Analysts Bullish on Nuclear Energy Stocks

Published on August 12, 2024, Constellation Energy and Vistra Corp. have emerged as standout performers in the stock market this year, driven by the increasing demand for nuclear power to support data centers for artificial intelligence (AI). Constellation's stock has risen 62% year-to-date, making it the sixth-best performer in the S&P 500, while Vistra's shares have more than doubled, ranking second, just behind Nvidia. Analysts from Barclays have initiated coverage of Constellation with a buy rating and a price target of $211, suggesting an 11% upside from its recent close of $189.87. Constellation operates the largest nuclear fleet in the U.S., with 21 reactors, positioning it well to meet the growing electrification needs. Barclays analyst Nicholas Campanella views the recent 12% decline in Constellation's stock as a buying opportunity, emphasizing the value of its carbon-free baseload generation in a tightening supply market. Meanwhile, Vistra, which runs six reactors, has adopted a conservative financial outlook, prompting BMO Capital Markets to raise its price target to $120, indicating a potential 52% upside from its recent close of $78.64. Both companies are poised for significant growth as tech firms seek nuclear energy solutions for their data centers. CEOs Joe Dominguez and Jim Burke have confirmed ongoing discussions with customers about directly connecting data centers to their nuclear facilities. Additionally, Constellation is considering the reactivation of its Three Mile Island reactor, which has been offline since 2019, to meet the rising demand for nuclear energy.