Why Constellation Energy Stock Slumped in March

Constellation Energy (NASDAQ: CEG) stock is treading on soft ground. It fell 15.3% in March and is down another 4% this month as of this writing, according to data provided by S&P Global Market Intelligence. Important recent updates, including a potential delay in a major project and conservative guidance, took the wind out of its sails.

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Here's why Constellation Energy stock is falling

Constellation Energy is the largest producer of electricity in the U.S. as well as the nation's largest producer of clean energy. It operates the largest nuclear fleet in the U.S., placing it in an unbeatable position to benefit from the massive power demands of artificial intelligence (AI) data centers.

The AI narrative, however, began to cool off in March amid geopolitical tensions that saw money rotate out of growth stocks and into defensive plays. Even though Constellation is a utility, the stock surged 58% in 2025 because of the company's nuclear energy dominance amid the data center boom.

In March, the February Consumer Price Index (CPI) report also surprisingly revealed a marginal decline in the month-over-month electricity prices. Although seasonal, the price drop hit utility stocks across the board.

Constellation Energy beat analysts' estimates when it reported its fourth-quarter numbers in late February, but it didn't announce its 2026 and medium-term outlook until March 31. When it did, the stock fell, because Constellation's 2026 operating earnings guidance of $11.50 per share at the midpoint fell short of the consensus earnings of $11.78 per share.

There's an even bigger reason why Constellation shares are falling further in April.

What should you do with Constellation stock now?

Constellation's latest April filing with the Federal Energy Regulatory Commission (FERC) has warned investors that its plans to restart a reactor at its Three Mile Island power plant, rebranded as Crane ​Clean Energy Center, could be delayed.

Constellation aims to restart the plant by 2027 to meet its contractual commitment to supply electricity to Microsoft (NASDAQ: MSFT) data centers. In its filing, Constellation noted how significant delays in several power transmission projects mean the plant might not be fully connected to the grid "at least until the end of 2030". Constellation is, therefore, seeking a waiver from the FERC to connect its plant to the grid elsewhere without waiting for the completion of the transmission projects.

The 20-year Microsoft deal, signed in late 2024, was one of the main drivers of Constellation's share price surge. A potential delay has shaken investor confidence in Constellation, as much of that projected growth was already baked into the stock price.

So what you shoud you do? I believe Constellation is one of the best nuclear stocks to buy on the dip. The massive AI data center power demand isn't going anywhere. It's just a timing risk, not a demand problem. Constellation also has other big power supply contracts, and its recent $16.4 billion cash-and-stock acquisition of Calpine has added significant natural gas and geothermal assets to its portfolio. Constellation is also a dividend growth stock and has just boosted its share buyback program to $5 billion.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy and Microsoft. The Motley Fool has a disclosure policy.