Wall Street is selling artificial intelligence and semiconductor stocks as they take profits on the soaring AI and momentum trade. Thankfully, the broader bull case for the market remains intact for the second half, especially after a healthy recalibration.
Some investors might want to start dipping their toes back into AI stocks like Micron and Nvidia, with the Nasdaq and the iShares Semiconductor ETF (SOXX) testing their 50-day moving averages.
Others might instead look to buy best-in-class, beaten-down stocks that did not participate in the rally.
Today, we dive into why investors should buy Constellation Energy CEG stock now for long-term growth, dividends, value, and 70% upside as the nuclear power giant and 21st-century energy star attempts to find its footing at a key technical level.
Best Stocks to Buy Now in July and Hold Forever: Nuclear and AI Energy Giant CEG
Constellation Energy is the largest nuclear power generator in the U.S. and a titan of the AI energy age, operating across natural gas, geothermal, hydro, and other energy sources. CEG solidified its position as one of the energy powerhouses of the 21st century when it completed its $27 billion deal to buy natural gas and geothermal standout Calpine in early 2026.
The nuclear power giant’s Calpine acquisition created the largest clean power company in the U.S. and expanded its footprint deeper into growth-and-tech-heavy California and Texas. CEG boasts that it generates about 10% of all clean electricity in the U.S.
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Large AI data centers consume as much electricity as mid-sized cities. The AI data center boom, mixed with electrification, the reshoring of critical manufacturing, such as semiconductors, and broader energy needs, are projected to increase U.S. electricity demand 25% by 2030 and up to 100% by 2050.
This backdrop has sparked an overnight race to bring more power online as quickly as possible after U.S. electricity generation remained roughly flat at around 4,000-4,400 terawatt-hours (TWh) between the mid-2000s and early 2020s.
The next 10 years alone are projected to require more new electricity generation than any period in U.S. history. Therefore, the bull case for buying Constellation Energy is rather simple: the richest tech companies in the world, Wall Street, and the U.S. government have way too much on the line to let a lack of power stop the AI age in its tracks.
Image Source: U.S. Department of Energy/EIA
Constellation’s expanding power generation fleet is full of all the sources that big tech and the growing U.S. economy crave, from clean, always-on nuclear and other non-fossil fuel sources such as geothermal, hydro, wind and solar to natural gas.
Despite a push to move away from fossil fuels over time, natural gas remains one of the growth engines of the energy sector and a vital cog in the economy, attempting to produce cheap, reliable power while weaning off coal. Natural gas is a big winner since it is cleaner than coal and far more reliable than intermittent sources such as solar and wind. The AI hyperscalers are making long-term deals to buy more natural gas.
The AI hyperscalers and the U.S. Department of Energy are helping Constellation restart nuclear reactors that were shuttered for economic reasons and pursue its next-gen small modular reactor ambitions.
The U.S. government, under Biden and now Trump (highlighting bipartisan support), is attempting to spur a nuclear energy revival after decades of stagnation, with the Trump administration aiming to quadruple nuclear capacity by 2050.
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Speaking of, CEG is one of the vanguards of the now completely entrenched relationship between AI hyperscalers and nuclear power. It signed a groundbreaking 20-year power deal with Microsoft MSFT in 2024.
Since then, Constellation has landed nuclear power deals with Meta META and others, as it builds out its data center power portfolio around the country via nuclear, natural gas, and more. Big tech and AI hyperscaler customers are critical since they pay a premium and lock in long-term agreements.
Some on Wall Street are starting to question how long the AI data center capex boom can continue, pointing to Meta’s recent move to sell excess computing power to customers as a potential canary in the coal mine.
Still, a slowdown doesn’t mean that they will just stop spending completely, and even a large recalibration of the current estimates signals massive spending. AI hyperscalers are currently projected to spend upwards of $800 billion in capex in 2026 alone—with that figure projected to climb again in 2027.
Buy CEG for Dividends, Earnings Growth, Value, 70% Upside, and Breakout Potential
Constellation raised its dividend by 10% in 2026 after lifting it by 10% last year and 25% in 2024 as part of a plan to consistently boost its payout to shareholders.
The company also has a very sustainable dividend payout ratio of 17%, meaning it has plenty of room to continue lifting its dividend going forward.
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CEG reaffirmed its 2026 EPS range when it reported its Q1 earnings. More importantly, the energy company expects to grow its earnings by 20%+ in 2026 through 2029. Wall Street is high on the stock, with 16 of the 22 brokerage recommendations Zacks has coming in at “Strong Buys,” with zero sell ratings.
The nuclear energy stock has climbed ~380% since its February 2022 IPO after it spun off from Exelon, crushing its Alternative Energy Industry’s 80%, the Energy Sector’s 46%, and the S&P 500’s 73%. Despite the outperformance, CEG is down ~25% in the past year and roughly 40% from its mid-October 2025 highs.
CEG stock is also attempting to find technical support at its Microsoft-deal breakout levels from 2024 and its previous peaks.
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Constellation offers investors ~70% upside it if where to ever to return to its all-time high. On top of that, its average Zacks price target implies 50% upside from its current levels. On the valuation front, CEG trades at a 23% discount to its industry, 50% below its highs, and 10% below its median at 18.9X forward 12-month earnings.
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This article originally published on Zacks Investment Research (zacks.com).