The artificial intelligence (AI) revolution is driving unprecedented demand for electricity that powers the data centers at the heart of this technological wave. As AI systems become increasingly integral to everything from automotive technology to consumer applications, the requirement for reliable and sustainable power sources has surged. This burgeoning demand places nuclear power squarely back in the spotlight, offering a potent combination of reliability and zero emissions.
In 2025, certain nuclear power companies are uniquely positioned to capitalize on these trends, not just because of their existing infrastructure, but also due to recent legislative changes. The tax credit established under President Joe Biden’s landmark climate law now features a carve-out that will benefit some existing nuclear power plants, as outlined in final rules released by the Treasury Department on Jan. 3. This context sets the stage for a discussion on three key players in the nuclear power sector: Vistra (VST), Oklo (OKLO), and Constellation Energy (CEG), each starting the year on an upbeat note.
Nuclear Energy Stock #1: Vistra
Valued at a market cap of $56.7 billion, Vistra Energy (VST) is one of the top retail energy producers in the U.S., boasting a capacity of approximately 41 gigawatts driven by its diverse portfolio of nuclear, natural gas (NGG25), coal (LQG25), and solar power generation, in addition to hosting one of the world’s largest utility-scale battery projects.
In 2024, Vistra expanded its reach to 20 states and the District of Columbia, covering all major wholesale power markets in the United States. Demand for AI and data centers is increasing power needs in key markets such as ERCOT and PJM, positioning the company for significant long-term growth. “Power demand has never been this strong... there’s a finite number of these power plant operators and they have a scarcity value,” Guggenheim analyst Shahriar Pourreza recently told Bloomberg, naming Vistra as his top utility pick for 2025.
In 2024, VST stock skyrocketed 258%, making it the second-best-performing stock in the S&P 500. The stock also started the new year on an upbeat note, climbing 18% year-to-date.
Recent News for VST Stock
On Jan. 3, Evercore ISI highlighted that the final 45V rule contains several “favorable accommodations” for the hydrogen industry broadly and nuclear generation assets, benefiting companies like Constellation Energy (CEG), PSEG (PEG), and Vistra.
On Dec. 17, Vistra announced that two new utility-scale solar projects in Illinois are operational. Additionally, in response to growing concerns about reliability in the MISO market, the company has revised the retirement plan for its 1,185-MW Baldwin Power Plant in Baldwin, Illinois. Instead of closing in 2025, the plant will continue operating until 2027.
How Did Vistra Perform in Q3?
Vistra reported its third-quarter earnings results on Nov. 7. The company’s operating revenues grew 53.9% year-over-year to $6.28 billion, beating Wall Street’s estimates by $1.27 billion. Its GAAP EPS stood at $5.25, topping the consensus by $3.99. Notably, the addition of Harbor Energy in 2023 has contributed to improved top-line and bottom-line results.
Meanwhile, the company generated $1.4 billion in adjusted EBITDA. This represents an increase from $1.0 billion in the third quarter of 2022, though it’s slightly below the figure from the previous year, attributed to lower adjusted EBITDA margin resulting from mild weather, particularly since the weather in key markets such as Texas significantly affects energy demand. Vistra also generated $1.7 billion in cash flow from operations, maintaining its robust cash flow generation trend, which prompted the company to authorize an additional $1 billion in share repurchases.
While the results were solid, the highlight of the earnings report was exceptionally strong guidance. Vistra narrowed and increased its adjusted EBITDA guidance to a range of $5 billion to $5.2 billion for FY24. This is a 6% year-over-year increase at the midpoint, surpassing the upper end of its previous guidance. Furthermore, the company boosted its forecast for FCFbG, free cash flow before growth, to $2.75 billion at the midpoint, marking a 12% year-over-year increase and exceeding the previous range.
For FY25, Vistra projects its adjusted EBITDA to be between $5.5 billion and $6.1 billion, with a midpoint of $5.8 billion, which exceeds its prior forecast of $5.7 billion. Vistra also indicated that looking further ahead, the company anticipates the adjusted EBITDA midpoint could potentially surpass $6 billion in FY26.
VST Valuation, Dividend, and Analysts’ Estimates
Analysts tracking the company forecast a 24.79% year-over-year increase in its GAAP EPS to $4.48 for fiscal 2024, with revenue estimated to grow 16.74% from the previous year to $17.25 billion.
On the dividend side, VST’s annualized dividend of $0.89 translates into a forward yield of 0.55%. The most recent increase was 0.9% on Oct. 31. It features a five-year compound annual growth rate (CAGR) of 11.80% and has a moderate payout ratio of 34.58%. With that, the company is clearly prioritizing share buybacks. During the third quarter, it repurchased $400 million worth of its stock. Notably, the company has bought back 27% of its shares over the past three years, positioning it as one of the most aggressive stock repurchasers among all S&P 500 sectors.
