Better Energy Play: NextEra vs. Constellation Energy

As electricity demand surges amid AI data center growth, two utility companies stand out. NextEra Energy (NYSE: NEE) and Constellation Energy (NASDAQ: CEG) are both incredibly strong businesses, but are taking different approaches to this new chapter in North American power.

NextEra is both a traditional utility provider and a powerhouse in renewable energy. It is planning to spend $94 billion through 2030 in an aggressive push to build out its footprint. In May, the energy giant announced an all-stock agreement to acquire Dominion Energy. This deal will make NextEra the world's largest utility business, but the megamerger is facing intense regulatory scrutiny.

The company's dividend yield is holding strong at over 3%. The stock has risen just 2% this year. NextEra is a reliable income producer, but could see substantial growth through the early 2030s.

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Constellation's approach is completely different from NextEra's. Constellation is the largest nuclear power operator in the U.S. It's also an independent power producer, meaning it sells electricity on the open market and not through a regulated utility model. This gives it greater pricing volatility, but potentially more upside.

Constellation is also a favorite among hyperscalers, including Meta Platforms and Microsoft. Its dividend yield is considerably less than NextEra's, but the earnings projections are higher.

Constellation's stock has declined significantly in 2026, falling over 20%. This has created a compelling entry point for investors. Much of the stock's downward trend is due to softer profit guidance and investor nervousness regarding the company's expensive acquisition of Calpine Corporation, which added short-term costs and debt to the balance sheet.

Which stock is better?

The better play right now depends heavily on the investor's risk tolerance. NextEra, with its regulated utility business, offers greater stability and income, thus lower risk. There's still upside potential as it grows its renewables arm, however. Constellation arguably has more growth potential, though, as it's even more closely tied to the AI boom. With that comes more volatility and risk. Both stocks have a lot going for them and serve a different purpose within a portfolio.

Catie Hogan has positions in NextEra Energy. The Motley Fool has positions in and recommends Constellation Energy, Meta Platforms, Microsoft, and NextEra Energy. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy.