Market analysis highlights energy stocks including GE Vernova, NuScale, Bloom Energy, and Cameco positioned to benefit from severe grid congestion and baseload shortages driving data center expansion.
Artificial intelligence has dominated discussions across technology, business, and broader markets in recent years. Every company participating in the AI ecosystem ultimately depends on one critical component: data centers. While these facilities form the backbone of AI, their soaring electricity demands now outpace available supply. This dynamic presents operational challenges for AI hyperscalers—companies that operate large-scale cloud platforms—but creates significant strategic opportunities for two specific energy-sector firms.
In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia.
Hyperscalers require two essential resources: continuous, massive power supplies and renewable energy sources. Constellation Energy (NASDAQ: CEG) addresses both needs. As a clean energy provider operating the United States’ largest nuclear fleet, Constellation offers a reliable alternative to fossil fuels. While natural gas generates carbon emissions, wind and solar cannot feasibly deliver uninterrupted baseload power. Nuclear energy, by contrast, operates continuously without emitting carbon.
The demand for nuclear capacity is evident in Constellation’s twenty-year power purchase agreement with Microsoft (NASDAQ: MSFT). Under the terms of the deal, Microsoft will restart the Three Mile Island facility in Pennsylvania—now rebranded as the Crane Clean Energy Center—with Constellation supplying its output. Microsoft’s commitment to a two-decade contract highlights hyperscalers’ reliance on long-term, dependable energy. These companies are investing hundreds of billions into data center construction, yet those facilities remain useless without adequate power. Although Constellation’s stock has declined more than 25% year-to-date through August 20, the pullback may present a compelling entry point for long-term investors.
GE Vernova (NYSE: GEV) takes a different approach, focusing not on electricity generation itself but on the hardware required to produce and distribute it. Data center expansion has driven a surge in demand for GE Vernova’s equipment. During the first half of this year alone, data center power equipment generated $5 billion in revenue for the company—more than double its full-year total from last year.
GE Vernova provides direct exposure to the infrastructure layer of the AI build-out. As a premier hardware supplier, it has secured a firm position within the power supply chain. With a backlog of $176 billion, the company enjoys guaranteed future revenue that effectively establishes a floor for its top line. Some investors may question whether the rally has peaked, given the stock’s rise of over 42% this year and 194% since the beginning of 2025. Nevertheless, the company remains well-positioned for sustained long-term growth. Investors should anticipate higher-than-average volatility, which has characterized the stock’s performance over the past twelve months.
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Stefon Walters has positions in Microsoft. The Motley Fool has positions in and recommends Constellation Energy, GE Vernova, and Microsoft. The Motley Fool has a disclosure policy.