Key Highlights

  • Constellation Energy shares closed at $300.40 on Tuesday, October 6, after touching an intraday high of $309.30.
  • The company signed a 20-year power purchase agreement with Google covering 3,590 megawatts, split between new reactor uprates and existing plant supply.
  • Constellation will invest more than $4.3 billion in the uprate program, with the first projects due by 2028.
  • The deal is Constellation's second 20-year agreement with a major technology company in a matter of days, following a 690-megawatt deal with Amazon on September 30.

Shares of Constellation Energy (NASDAQ:CEG) rocketed on Tuesday, October 6, after the nuclear plant operator signed a 20-year power purchase agreement with Alphabet's (NASDAQ:GOOGL) Google covering 3,590 megawatts of electricity. The stock closed at $300.40, up sharply on the day, after climbing as high as $309.30 during the session. Market data providers differed on the exact size of the gain, but every account placed it among the biggest moves in the S&P 500 that day.

The agreement has two parts. About 890 megawatts will be brand-new capacity created by uprates at 11 reactors in Illinois, Pennsylvania and New Jersey. An uprate is an upgrade to an existing reactor, such as new turbines or improved equipment, that lets it produce more power without building a new plant. The remaining roughly 2,700 megawatts will come from existing plants under a 15-year Supply arrangement.

Constellation said it will invest more than $4.3 billion in the program, with the first uprates due by 2028. The work is expected to create about 7,200 construction jobs.

Second Big-Tech Contract in a Week

The Google pact was Constellation's second 20-year deal with a technology giant in a matter of days. On September 30, Amazon (NASDAQ:AMZN) signed for 690 megawatts. Taken together, the two agreements underline how hungry the largest cloud and artificial-intelligence companies have become for steady, around-the-clock, carbon-free power to run their data centers.

Chief Executive Joe Dominguez framed the agreement as a template for the wider industry. "This long-term clean energy collaboration with Google can serve as a model for how technology companies and the energy industry can work together to responsibly develop the digital economy," he said.

Long-dated contracts of this kind matter to investors because they lock in Demand and pricing for years, turning a portion of a power producer's output into something closer to a predictable stream of revenue. Nuclear output, unlike solar and wind, does not depend on the weather, which helps explain its appeal to buyers such as Google.

Ripples Across the Market

The deal set off a broad rally in power and nuclear stocks. Vistra (NYSE:VST) and NRG Energy (NYSE:NRG) jumped, as did smaller nuclear names including Oklo (NYSE:OKLO), NuScale Power (NYSE:SMR) and Talen Energy (NASDAQ:TLN). Utilities were the strongest of the S&P 500's sectors on the day. Alphabet itself was little changed.

The wider market was buoyant. The S&P 500 rose 44.98 points to a record close of 7,818.93, and the Nasdaq Composite finished at a record just under 27,600. The Dow Jones Industrial Average added 253.38 points to 51,521.28, while the small-cap Russell 2000 slipped. Treasury yields eased, with the 10-year yield settling at about 5.28, and the VIX Volatility gauge drifted down to around 15.

A market strategist summed up the tone, noting that the rally was tech-led once again, with easing interest-rate uncertainty and a slight moderation in geopolitical risk allowing investors to focus on the strong Earnings growth coming from AI-related names.

Reactor Timeline Will Be the Next Test

Execution is the next test for Constellation. Investors will follow the uprate timetable, with the first projects due by 2028, and any regulatory approvals the work requires. Further deals between tech companies and nuclear operators would show whether the Google and Amazon contracts mark the start of a broader trend.