Constellation has signed 20-year deals with Amazon and Google, a nuclear-power arrangement tied to data-center demand.

**Key Points**

- Constellation Energy signed two major power purchase agreements in the past month.

- The agreements lock in revenue while bringing over 1 gigawatt of energy capacity online over the next several years.

- Constellation owns the largest nuclear energy fleet in the U.S. and is seeing strong demand for electricity from data centers.

Hyperscalers need power, and a lot of it. Constellation Energy (NASDAQ: CEG) operates as one of the largest independent power producers and has been signing long-term deals with hyperscalers as companies scramble to secure energy.

Over the past month, Constellation secured two more long-term agreements, this time with Amazon (NASDAQ: AMZN) and Alphabet's Google (NASDAQ: GOOG, GOOGL). The deals provide visibility into Constellation's future earnings while also helping fund power upgrades and expansions to meet future demand from data centers.

Here's what investors need to know about the deals and what they mean for Constellation Energy's stock over the next decade.

*Image source: The Motley Fool.*

**Constellation Energy's long-term deals with Amazon and Google add power capacity**

On Sept. 30, Constellation signed a 20-year power purchase agreement (PPA) with Amazon for 690 megawatts (MW) of power. As part of the deal, Amazon will help fund a 190-MW uprate at Constellation's Maryland nuclear power plant, Calvert Cliffs Clean Energy Center, with new capacity coming online between 2030 and 2032.

A week later, on Oct. 6, Constellation locked in another 20-year PPA with Google that will help bring 890 MW of new nuclear capacity online in the PJM Interconnection region. The agreement locks in long-term revenue for Constellation while enabling it to invest in nuclear equipment across its plants in Illinois, Pennsylvania, and New Jersey.

**Long-term agreements de-risk Constellation Energy's business model**

As an independent power producer (IPP), Constellation owns power-generation assets, including the largest nuclear power fleet in the U.S., natural gas plants, and other renewables. Unlike regulated utilities, Constellation doesn't own the power lines or transmission network. As an IPP, it isn't subject to regulator-set prices and sells electricity into the market at prevailing rates.

This business model lets Constellation capture upside from rising electricity demand, but it also exposes the company to downside risk if demand wanes or significantly more energy capacity comes online. By signing long-term "take-or-pay" agreements with major hyperscalers, Constellation locks in revenue on a large portion of its assets, providing revenue visibility and a floor for earnings.

**Where will Constellation Energy be in 10 years?**

Over the next decade, Constellation will focus on executing its projects: replacing turbines, adding nuclear capacity, extending nuclear plants, and bringing the Crane Clean Energy Center (formerly Three Mile Island Unit 1) online as part of its deal with Microsoft.

If Constellation can deliver nuclear uprates, expand capacity, and execute on its deals, it could see double-digit growth over the next decade and see the stock reach $700 per share as contracts translate into long-term earnings growth. If the company executes, investors could see it transform from a volatile merchant power producer into a trusted power supplier for data center operators.

*Courtney Carlsen has positions in Alphabet, Constellation Energy, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Constellation Energy, and Microsoft. The Motley Fool has a disclosure policy.*