It’s a watershed moment in the history of the U.S. nuclear industry. Constellation Energy plans to restart the Three Mile Island nuclear plant, which is scheduled to resume operations in 2028 subject to approval by the Nuclear Regulatory Commission. Its stock jumped nearly 20% on the news. Microsoft’s deep pockets will breathe new life into the plant. The tech company signed a 20-year deal to buy clean energy from the plant to offset emissions from its artificial intelligence data centers. The Three Mile Island restart isn’t just a milestone for Constellation. It demonstrates the growing financial opportunity that nuclear power represents for utilities and their investors. Only one energy stock is hotter than Constellation right now. Shares of Vistra Corp. jumped more than 14% after the Three Mile Island announcement Friday. VST YTD mountain Vistra shares, YTD The Dallas-based utility is seen as a leading contender for an upcoming nuclear data center deal. Vistra leads the market Once an obscure name, Vistra shares have soared more than 175% this year, surpassing AI chip giant Nvidia to lead the entire S&P 500 on its data center opportunity. Vistra completed the acquisition of two nuclear plants in Ohio and one in Pennsylvania in March with its $3.4 billion purchase of Energy Harbor. The broader utilities sector has gained about 25% this year, largely due to the trend in data center demand. Investors can play that trend by buying independent power producers like Vistra, rather than regulated utilities, because they allocate power based on economics, according to Shahriar Pourreza, senior managing director of North America power and utilities at Guggenheim Securities. Jefferies began coverage of Vistra earlier this month with a buy rating, picking the company as its best-in-class power stock. Wall Street analysts have an average price target of $116.89 per share, implying a 26% upside from Thursday’s close of $92.52, according to FactSet data. “Vistra’s years of acquisitions, rationalizations and lessons learned about risk have positioned the company well for today’s energy markets,” Jefferies analysts led by Julien Dumoulin-Smith told clients in a note earlier this month. “Vistra’s timely acquisition of the Energy Harbor nuclear portfolio in 2023 gives the company a coveted nuclear portfolio,” analysts said. Vistra CEO Jim Burke told investors the company is having numerous conversations with customers about powering data centers directly with its plants and is “in due diligence on a number of sites.” Burke specifically pointed to Comanche Peak, a 2.4-gigawatt dual-reactor nuclear plant outside Fort Worth, Texas. “We’re seeing some interest in Comanche Peak,” Burke told analysts during the company’s second-quarter earnings call in August. Other power companies poised to benefit from growing data center demand for nuclear include NextEra Energy and Dominion Energy. NextEra CEO John Ketchum told investors in July that the company is considering restarting the Duane Arnold nuclear plant in Iowa. “There would be opportunity and strong market demand if we were able to do something with Duane Arnold,” Ketchum said on NextEra’s second-quarter earnings call. NextEra was up just 1.4% Friday, but has gained 37% year to date. The power company has the equivalent of a buy rating from 62% of Wall Street analysts, though its stock has largely caught up to the Street’s average price target of $83.94 per share, according to FactSet. Dominion Energy CEO Robert Blue told investors the company would consider building a data center next to the Millstone nuclear power plant in Waterford, Conn. Dominion has gained more than 22% this year, though nearly 80% of Wall Street analysts have put its stock on hold for now.
This Energy Company Has Overtaken Nvidia and Could Sign the Next Nuclear Deal After Three Mile Island
