Artificial Intelligence (AI) Is Driving a New Wave of Infrastructure Spending. This Stock Is Key.

Most of the investment talk about artificial intelligence (AI) infrastructure is focused on semiconductor chips for high-end computer servers or the data centers that will house those servers. I think the bigger AI infrastructure need is more indirectly tied to computers.

I'm talking about energy.

AI is an absolute glutton for electrons. The Guardian reported in August last year that OpenAI's latest model GPT-5 potentially consumes in one day enough energy to power 1.5 million American homes for a day. And those power needs are growing. MIT Technology Review reports that by 2028, AI alone could consume as much electricity annually as 22% of all U.S. households.

Image source: Getty Images.

It's a serious infrastructure problem, as we would like to meet those electrical needs without producing vast amounts of pollution. One solution is nuclear power.

The technology industry is well aware of that, which is why Constellation Energy (NASDAQ: CEG), America's largest carbon-free energy producer, has partnered with Microsoft (NASDAQ: MSFT) to resurrect a nuclear plant in Pennsylvania for the express purpose of powering data centers.

Atomic AI

Based in Baltimore, Maryland, Constellation is not only America's largest green energy producer -- it's the country's largest producer of nuclear energy as well. So it made for an obvious partner for Microsoft in its bid to power its data centers with as little pollution generated as possible.

Nuclear is efficient and comparatively clean, and can generate immense amounts of power. That's what makes it so great for data center use. The Crane Clean Energy Center that it's partnered with Microsoft on should produce 835 megawatts of power at capacity for decades to come.

And Constellation is already reaping the benefits of the increase in demand for electricity driven by data centers. Based on the company's year-end 2024 base, it is anticipating an earnings per share (EPS) compound annual growth rate (CAGR) of 10% through to 2028.

I don't think Constellation will deliver the sort of explosive growth you'll see in many other AI-related stocks over the next few years, but it will provide steady growth and add some stability to your AI portfolio.

Constellation achieved a revenue CAGR of 6.75% over the past five years, it operates at a net income margin of 11%, and its levered free cash flow margin is sitting at 12.3%. To further emphasize that Constellation is a slow and steady growth stock to add security to your AI portfolio, it pays a dividend that yields 0.46% at current prices, and it has grown that dividend in each of the past three years running.

Why invest in Constellation?

Adding a nuclear power stock like Constellation to your AI portfolio can add stability. Energy is a critical part of AI infrastructure that often gets overlooked.

And as far as a safe stock to park your money in goes, Constellation is no slouch. It has beaten the S&P 500 (SNPINDEX: ^GSPC) over the past 12 months, 33% to 17%.

Finally, to cap all of this off, the U.S. government also thinks that nuclear will be vital moving forward, and the Department of Energy has set a goal to triple the country's nuclear output by 2050.

Constellation, as America's largest nuclear energy provider, is likely to benefit from government investment in America's atomic output. So if you're looking to add some stability to your AI portfolio, go stargazing and look at Constellation.

James Hires has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy 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.