AI Can't Thrive Without This Stock (Hint: It's Not Nvidia)
Constellation Energy (CEG) is emerging as a critical enabler of AI growth, distinct from semiconductor firms like Nvidia. As AI data centers demand massive power, CEG leverages its existing nuclear assets to meet this need. The company has secured major long-term power purchase agreements with Microsoft for the Three Mile Island restart and with Meta for the Clinton Clean Energy Center. Additionally, its Calpine unit signed agreements with CyrusOne for Texas data centers, positioning CEG as an immediate energy solution for the AI boom.
Whether you use large language models like OpenAI's ChatGPT or you're familiar with artificial intelligence (AI) tools like Siri from Apple and Copilot from Microsoft -- or you lean on AI found in various apps and platforms to complete everyday tasks, you're likely well aware of how dominant AI has become in our daily lives.
Most investors familiar with the burgeoning field of AI will point to semiconductor companies as pivotal to the industry's growth.
But investors who only recognize semiconductor stocks as AI investment opportunities are missing out. In fact, there's another stock that's critical for AI growth.
Image source: Getty Images.
Semiconductor stalwarts often steal the spotlight
It goes without saying that semiconductor specialist Nvidia attracts the attention of AI investors. The company's consistent innovation and development of chips -- specifically, graphics processing units (GPUs) -- used in data centers has played a vital role in the industry's accelerating growth.
Nvidia's not alone. Other semiconductor companies, such as Micron Technology, which designs memory and storage solutions, are also benefiting from the growth of the AI industry. The company's high-bandwidth memory products, for example, support faster inference and scaling of agentic AI workflows.
While these two companies receive the majority of attention, numerous companies are nipping at their heels. Investors may recognize some of these competitors, but one company is playing an equally -- if not more -- important role in the AI industry's growth, and it represents a different industry altogether.
AI is aiming for the stars with this energy company
Data center operators may use extraordinarily advanced GPUs to provide the computing infrastructure for AI applications, but it means little if there's inadequate power to keep the chips humming. That's where Constellation Energy (CEG +1.26%) come in.
NASDAQ: CEG
Key Data Points
AI computing demands significant amounts of power. To meet this demand, many data center operators are turning to nuclear energy companies, from advanced nuclear reactor companies to established nuclear energy leaders like Constellation Energy.
In 2024, Constellation Energy announced it plans to restart operations at Three Mile Island after signing a 20-year power purchase agreement with Microsoft, which will purchase energy from the nuclear plant to support its data centers in the region.
Building on its partnership with Microsoft, Constellation signed a 20-year power purchase agreement with Meta Platforms in June 2025 for nuclear power generated at the Clinton Clean Energy Center in Illinois. Operations at the nuclear facility are expected to resume in 2027, at which point Meta will use the power to support its AI data centers.
More recently, Constellation announced that its recently acquired unit, Calpine, signed a 380-megawatt (MW) agreement with CyrusOne, a leading global data center developer and operator, to connect and serve a new data center adjacent to the Freestone Energy Center, a natural gas power plant located in Texas. This complements a 400-MW power purchase agreement the two companies inked last year for a new data center CyrusOne is developing in Bosque County, Texas.
Constellation is benefiting now from AI power demand
Advanced nuclear reactor companies have gained interest among AI companies, but they require regulatory approval before they can commence operations. Constellation, conversely, doesn't have to wait. Its nuclear assets are ready to provide much-needed power to data center operators right now, making Constellation stock an alluring option for AI-focused investors.