In terms of valuation, the company’s forward EV/EBITDA ratio stands at 15.19x, well above the sector median of 10.92x and its five-year average of 8.32x. Although Vistra isn’t particularly cheap, its valuation appears reasonable given its strong growth prospects driven by the power demand growth megatrend.
What Do Analysts Expect for VST Stock?
Analysts have a consensus rating of “Strong Buy” on Vistra stock. Out of the 12 analysts covering the stock, 11 recommend a “Strong Buy” and one gives a “Moderate Buy” rating. Notably, the stock trades close to its mean price target of $167.33 but has 38.5% upside potential to the Street-high price target of $231.
Nuclear Energy Stock #2: Oklo
Oklo (OKLO), the nuclear power startup backed by OpenAI head Sam Altman, is a leading provider of advanced nuclear technology to generate clean, reliable, and affordable energy. Its distinctive business model works by constructing and operating its small, scalable reactors, known as “powerhouses,” which generate low-carbon, continuous electricity. The projected economics of the company’s small modular reactors (SMRs) are appealing, offering solid unit margins and attractive unlevered returns. Its market cap currently stands at $3.1 billion.
The company’s approach is designed to cater to the rapidly increasing demand from big tech that require reliable energy sources to power their data centers. Oklo has already established strategic partnerships, including a notable 500-MW agreement with Equinix (EQIX), demonstrating its ability to meet the needs of major clients in the data center and energy sectors. It’s important to note, however, that the company is still years away from production. Jeffrey Campbell, a senior analyst at Seaport Research Partners, said that the “best that can be said is that Oklo will be by far the earliest SMR to market if it gets approval in 2026 (or) earlier in 2027.”
Shares of the nuclear reactor startup have gained 6% since the start of the year.
Recent News for OKLO Stock
On Dec. 19, OKLO stock surged over 14% after Wedbush initiated coverage of the company with an “Outperform” rating and a $26 price target. Oklo is working to develop its first SMR, Aurora - a 15-MW passive compact fast microreactor - by 2027. This design will be among the first to receive HALEU fuel and aims for scalability to 50 MW and 100 MW. It is designed to operate for over 10 years before needing refueling. According to the firm’s analysts, the microreactor project pipeline is currently 93% complete, well ahead of its planned deployment in 2027.
On Dec. 18, Oklo and Switch entered into a non-binding Master Power Agreement to deploy 12 gigawatts of Oklo Aurora powerhouse projects through 2044. The master agreement sets a framework for collaboration, expecting individual binding agreements to be finalized as project milestones are achieved. “We are excited to collaborate with Switch on this historic agreement,” said Jacob DeWitte, Co-Founder and CEO of Oklo. This remarkable deal represents a more than sixfold increase in Oklo’s existing customer pipeline, which stood at 2.1 GW at the end of the third quarter, positioning the company for continued momentum. It also came on the heels of Oklo securing a 750 MW power supply agreement with two named data center providers.
OKLO’s Financials
Oklo released its most recent quarterly earnings report on Nov. 14. As previously noted, Oklo has yet to generate any revenue. Oklo reported operating expenses of $12.28 million in the third quarter, driven by its ongoing efforts to develop scalable, low-carbon energy solutions. It is reasonable to expect Oklo’s operating expenses to increase as the company intensifies its research and development investments to bring its SMRs to market by late 2027.
Meanwhile, the company ended the quarter with $288.5 million in cash and short-term investments, driven by the completion of its public offering deal with a special purpose acquisition company backed by Sam Altman, AltC Acquisition. Notably, Oklo has recorded a cash burn of $24.9 million from operating activities year-to-date and posted an operational loss of $37.4 million. It is also worth mentioning that the company is earning interest on its liquidity position, generating an interest income of $2.55 million during the third quarter.
On the business front, as previously mentioned, Oklo grew its customer pipeline from 1,350 MW in Q2 to 2,100 MW by November 2024, demonstrating growing customer confidence and the company’s ability to secure strategic partnerships with major industry players. Another significant development is the signing of a term sheet for Oklo to acquire Atomic Alchemy, a move that could potentially improve the economics of the company's recycling technology and enable the coproduction of valuable radioisotopes.
Looking ahead, Oklo anticipates its total cash burn from operating activities to range from $35 million to $45 million for FY24, with loss from operations expected to be between $40 million and $50 million. With that, OKLO’s cash burn rate appears healthy, with its cash reserves sufficient to fund operations for at least the next seven years, mitigating the immediate need for equity sales.
OKLO Valuation and Analysts’ Estimates
Analysts tracking the company forecast it will generate its first revenue of $15.97 million in FY27. Additionally, they anticipate Oklo will record its first profit of $0.20 per share in FY29.
In terms of valuation, the stock’s P/B ratio (TTM) currently stands at 11.71x, which is 587.09% higher than the sector median of 1.70x. At first glance, this might appear expensive. However, considering that the company could potentially lead the next era of global energy production, this valuation seems reasonable.
