch Yahoo Finance’s interviews with X-energy CEO Clay Sell about Amazon’s investment into the nuclear reactor designer, Kairos Power Co-Founder and CEO Mike Laufer’s input on the nuclear startup’s partnership with Google, and Oklo (OKLO) Co-Founder and CEO Jake DeWitte who explains the business model for nuclear energy providers.
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