Nuclear stocks "darling" start the year strong: Constellation surges nearly 8% against the market, officially announces signing a government contract worth over $1 billion

The "darling" of U.S. nuclear stocks continued its strong momentum from last year in 2025. After announcing a major deal with U.S. government agencies, Constellation Energy Corp., the largest nuclear reactor operator in the U.S., saw its stock price surge against the market trend.

On Thursday, January 2, Eastern Time, the three major U.S. stock indices fell on the first trading day of 2025. The Nasdaq, which had risen more than 1% in early trading, dropped 1% at midday. However, Constellation Energy (CEG), listed on Nasdaq, opened high and maintained its upward trend, closing nearly 8% higher, poised to rebound to its highest closing level since December 6, erasing nearly a month of losses.

Before the stock price surge, Constellation Energy announced earlier on Thursday that it had signed a power supply contract worth over $1 billion with the General Services Administration (GSA), the government agency responsible for the logistics support of U.S. federal government operations. These contracts involve Constellation Energy supplying power to over 13 federal government agencies and implementing energy-saving initiatives at five GSA-owned facilities in the capital region, specifically Washington, D.C.

Specifically, Constellation Energy signed a ten-year contract worth $840 million with the GSA, the highest-value agreement in GSA history. Starting in 2025, the company will supply over 1 million megawatt-hours of electricity annually, part of which will come from capacity upgrades funded by Constellation, referred to as "upgrades." Constellation Energy will provide energy to multiple federal agencies in Illinois, Maryland, New Jersey, Pennsylvania, and Ohio, including the GSA, Social Security Administration, and Department of Veterans Affairs.

In addition, Constellation Energy also secured a contract worth $172 million to improve energy efficiency at five GSA-owned facilities in the capital region through LED lighting, HVAC upgrades, and converting four buildings in Washington, D.C. from steam heating to electric heating. The related project engineering will start this month and last for 42 months, during which Constellation Energy will provide maintenance and training to ensure long-term energy efficiency and cost savings.

Joe Dominguez, President and CEO of Constellation Energy, stated that under the agreement, the U.S. government will support continued investment in reliable nuclear energy alongside Microsoft and other entities, enabling Constellation to reauthorize and extend the lifespan of these critical assets. Combined with the restart plan for the Crane Clean Energy Center, formerly known as the Three Mile Island Nuclear Power Plant, Constellation Energy and its partners will increase supply by approximately 1,100 megawatts of round-the-clock clean energy by 2028, enough to power over one million households Some comments suggest that the additional power generation from the above plan is roughly equivalent to adding a brand new reactor. The agreement reached by Constellation Energy indicates a growing demand for the clean energy provided by nuclear power plants, which will bring funding to Constellation Energy, upgrade its units, and increase reactor installed capacity by approximately 135 megawatts.

Wallstreetcn mentioned that tech giants are striving to meet the increasing electricity demand from artificial intelligence (AI) technologies and their applications. In 2024, the driving force behind Constellation Energy making headlines will be the electricity demand from these giants. In September 2024, Microsoft signed a 20-year power purchase agreement with Constellation Energy—the Three Mile Agreement—to restart the Three Mile Island nuclear power plant, selling all generated power to Microsoft.

This agreement from Microsoft has revealed the enormous potential for clean energy demand, as the increasing electricity needs of data centers and other large energy consumers may lead to a sustained growth in the demand for nuclear energy as a stable and low-carbon energy option. The restart of the Three Mile Island nuclear power plant could incentivize the optimization and expansion of the nuclear energy supply chain, including uranium mining, nuclear fuel processing, and the construction and maintenance of nuclear reactors