What Do Analysts Expect for OKLO Stock?
Oklo stock has light analyst coverage on Wall Street, with just a few analysts following the company and collectively assigning a consensus “Moderate Buy” rating. Out of the four analysts offering recommendations for the stock, two rate it as a “Strong Buy,” while the remaining two advise holding. The mean price target for OKLO stock is $28.00, which is 10.9% above Friday’s closing price.
Nuclear Energy Stock #3: Constellation Energy
Constellation Energy (CEG) is a Maryland-based company that generates and sells electricity in the United States. CEG was established as an independent, unregulated company in January 2022, when it was spun off from Exelon (EXC), incorporating Exelon Generation’s nuclear plants and other generating assets. Constellation owns approximately 33,100 MW of generating capacity. Notably, Constellation’s nuclear-powered electricity generation capacity totals 22,100 megawatts, accounting for 67% of its overall capacity.
Similar to Vistra, Constellation Energy is well-positioned to capitalize on the soaring energy demand fueled by the AI revolution and the expansion of data centers. The company's focus on strategic investments in nuclear energy, operational efficiencies, and strong partnerships solidifies its position as a leader in the emissions-free energy market.
Shares of Constellation Energy have rallied 26% since the start of 2025.
Constellation Soars on Blockbuster Calpine Deal
On Jan. 10, CEG stock surged over 25% following the announcement of its agreement to acquire Calpine in a cash-and-stock deal valued at $26.6 billion. As a result, CEG, already the largest nuclear plant operator in the U.S., will also become the biggest independent power provider in the country.
Together, Constellation and Calpine will boast nearly 60 GW of capacity from zero- and low-emission sources, encompassing nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration, and battery storage. The merged company will have a footprint across the continental U.S., with a notably larger presence in Texas, the fastest-growing market for power demand.
Constellation said that the transaction is expected to immediately increase adjusted operating earnings per share by more than 20% in 2026, contribute at least $2 per share in EPS accretion in subsequent years, and generate over $2 billion in annual non-GAAP free cash flow. Analysts point out that the appealing purchase price underpins the forecasted earnings accretion: “With a net purchase price of $26.6B - which includes Calpine's net debt, the expected cash generated by Calpine between the deal signing and the expected closing date, and the value of tax attributes at Calpine - Constellation is paying less than 8x Calpine's expected 2026 EBITDA.”
How Did CEG Perform in Q3?
Constellation Energy announced its financial results for the third quarter of fiscal 2024 on Nov. 4. Its operating revenues grew 7.2% year-over-year to $6.55 billion, beating expectations by $1.96 billion. CEG also reported adjusted operating earnings of $2.74 per share, surpassing both its guidance and analysts’ expectations by a significant margin.
Meanwhile, the company has a robust balance sheet, holding an investment grade rating of BBB+. The balance sheet features a leverage ratio near 2.0x and a well-structured maturity profile.
The company’s outstanding quarterly performance prompted it to boost its full-year guidance. As a result, management narrowed its adjusted operating earnings forecast to $8.00 to $8.40 per share, which is about $0.60 higher than the original midpoint.
What’s particularly noteworthy is the company’s commitment to achieving at least 13% annual base earnings growth through 2030. This growth is expected to be driven by the rising demand for reliable, carbon-free power.
An important highlight from the third quarter was the company’s signing of a 20-year PPA with Microsoft (MSFT), which will facilitate the restart of Three Mile Island Unit 1, now called the Crane Clean Energy Center, previously retired in 2019 for economic reasons. Under the agreement, Microsoft will buy the energy produced by the renewed plant to support its goal of powering its data centers in PJM with clean energy.
CEG Valuation, Dividend, and Analysts’ Estimates
According to Wall Street estimates, CEG is expected to post a 58.22% year-over-year adjusted EPS growth to $8.45 in FY24. At the same time, analysts anticipate a 9.25% year-over-year drop in the company’s operating revenues to $22.61 billion.
On the dividend side, CEG’s annualized dividend of $1.41 per share translates to a forward yield of 0.49%, well below the sector median of 3.88%. However, the company’s payout ratio stands at only 17.28%, indicating substantial room for future dividend growth.
In terms of valuation, CEG’s forward EV/EBITDA multiple is 22.42x, reflecting a 105.18% premium over the sector median. The stock also trades at a rich forward P/E ratio (Non-GAAP) of 36.13x. With that, the valuation is high for a utility, even a nuclear one, which could limit its near-term upside potential.
What Do Analysts Expect for CEG Stock?
Constellation Energy stock has a consensus “Moderate Buy” rating. Among the 17 analysts covering the stock, 11 recommend a “Strong Buy” and six assign a “Hold” rating. CEG trades at a premium to its mean price target of $281.38, with just 14% upside potential to the Street-high target of $348.00.
