S&P 500 nuclear giant Constellation Energy announced Thursday it has been awarded a 10-year $840 million contract with the U.S. General Services Administration to supply power to facilities of more than 13 government agencies. Nuclear stocks CEG and Vistra soared Thursday.
The nearly $1 billion government contract begins in 2025 with Constellation Energy set to supply energy to the Federal Reserve System, the Social Security Administration and the Army Corps of Engineers among other facilities.
"We're demonstrating how the federal government can join major corporate clean-energy buyers in spurring new nuclear energy capacity," General Services Administration Administrator Robin Carnahan said in the press release.
Meanwhile, Constellation Chief Executive Joe Dominguez said the U.S. would join "Microsoft and other entities to support continued investment in reliable nuclear energy that will allow Constellation to relicense and extend the lives of these critical assets."
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Constellation Energy stock soared 8.5% to 242.60 in Thursday's market action. Vistra stock jumped 8.6% to 149.67, moving above its 50-day moving average. VST was a top performing S&P 500 component in 2024 on the strength of its 260% annual gain.
Talen Energy bounced off its 50-day line on Thursday, galloping 5.3% higher to 212.23.
Deals For S&P 500 Nuclear Stocks
The federal contract announced Thursday comes after Constellation Energy on Sept. 20 signed a two-decade contract with Microsoft to provide nuclear power for the tech giant's data centers. The deal pushed many nuclear stocks and related companies higher through the latter part of 2024.
In September and October, Amazon.com, Alphabet and Oracle also all announced decisions to invest in the developing small modular reactor nuclear technology.
In early December, Meta Platforms announced plans to have a $10 billion artificial intelligence data center built in northeast Louisiana. The project will be Meta's largest data center, according to the Facebook-parent. Prior to the deal, Meta published a request for proposals for nuclear energy developers to provide one to four gigawatts of new nuclear generation capacity by the early 2030s.
"We believe that nuclear energy can help provide firm, baseload power to support the growth needs of the electric grids that power both our data centers (the physical infrastructure on which Meta's platforms operate) as well as the communities around them," Meta said in a blog post.
AI And Nuclear Energy
Nuclear energy saw a comeback in 2024, with nuclear power and utility stocks running higher, fueled by the immense energy demand for artificial intelligence, and the data centers powerful enough to allow them to "train" themselves.
In the U.S., McKinsey & Co. projects that data center energy demand will grow from around 4% currently, as a percentage of total energy demand, to 11%-12% by 2030.
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Meanwhile, a Grid Strategies report released in early December pegs U.S. electricity demand growing around 16% in the next five years, with about 128 gigawatts of new capacity needed to come online by 2029. Grid Strategies previously predicted a 39-gigawatt demand increase.
Constellation Energy stock has an 81 Composite Rating out of 99. Additionally, the S&P 500 nuclear stock has an 84 Relative Strength Rating and its EPS Rating is 55 out of 99.
Please follow Kit Norton on X @KitNorton for more coverage.
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