Google Deal Ignites Nuclear and Power Stock Rally
Google's recent power deal with Constellation Energy (CEG) has sent shockwaves through the nuclear and power sectors, triggering a rally in related stocks. On Tuesday, Google agreed to two contracts totaling about 3,590 megawatts, prompting significant gains for Constellation, Vistra (VST), and Talen Energy (TLN). Constellation shares surged as much as 15%, while Vistra and Talen saw increases of about 10% and 11%, respectively. Other stocks benefiting from the news include Oklo (OKLO), NANO Nuclear Energy (NNE), NuScale Power (SMR), and fuel-cell names like Bloom Energy (BE) and FuelCell Energy (FCEL).
The first contract is a 20-year power-purchase agreement that will fund upgrades at 11 Constellation reactors in Illinois, Pennsylvania, and New Jersey. These upgrades aim to add 890 megawatts of firm, carbon-free power to the PJM grid by the end of 2032. The second contract is a 15-year supply agreement covering another 2,700 megawatts, though not tied to a specific plant or fuel. Together, the deals represent a significant investment in nuclear power and grid capacity.
The rally in peer stocks like Vistra and Talen is attributed to the broader market signal that Google's commitment to firm power supports the entire sector. Data-center demand is outpacing new power lines, and the PJM grid is currently short of capacity. Investors see Google's long-term revenue commitment as a vote of confidence in nuclear and on-site power generation. Fuel-cell shares also rose as large customers' willingness to pay for reliable power increases the value of on-site generation.
Retail traders on Stocktwits displayed varied sentiment, with CEG, VST, and OKLO in 'extremely bullish' territory, while TLN, FCEL, and the VanEck uranium and nuclear ETF (NLR) were 'neutral.' Sentiment around BE, SMR, and NNE, however, was 'bearish.' The announcement follows a smaller Constellation contract with Amazon last week, further highlighting the growing demand for carbon-free power solutions.