This was a watershed moment in the history of the U.S. nuclear industry. Constellation Energy plans to restart the Three Mile Island nuclear power plant and is expected to resume operations in 2028 after approval by the Nuclear Regulatory Commission. After the news broke, its stock price soared nearly 20%. Microsoft’s deep financial resources will inject new vitality into the factory. The technology company signed a 20-year agreement to purchase clean electricity from the plant to offset emissions from its artificial intelligence data center. The relaunch of Three Mile Island is more than just a milestone for Constellation. It illustrates the growing financial opportunities that nuclear power presents to utilities and their investors. Only one electric utility stock is hotter than Constellation right now. Vistra shares surged more than 14% after the Three Mile Island announcement on Friday. VST YTD Mountain Vistra Stock, YTD The power company based outside Dallas is seen as one of the next leading contenders to sign a data center nuclear deal. Vistra leads the market Before, Vistra’s name was not well-known, but since this year, Vistra’s stock price has soared more than 175%, surpassing the artificial intelligence chip giant Nvidia. Leads the entire S&P 500 in data center opportunities. In March this year, Vistra completed the acquisition of two nuclear power plants in Ohio and one in Pennsylvania by spending $3.4 billion to acquire Energy Harbor. The broader utilities sector is up about 25% this year, driven in large part by data center demand trends. Shahriar Pourreza, senior managing director of North America Power and Utilities at Guggenheim Securities, said investors can tap into this trend by buying independent power producers like Vistra instead of regulated utilities because they are based on Economic conditions dispatch electricity. Jefferies initiated a buy rating on Vistra earlier this month and selected the company as the best stock in the power industry. Wall Street analysts’ average price target is $116.89 per share, which would represent a 26% upside from Thursday’s closing price of $92.52, according to FactSet data. VST NVDA YTD Line Vistra vs. Nvidia “Vistra’s years of acquisitions, rationalization, and lessons learned around risk have positioned the company well in today’s power market,” Jefferies analysts led by Julien Dumoulin-Smith said earlier this month Sometimes the report tells the client. “Vistra’s timely acquisition of the Energy Harbor nuclear portfolio in 2023 provides the company with a coveted nuclear portfolio,” analysts said. Vistra CEO Jim Burke told investors, The company is in multiple conversations with customers about powering data centers directly from its factories and is “conducting due diligence on multiple sites.” Burke singled out Comanche Peak, a 2.4-gigawatt twin-reactor nuclear power plant outside Fort Worth, Texas. “We’re seeing some interest in Comanche Peak,” Burke told analysts during the company’s second-quarter earnings call in August. Other power companies poised to benefit from growing nuclear demand from data centers include NextEra Energy and Dominion Energy. NextEra CEO John Ketchum told investors in July that the company was considering restarting the Duane Arnold nuclear power plant in Iowa “if we can get a deal with the Duane Arnold nuclear power plant.” Arnold, there will be opportunity and plenty of demand. NextEra rose just 1.4% on Friday, but is up 37% so far this year, according to FactSet. But 62% of Wall Street analysts give the company the equivalent of a buy rating. Dominion Energy Chief Executive Robert Blue told investors the utility would consider a nuclear power plant next to Millstone in Waterford, Connecticut. Set up a data center Dominion is up more than 22% this year, even though nearly 80% of Wall Street analysts currently hold shares.
