In short: "A safer way to play nuclear" — a large, profitable utility with a reactor fleet — but it has become unusually popular for a staid sector: Citigroup puts it on its list of the most "crowded" utility stocks.
Constellation is a big, profitable power company that owns a large fleet of existing nuclear plants. Jakab calls companies like it the "safer" way to invest in nuclear: instead of betting on reactor designs that may take years to make money, you own plants that already sell electricity today — the kind tech giants want for AI data centers.
The catch is popularity. Utilities are normally sleepy stocks, but this one has attracted so many investors that Citigroup lists it among the most "crowded" utility stocks — when everyone owns the same thing, there are fewer new buyers left and more people ready to sell on bad news. So: a sound business, but not an overlooked one.
In short: Named first among the losers: the political backlash "has hurt stocks of companies that produce electricity for data centers, like power plant owners Constellation Energy and NRG." Same category as the Aug 19 Pennsylvania read on Talen/Vistra/PSEG — an owner of existing generation whose data-center contracting story is what the approval pause suspends.
Constellation owns power plants and had been selling — or hoping to sell — their output to new data centers at premium prices. That is the business the backlash suspends. If governors will not approve the data center, the contract to supply it never gets signed, and the stock gives back the value the market had already attached to those future deals.
This is the same loss described in the Pennsylvania piece five days earlier, where Talen, Vistra and PSEG were the named losers: the plant keeps running and keeps selling into the market, but the option on a specialised, high-priced data-center contract is what disappears. In this article Constellation is named as the illustration of the damage rather than analysed on its own — the point of the piece is who benefits from that damage.
In short: The nuclear/firm-power leg of the physical-buildout cluster among Q2 top buys — the purest listed way to own the electricity constraint on the data-centre buildout.
In short: The episode's most surprising negative. Verrone: regulated utilities "have traded poorly all year… as a group they're making new lows here. The unregulated ones, the more power producers, the CEGs and the Talons and the Vistra's have also started to weaken here." The diagnosis is political, not fundamental: "the politics are starting to consume the utility sector… cuz the unregulated [names] what you would expect to be great in this environment are really starting to weaken."
Constellation is an unregulated power producer — it owns generation (a great deal of it nuclear) and sells electricity at market prices rather than at rates a regulator sets. In a world of exploding data-centre electricity demand, this is supposed to be the ideal business, and for two years it traded like it.
Verrone's observation is that it has stopped working, and that is the episode's most useful negative precisely because it contradicts the obvious thesis. Regulated utilities have traded badly all year and are making new lows; now the unregulated producers "have also started to weaken." Trennert's explanation is political rather than economic: as data centres bid up power prices, voters notice their own bills, and "the politics are starting to consume the utility sector."
The transferable rule: when the names that should be great in an environment start underperforming anyway, something outside the fundamentals is setting the price — here, the risk that the profits get regulated or taxed away.
39:57You take the utilities for example. Yes. Regulated utilities have traded poorly all year. They continue to trade poorly. I think as a group they're making new lows here. The unregulated ones, the more power producers, the CEGs and the Talons and the Vistra's have also started to weaken here.
In short: The valuation yardstick, named twice and given no call of its own. In the Valuation section: at ~$141 and 10.6× 2026 adjusted EBITDA on an enterprise-value basis, "Vistra trades at a meaningful discount to Constellation Energy at approximately 14.5 times earnings (P/E). This is despite Vistra's multiple being calculated on forward guidance that explicitly excludes Cogentrix, the Meta PPAs, and Helix." Restated in the close on a like-for-like measure: "Vistra at 10.6x forward EV/EBITDA on conservative guidance versus Constellation Energy at 13.6x trailing EV/EBITDA, with VST's multiple calculated before Cogentrix, the Meta PPAs, and Helix contribute a single dollar." No view is taken on CEG's shares — the other large competitive nuclear operator is used to establish that the discount is intra-sector rather than a sector de-rating.
