Wall Street was buzzing Tuesday after Meta (META) announced a 20-year agreement with Constellation Energy (CEG), a major vote of confidence in the future of nuclear power.
The deal will help bring Illinois’ Clinton Clean Energy Center back online, which was previously at risk of shutting down due to lack of power demand.
“We’re proud to partner with Meta,” said Constellation CEO Joe Dominguez in a statement. “They’ve figured out that supporting the relicensing and expansion of existing plants is just as impactful as finding new sources of energy.”
This is Constellation’s second big win in tech. Last September, the company signed a similar agreement with Microsoft to reopen the Three Mile Island reactor in Pennsylvania.
But while the deals illustrate the urgent need for sustainable energy to power AI, analysts are split on whether this signals a lasting tailwind for nuclear stocks.
How profitable are these deals?
Travis Miller, energy strategist at Morningstar, told the Schwab Network he’s watching the numbers closely.
“This is not necessarily a great thing on profitability — it’s a great thing in terms of the demand out there,” he said. “The big question for investors is how profitable these contracts are, and how much they add to the value of the company.”
That uncertainty may explain why CEG shares, which initially surged as much as 12%, ended the session flat. Meta shares also closed unchanged.
Part of the problem is that details of the deal remain scarce.
Rodney Rebello of Reaves Asset Management told Barron’s he expects Meta to pay around $85–$90 per megawatt-hour. But Georgetown professor Safak Yucel put that estimate closer to $45.
Jed Dorsheimer, who leads energy and power tech research at William Blair, offered a different take. Speaking to CNBC, he said the Meta deal could match the $100/MWh rate seen in Constellation’s PPA with Microsoft.
“I think you’re going to start to see more of these deals,” Dorsheimer said. “We’re going to see a lot more talk about nuclear and see tech signing these types of deals to fund AI.”
He also noted that Meta’s involvement may help offset the pending expiration of government tax credits in 2027 that are currently propping up Clinton’s operations. Constellation says the Meta deal will help preserve 1,100 jobs.
Morningstar's Miller isn’t buying into that bullish thesis.
“We’re very bearish on all the big nuclear stocks,” Miller said, naming Constellation, Vistra (VST), Talen Energy (TLN), and NRG Energy (NRG) as potentially overvalued.
“The market is way overpriced,” he added. “These contracts, as large as they are, might not be nearly as profitable as contracts we’ve seen in the past.”
For now, nuclear may be back in the spotlight, but not every analyst believes it will last.
Your email address will not be published. Required fields are markedmarked