Google and Amazon Bet Big on Nuclear Power with 20-Year Constellation Deals

Alphabet Inc. (GOOGL) has signed a 20-year agreement with Constellation Energy Corp. (CEG) to add 890 megawatts of new nuclear capacity to the PJM Interconnection grid. This follows a similar 20-year deal signed by Amazon.com Inc. (AMZN) six days earlier, adding 190 megawatts. Together, these contracts fund 1,080 megawatts of new power, addressing about 16% of the grid's identified shortfall. Constellation's shares surged 8.4% to $289.98 in premarket trading, although they remain down 17.9% for the year.

The deals rely on so-called uprates, which involve upgrading existing reactors to produce more electricity. Amazon's agreement covers 690 megawatts from the Calvert Cliffs Clean Energy Center, including a 190-megawatt uprate due between 2030 and 2032. Google's deal is larger, funding uprates at 11 reactors in Illinois, Pennsylvania, and New Jersey, with the first expected by 2028. The program represents more than $4.3 billion of new investment.

Despite the positive developments, Constellation's stock trades 29.7% below its 52-week high of $412.70. The delay in bringing new power online, Google's first uprate arrives in 2028, Amazon's as late as 2032, may be contributing to investor hesitation. Additionally, the restarted Three Mile Island reactor may not reconnect until 2031, further extending the timeline.

Constellation's peers also saw gains in premarket trading, with Vistra Corp. (VST) up 4.39%, Talen Energy Corp. (TLN) up 4.11%, and NuScale Power Corp. (SMR) up 2.99%. The VanEck Uranium and Nuclear ETF (NLR) gained 2.43%. Analysts maintain an Overweight consensus rating for Constellation, with an average price target of $349, implying about 20% upside from the premarket price.