S&P 500 nuclear stock Constellation Energy fell in afternoon trade on Wednesday after a report emerged that it's close to finalizing a deal for Calpine, a natural gas and geothermal power generator.
Constellation Energy is in discussions with Calpine's private-equity owners about a deal that could value the company at about $30 billion including debt, Bloomberg reported Wednesday. An agreement could be announced in the coming weeks, according to the report.
Calpine was taken private in 2017. There is no guarantee a deal will happen, and the final price could change, Bloomberg reports.
Calpine is one of the largest U.S. generators of electricity from natural gas and geothermal resources, with a fleet of 84 power plants in operation or under construction representing more than 27,000 megawatts of generation capacity, according to the private company.
Constellation Stock
CEG stock sank 4.6% to 243.84 in market trade on Wednesday, but shares are back above their 50-day line after diving to 228.05 intraday.
Constellation stock had moved higher to start 2025 after a 90%-plus gain in 2024, as the nuclear energy provider rode the artificial intelligence wave and the expected electricity demand surge from the data centers used to train AI models.
On Monday, CEG jumped 4.7% after climbing 4% Friday after the Treasury Department and Internal Revenue Service revised its rules for hydrogen production tax credits, allowing nuclear power providers to qualify.
The S&P 500 component also recently announced a 10-year, $840 million contract with the U.S. General Services Administration to supply power to facilities of more than 13 government agencies.
Constellation Energy has a 288.75 buy point, though investors could use Monday's high of 267.82 as an early entry.
$840 Million Government Contract For Nuclear Power 'Positive' For Future Deals
Analysts view natural gas as a key part of answering the power demand increase. In 2024, natural gas plants across the country likely increased their generation vs. 2023, as gas generation hit record levels with a roughly 8% rise over the previous year, according to a recent FactSet Insights report. Meanwhile, applications for gas-fired power plants more than doubled in 2024 compared with the previous year, according to FactSet.
Nuclear Energy Stocks Enter 2025 On A High. AI Data Centers Need Them, A Lot.
Among other nuclear-related utility plays, Vistra fell 1.6% to 160.81, working on a possible handle to a cup base. Talen Energy rebounded from a 50-day-line test to rise 1.4% Wednesday afternoon. TLN stock is working on a short consolidation.
Constellation Energy stock has an 88 Composite Rating out of 99. Additionally, the S&P 500 nuclear stock has an 89 Relative Strength Rating and a 55 EPS Rating out of 99.
Please follow Kit Norton on X @KitNorton for more coverage.
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