Constellation Energy stock soars on Google's $4.3 billion nuclear power deal

Constellation Energy shares surged 14% following Google's massive power purchase agreement. The deal includes 3,590 MW of power from Constellation's reactors, with 890 MW coming from new nuclear capacity under a 20-year contract. This marks Constellation's second major long-term agreement with a tech giant in less than a week, following a similar deal with Amazon.

The agreement involves over $4.3 billion in upgrades across 11 reactors, with the first new capacity expected by 2028. Constellation plans to install new turbines, steam generators, and controls to boost output without constructing new reactors. CEO Joe Dominguez described the deal as a "model" for collaboration between tech companies and the energy industry.

Analysts anticipate a 76% increase in normalized earnings per share (EPS) from 2025 to 2028, supported by the long-term contracts. While shares have risen, they haven't fully recovered from recent declines. The stock's forward price-to-earnings (P/E) multiple has compressed over the past year, despite growing earnings.

Constellation now has two decades-long agreements with major tech firms, totaling about 1,080 MW of new nuclear capacity and over $7.3 billion in investments. The first test of these commitments will come by 2028 when the initial upgrades for Google are due.