The stock of a traditional company experienced a remarkable surge, extending its record-breaking one-day gain to propel it to the top of the S&P 500 index’s best performers for February. This surge surpassed even that of Nvidia Corp., a renowned player in artificial intelligence (AI), which saw a 0.6% dip in afternoon trading, securing third place with a 27.2% gain for the month. Ralph Lauren Corp. claimed the second spot with a 28% gain in February after its stock rose 0.7%.
Meanwhile, Constellation Energy Corp.’s stock surged by 7.4% on Wednesday, marking a remarkable 37.1% increase for February alone. Since its separation from Exelon Corp. on January 19, 2022, Constellation Energy’s stock has skyrocketed by an impressive 298.3%. In comparison, Nvidia’s shares have seen a robust 212.2% increase during the same period.
With a market capitalization of $53.4 billion, Constellation Energy distinguishes itself as America’s largest producer of carbon-free energy, leveraging a blend of nuclear, wind, solar, and hydro resources. Some analysts believe that there is a correlation between the trajectories of AI and clean-energy stocks, noting that AI technologies can enhance the efficiency of power grids and facilitate the development of emission-reducing technologies at a time when the demand for power is on the rise.
On Tuesday, Constellation Energy’s stock experienced a remarkable one-day surge of 16.9%, setting a new record. This surge followed the company’s fourth-quarter earnings report, which revealed profits and sales below Wall Street expectations. However, Constellation’s 2024 earnings outlook exceeded forecasts, prompting investor optimism.
KeyBanc Capital analyst Sophie Karp upgraded Constellation’s stock (CEG) to overweight on Wednesday, reversing a downgrade to sector weight eight months ago. Karp set a bullish price target of $190 per share, making her the most optimistic among the 12 analysts surveyed by FactSet covering the stock.
While 59 analysts cover Nvidia, Karp’s upgrade reflects a strong belief in Constellation’s growth prospects. She highlighted discussions with management and the company’s growth strategy, particularly emphasizing the significance of existing nuclear production tax credits. Karp expressed confidence that these credits will persist beyond the upcoming presidential election.
In her note to clients, Karp acknowledged the previous downgrade of Constellation due to a lack of identifiable catalysts. However, she noted that the company has since presented a compelling growth trajectory, supported by existing policy frameworks and trends. This clarity, according to Karp, solidifies Constellation’s position as a premium infrastructure investment within their coverage.