In June 2022, Meta Platforms (NASDAQ:META) struck a deal to purchase the clean energy attributes from Constellation Energy’s (NASDAQ:CEG) Clinton Clean Energy Center in Illinois for a span of 20 years. This agreement encompasses 1,121 megawatts of nuclear output, making it the largest AI power deal to date, surpassing Microsoft’s agreement for Three Mile Island’s 835 megawatts.
However, this contract will not take effect until June 2027. As a result, the current fiscal reports from Constellation, which have shown positive guidance after their second-quarter report last month, do not reflect any revenue from this major AI contract.
### Understanding Meta’s Purchase
Meta is acquiring the clean energy attributes to fulfill its promise of using 100% clean and renewable energy. Although the agreement allows for a significant increase in clean energy supply, it is timed to start after the Illinois zero-emission credit program ends, meaning the facility currently operates under existing funding.
### Upcoming Contracts
Besides Meta’s agreement, Constellation has a parallel 20-year deal with Microsoft, reliant on the Crane Clean Energy Center’s reinstatement. The facility is expected to restart operations in 2027. There are also 920 megawatts of new long-term contracts coming online from 2029 to 2032, including a partnership with Walmart.
### Financial Outlook
Constellation’s earnings are improving independently of the upcoming AI contracts. Their adjusted operating earnings reached $2.55 per share in Q2 2026, a 34% increase year over year, partly due to the acquisition of Calpine. The company has raised its full-year earnings guidance, anticipating $11.50 to $12.50 per share in 2026.
### Investment Considerations
Currently, shares of Constellation trade at around $299, with a premium valuation considering their expected growth. However, future growth depends on the execution of existing contracts.
Before investing, it’s worth noting that while growth is forecasted, guaranteed outcomes hinge on operational factors, including the success of starting new facilities. The earnings anticipated from these AI contracts will not materialize until mid-2027, and thus, the current financial growth is self-sustaining.
### Conclusion
For now, Constellation’s stock appears to be growing without reliance on future AI contracts. Investors should weigh this alongside the overall market offerings and performance potential of other stocks before making a decision.
