Is Constellation Energy a Buy After Their Latest Earnings Report?

Key Points

Constellation Energy's Q1 earnings surged on the back of the Calpine acquisition.

The company now dominates the nuclear and natural gas power generation markets.

It expects double-digit revenue growth in the coming years.

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Constellation Energy (NASDAQ: CEG) was spun off from Exelon in 2022. At the time, few investors viewed the separation as transformative. Constellation was, after all, a utility. A stable but unexciting business inheriting a fleet of nuclear plants and power-generation assets from Exelon.

Four years later, the narrative looks dramatically different, with Constellation sitting right at the center of the artificial intelligence (AI) boom and the race to secure reliable power for hyperscale data centers. Constellation's latest earnings reinforce the view, and if there's any doubt whether the stock is a buy, its numbers and outlook should clear that up for investors.

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The big Calpine boost

Constellation reported its first-quarter numbers on May 11. Its Q1 adjusted earnings per share (EPS) of $2.74 rose sharply from $2.14 a year ago, while GAAP net income surged to $1.6 billion from a paltry $118 million in Q1 2025. Revenue surged 64% year over year to $11 billion.

The headline numbers look dramatic, but much of that surge can largely be traced back to the Calpine acquisition.

Constellation was already the largest nuclear energy company in the U.S. In January 2026, it made a huge growth leap when it acquired Calpine, the largest generator of electricity from natural gas and geothermal assets in the U.S., in a $16.4 billion deal.

With this move, Constellation has become the largest private-sector power producer in the world . This was the first full quarter with Calpine fully baked in, and it delivered, as those numbers prove.

Moreover, two projects reached important milestones during the quarter.

The 105 megawatt (MW) Pastoria Solar Project, the largest-ever renewable energy project contracted by the California Department of Water Resources (DWR), was commissioned on April 16. The Pin Oak Creek Energy Center, meanwhile, began commercial operations on April 30. It is a natural gas facility providing power Electric Reliability Council of Texas (ERCOT) grid.

Notably, Calpine oversees both projects.

More and more data centers are signing up for Constellation

In Q1, Constellation also signed a 380 MW agreement with data center developer and operator, CyrusOne, for a data center in Texas. It has already secured another 380 MW contract for phase 2, and these agreements are in addition to the 400 MW agreements CyrusOne signed with Calpine in 2025.

With the explosive rise of AI, hyperscalers like Microsoft and Meta, and data center operators are suddenly scrambling to secure enormous amounts of reliable, uninterrupted, 24/7 electricity. That has instantly made nuclear energy very valuable, an area where Constellation already holds a dominant position.

Just as important is natural gas, particularly for meeting the immediate on-site power demands of data centers through solutions like gas turbines. Calpine has significantly expanded Constellation's capabilities on the front, effectively transforming the company into a full-scale AI infrastructure play.

Is Constellation Energy stock a buy?

For 2026, management has reaffirmed its full-year adjusted earnings guidance of $11 to $12 per share, or nearly 23% growth at the midpoint. Through 2029, it projects adjusted base EPS to grow at an annualized rate of 20% .

What's base EPS? That's the steady, predictable earnings from long-term contracts, and makes up around 60% to 70% of Constellation's total revenue. The remaining 30% to 40% is the extra earnings that Constellation could make from higher power prices and rising commercial margins (the profit it makes from commercial customers like AI data centers).

Let's just say, even that 20% projected growth in earnings could prove conservative, especially if Constellation continues securing large-scale contracts from hyperscalers. It already has long-term agreements with Meta and Microsoft, reinforcing its position at the center of the AI-driven power demand boom. For long-term investors, the latest earnings report further strengthens the case that Constellation Energy remains a compelling buy.

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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.