Constellation Energy (CEG) shares are inching up on Tuesday, June 3 after Meta Platforms (META) announced a 20-year nuclear power agreement with the largest U.S. producer of carbon-free energy. 

Meta has agreed to buy more than 1 gigawatt of energy, or the entire output from CEG’s nuclear facility in Illinois, to meet the ever-increasing power demand of its AI data centers. 

The agreement will commence in June 2027. Including today’s gains, Constellation Energy stock is up nearly 100% versus its year-to-date low in early April. 

What Meta’s Deal Means for Constellation Energy Stock

Meta’s long-term power purchase agreement (PPA) is a meaningful positive for CEG investors since it ensures a stable revenue stream for the nuclear energy company. 

Additionally, this deal secures the future of the company’s Clinton facility, which faced potential closure after its zero-emission credits expire in 2027. 

Onboarding a tech titan reinforces Constellation Energy’s position in the global market for carbon-free energy, which could drive other artificial intelligence companies to its nuclear facilities as well. 

All in all, Meta’s announcement not only improves visibility into CEG’s future earnings and its overall growth prospects – it actually strengthens the case for nuclear power as a reliable source for AI data centers as well. 

Note that Constellation Energy stock also currently pays a dividend that yields 0.5%.

UBS Sees Significant Further Upside in CEG Shares

UBS analysts raised their price target on Constellation Energy shares in the wake of Meta’s 20-year power purchase agreement on Tuesday. 

They expect CEG to win more PPA deals in the back half of this year, which, they believe, could drive the company’s share price further up to $360, indicating potential upside of another 12% from here. 

Plus, Constellation’s $16 billion acquisition of Calpine Corporation that’s expected to close by the end of 2025 may also serve as tailwind for the nuclear energy stock, the investment firm told clients in a research note today. 

Other Wall Street Firms Recommend Caution on Constellation Energy

Investors are still recommended caution in buying Constellation Energy stock at current levels as other Wall Street analysts are not as bullish on the Nasdaq-listed firm. 

While the consensus rating on CEG shares currently sits at “Strong Buy,” the mean target of about $303 indicates potential downside of some 3% from current levels.