What Is One of the Best Energy Stocks to Buy Right Now?
Key Points
Constellation Energy is the largest producer of carbon-free electricity in the U.S.
It has about 22 GW of nuclear power capacity, and its acquisition of Calpine could add about 25 GW of gas capacity.
- 10 stocks we like better than Constellation Energy ›
Big tech has a big issue: Its data centers consume colossal amounts of power, and not all of it is clean.
Electricity demand in the U.S. is expected to grow about 25% by 2030, from 2023 levels, and 78% by 2050.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Enter Constellation Energy (NASDAQ: CEG). As the country's largest producer of carbon-free electricity, as well as its biggest provider of nuclear power, Constellation is at the center of solving this big-tech issue. The company's stock is up over 48% so far this year, and by the looks of it, it could be poised for more growth ahead. It's one of the best energy stocks bo buy right now.
Image source: Getty Images.
The bull case for Constellation Energy
When you think of utilities stocks, you may think of slow growth and dividends. But Constellation is anything but normal.
Unlike most utility companies, Constellation Energy isn't regulated. That means it sells power at market price rather than fixed, government-approved rates. When demand for electricity is high, Constellation can benefit directly. And right now, demand is booming.
Better yet, demand for clean energy is booming, which is Constellation's bread and butter. The company owns the country's largest carbon-free fleet, mostly nuclear. That has helped it lock into strategic supply agreements with big tech companies like Meta Platforms and Microsoft.
Most of Constellation's carbon-free power comes from its nuclear facililites, which has about 22.2 gigawatts of capacity. That makes Constellation not only the leader in nuclear capacity in the U.S., but also positions it nicely to profit from the AI boom, as data centers need reliable, 24/7 power.
The company's recent $26.6 billion acquisition of Calpine could also add about 25 GW of gas capacity. Management expects the deal to add about $2 billion in free cash flow per year.
Is it a buy now?
That said, Constellation trades at about 32 times forward earnings estimates, or roughly double the average multiple for the energy sector. For investors betting on the next decade of energy growth, however, it's hard to find a better energy stock to plug into.
Should you invest $1,000 in Constellation Energy right now?
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Steven Porrello has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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