Constellation is the other big American company that owns a fleet of nuclear plants and sells the power at market prices — the closest thing Vistra has to a twin. Hay uses it purely as a measuring stick: Constellation trades at roughly 13.6 times its cash earnings while Vistra trades at 10.6 times, and Vistra's figure is calculated on a forecast that deliberately leaves out its acquisition, its Meta contracts and the Helix venture.
The point of the comparison is to establish what kind of discount this is. If the whole sector were being marked down, a cheap multiple would tell you nothing. Because the nearest comparable company trades a third higher on the same measure, Hay can argue the gap is specific to Vistra — and specifically to the misleading revenue headline — rather than a judgement on independent nuclear power generally. He expresses no opinion on whether Constellation shares themselves are worth owning.
In short: Named by the host as one of the behind-the-meter names "people hear all the time," setting up the question the brothers answer: why they own micro-caps nobody else has instead of the mainstream power complex. No view expressed on Constellation itself.
12:43Yes. — Okay. So bring your own energy. Dean, Dea, I associate with bring your own energy names like Bloom Energy, names like Constellation Energy, GE Vernova, many names that people, if they listen to other financial podcasts or television programs, will hear all the time.
In short: The recommendation — buy up to $320 (~$289 now, ~11% upside). Largest US producer of carbon-free electricity: ~21 GW nuclear (94.7% capacity factor) plus the closed $26.6B Calpine deal (~26 GW gas + The Geysers, world's largest geothermal complex → largest geothermal operator in N. America; +$2B annual FCF). 20-yr hyperscaler PPAs (Microsoft/Crane-TMI 835MW, Meta/Clinton 1,121MW, CyrusOne/Freestone 380MW). FY26 guide $11-12 EPS, 20%+ base growth 2026-29, $5B buyback + 10% dividend growth. Risk: the Crane nuclear restart clearing NRC/FERC/PJM by 2027.
Constellation owns power plants and sells the electricity they make. The pitch rests on one idea: AI data centers need firm power — electricity available 24/7, on demand — and that's exactly what Constellation's fleet produces. "Capacity factor" is the share of the time a plant actually runs at full output: solar manages ~25% and wind ~35% (they stop when the sun sets or the wind drops), but Constellation's nuclear plants run ~95% of the time. After buying Calpine, it now also owns the largest US gas fleet and The Geysers — the world's biggest cluster of geothermal plants (heat pulled from underground), which run nearly as steadily as nuclear. So it's the rare utility that can promise a hyperscaler power that essentially never stops.
The clever part is how it sells that power: 20-year "power purchase agreements" (PPAs) with Microsoft, Meta and CyrusOne. A PPA is a long contract locking in who buys the electricity and at what price — turning what would be volatile, market-priced ("merchant") revenue into something closer to a 20-year annuity. That contracted, predictable cash flow is why Prins argues Wall Street hasn't fully repriced the stock. The numbers behind it: ~$11B in quarterly revenue, guidance for 20%+ annual earnings growth through 2029, a $5 billion buyback and 10% dividend growth.
The catch — and the reason it's a "buy up to $320" with conditions rather than at any price — is the Crane restart. Constellation is reopening the undamaged Three Mile Island reactor (rebranded "Crane") to fulfil the Microsoft contract, and that restart needs sign-off from three regulators (the NRC for safety, FERC and PJM for grid connection, the last of which PJM's own market monitor is fighting). If it slips past 2027, the Microsoft revenue gets pushed out and the stock's premium shrinks. So: a high-quality, contracted, firm-power compounder, priced for an upside that depends on a regulatory catalyst landing on schedule.
In short: Same hot-money power trade — wait for the washout rather than chase it here.
Constellation Energy is a nuclear-heavy power company, another crowded data-center-power trade. Same caution as Vistra: likely to drop hard in a selloff before it becomes a wishlist buy.
19:37You're bullish on infrastructure like Eaton and GE Vernova. If the consumption spike hasn't shown up yet, are these early? Well, there are three risks — NIMBY, getting the infrastructure into the location, and power. So I think you get a really good opportunity to buy the GE Vernova situations. A lot of these are really rich right now. But once this happens, a lot of the hot-money plays like the Vistras, the Constellations are going to get really hammered, and you want to create that wish list for '26.
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