Constellation Energy Jumps 13% as Google Signs 20-Year, 890 MW Nuclear Deal

Google and Constellation Energy announced on Oct. 6 a 20-year power purchase agreement covering 890 megawatts of new nuclear capacity, to be added through uprates at 11 Constellation-owned reactor units in Illinois, Pennsylvania and New Jersey, with the first uprate expected by 2028. A separate 15-year agreement covers another 2,700 MW from Constellation's existing fleet, bringing the total Google has contracted to 3,590 MW, all on the PJM grid that serves 67 million people in 13 states. MarketWatch described the new output as equal to the power of a new nuclear reactor.

CEG traded at $302.03, up 12.86% from Monday's $267.62 close, in the first hour of trading, a move worth about $12 billion in market value, and was near $304.71 late in the morning. Part of the move came before the 6:30 a.m. ET release, after Bloomberg reported that the two companies were close to a deal worth $1 billion or more. Some headlines described the result as a "$4.3 billion deal", but that figure is Constellation's own planned investment of more than $4.3 billion in the uprates, not the contract's value. Neither company disclosed the price Google pays for the power.

The agreement also runs the other way: Constellation picked Google Cloud and Gemini Enterprise under an expanded five-year technology alliance. For GOOGL, two decades of firm, low-carbon supply are a cost of running AI data centers rather than a material line item, and Alphabet shares barely moved.

The open question is economics. At roughly 29 times trailing earnings of $10.26 a share, Constellation now prices in contracts whose margins are not public, and none of their earnings are in reported results yet. Watch for management to quantify revenue or outlook changes at the third-quarter report, and for Nuclear Regulatory Commission approval of the uprates, since the release gives no completion date.