Nuclear Stocks Are Surging on Google’s Power Deal. What Investors Should Know
Nuclear plants spent decades as the quiet backbone of the US power system, running around the clock while wind and solar grabbed the headlines. Now, AI data centers need that steady electricity, and tech companies are increasingly willing to pay for it directly.
Google and Constellation Energy signed a 20-year agreement on Oct. 6 that will fund 890 MW of additional nuclear capacity. Investors quickly treated the deal as something bigger than a single contract, sending shares across the merchant nuclear group higher.
What Google is paying for
No new reactor is being built. Constellation will upgrade turbines, steam generators, and digital control systems across 11 existing units at nuclear plants in Illinois, Pennsylvania, and New Jersey.
The process is known as an uprate, which increases the amount of electricity an existing reactor can generate. The first additional capacity is expected online in 2028.
Constellation plans to invest more than $4.3B in the projects. The company says the work will support roughly 4.4K existing jobs and create around 7.2K construction jobs.
The companies also signed a separate 15-year supply agreement covering another 2,700 MW from Constellation’s existing PJM fleet.
“Our agreement with Constellation to fund nuclear reactor uprates will strengthen the PJM grid.”
Amanda Peterson Corio, Google
Nuclear stocks jumped with it
Constellation shares surged 12% in morning trading after the announcement, but investors didn’t stop with the company actually signing the contract.
Vistra climbed 8%, while Talen Energy gained 7%. Neither company is part of the agreement, making their rallies a read-through on what similar contracts could mean for other merchant power generators.
The difference against the broader market was stark. The Utilities Select Sector SPDR ETF gained 2%, while the SPDR S&P 500 ETF Trust rose just 0.5%.
Investors were betting specifically on generators selling electricity into competitive power markets, rather than treating the announcement as good news for utilities broadly.
PJM needs more power
PJM is facing a sizable gap between the power it needs and the new generation available to meet that demand, with the deficit estimated at roughly 6.8 GW. The grid serves 67M people, while rising data center demand is adding pressure to an already tight power market.
PJM will also delay a planned reliability backstop procurement auction following the Federal Energy Regulatory Commission’s Sept. 29 decision to only partly approve the proposal.
Google is making a similar case from the buyer’s side. The company says nuclear uprates can add reliable electricity capacity without passing the cost on to other ratepayers.
Nuclear already generates nearly 20% of US electricity. Google’s nuclear commitments have collectively added more than 1.5 GW to its pipeline, spanning higher output from operating reactors and projects that return idled facilities to service.
Another hyperscaler deal followed
Google isn’t Constellation’s only hyperscaler customer. The company struck a similar 690-MW agreement with Amazon the previous week.
That deal includes a $3B expansion at Maryland’s Calvert Cliffs nuclear plant, where Constellation plans to add 190 MW of capacity. The additional generation is expected to come online between 2030 and 2032.
Two major agreements announced within weeks of each other give investors a clearer picture of how AI power demand could translate into revenue for nuclear operators.
Instead of depending entirely on future merchant electricity prices, generators can lock in long-term demand from some of the world’s largest technology companies. Google’s agreements stretch as long as 20 years, giving Constellation far more visibility into the economics of upgrading plants that are already operating.
What investors should watch
None of this capacity arrives immediately. The first new megawatts under the Google agreement aren’t expected until 2028, while capacity tied to Amazon’s deal comes early next decade.
That matters after the sector’s sharp rally. Constellation’s 12% jump shows investors are already assigning substantial value to the possibility that hyperscaler-backed nuclear contracts become more common.
The bigger signal goes beyond one trading session. Google and Amazon are putting billions behind the electricity infrastructure needed to support growing data center demand, and existing nuclear plants offer something particularly valuable: reliable generation that is already connected to the grid.
The next test is whether the model spreads beyond Constellation. More long-term contracts across PJM and other competitive power markets would show that hyperscaler-funded nuclear expansion is becoming an industry playbook rather than a pair of deals from the same operator.
