Constellation Energy is betting big on nuclear power to fuel the AI boom, but transmission delays and a lack of new data center contracts are testing investor patience. The company's stock has tumbled 26.3% over the past six months, falling below key technical benchmarks, even as the broader alternative energy sector rallied 4.8%. The core issue: the 835-megawatt Three Mile Island facility, which the company plans to restart, faces delays in transmission project completion that could push back when it actually comes online to power data centers hungry for electricity.

What's Holding Back Constellation Energy's Data Center Expansion?

The timing matters enormously in the AI infrastructure race. Hyperscalers like Microsoft, Google, and Amazon are scrambling to secure reliable power sources for their data centers, and nuclear energy has emerged as a clean, high-capacity solution. Constellation Energy's nuclear fleet delivered an impressive 92.3% capacity factor in the first quarter of 2026, meaning its reactors ran at near-maximum efficiency. That's the kind of reliability data centers need. Yet without transmission infrastructure in place to move that power from Three Mile Island to where it's needed, the company can't capitalize on surging demand.

The absence of new large-scale data center agreements has compounded the problem, dampening investor sentiment at a critical moment. While the company's long-term fundamentals remain strong, the near-term uncertainty has created a valuation disconnect. Constellation Energy is trading at a forward price-to-earnings ratio of 21.06 times, slightly below its industry average of 21.38 times, suggesting the market is pricing in some skepticism about near-term growth.

How Is Constellation Energy Positioning Itself for Long-Term AI Power Demand?

• Nuclear Fleet Expansion: The company operates an extensive nuclear portfolio that generated a 92.3% capacity factor in Q1 2026, providing the reliable, zero-carbon baseload power that AI data centers require.
• Strategic Acquisitions: Constellation Energy completed the Calpine acquisition, which strengthens its presence in competitive power markets and adds efficient gas-fired assets to complement its nuclear-led clean-energy platform.
• Renewable Integration: Beyond nuclear, the company is expanding its renewable portfolio through wind and solar projects, with its Constellation Offsite Renewables program helping businesses procure energy from off-site renewable facilities.
• Capital Investment: The company plans to invest nearly $5.7 billion in 2026 and $4.7 billion in 2027, including nuclear fuel purchases and growth investments for uprates, renewals, and plant upgrades.

Despite the current stock weakness, Constellation Energy's earnings outlook remains robust. The Zacks Consensus Estimate projects year-over-year earnings per share growth of 24.92% in 2026 and 16.85% in 2027. That growth trajectory reflects confidence that the company will eventually capture the AI-driven electricity demand surge, even if the timing of specific data center contracts remains uncertain.

What Risks Could Derail Constellation Energy's AI Data Center Strategy?

The company faces several headwinds that could extend the current weakness. Operational and regulatory risks associated with its extensive nuclear generation portfolio include unplanned outages, maintenance requirements, fuel-supply challenges, and potential policy changes. The Calpine acquisition has also added debt and integration complexity, while uncertainty surrounding the future of nuclear tax credits and wholesale power market dynamics could affect profitability.

Weather conditions and fluctuations in wholesale power and fuel markets also influence earnings, as does the growing adoption of customer-owned energy solutions that may temper long-term demand growth. For investors, the key question is whether the company can complete the Three Mile Island transmission project and secure new data center agreements before the market loses patience with the stock's underperformance.

Constellation Energy is committed to returning cash to shareholders through disciplined capital allocation. Since becoming an independent company, the firm has raised its dividend by 150% and continues to target annual dividend growth of approximately 10%. The current quarterly dividend of 42.65 cents per share, or $1.71 annualized, provides investors with steady income alongside reinvestment and share repurchase benefits. Since 2023, the board has authorized up to $3 billion in repurchases, with $593 million still available as of December 31, 2025. Following the stock's first-quarter decline, management repurchased roughly 1.2 million shares at an average price of about $285 per share, totaling $335 million, demonstrating confidence in the company's long-term fundamentals.

The broader context is clear: AI data centers are reshaping the power industry, and companies that can deliver reliable, clean electricity at scale will win. Constellation Energy has the assets and strategy to be a major player. The question is whether transmission delays and contract timing will test investor patience before the company's long-term thesis plays out.