The Physical Layer

AI and energy infrastructure, explained plainly.

Research · Initiation · 30 October 2026

Constellation Nasdaq: CEG

Constellation's scarcest asset is its place on the grid. At US$265, the shares already price in most of its own plan.

The call No call
Price at publication
US$264.58close, 29 October 2026
Target
Noneno position at this price
Conviction
Medium

What would prove the thesis wrongThe shares close above US$330 or below US$200 in October 2027, or 2026 adjusted operating earnings land below the US$11.50 bottom of Constellation's raised guide, or Crane has not delivered power to the grid by the end of 2027, the target Constellation still holds.

What would turn this into a callA price below about US$253, where my base value would sit 15 per cent above it, or a 2027 adjusted operating earnings guide with a midpoint of US$13.00 or more, which would lift my 2028 estimate enough for a long.

Read the full notePDF, 5 pages: thesis, valuation, scenarios, risks and sources Open the modelExcel, live formulas: change an assumption and the target moves

The call in brief

  1. Constellation runs about 22 gigawatts of nuclear plants, and since January the Calpine gas fleet as well. It is restarting the 835 megawatt Crane reactor, the former Three Mile Island Unit 1, under a 20-year contract with Microsoft, and still targets the second half of 2027.
  2. The October claim holds. Constellation's own FERC filing shows a fresh connection would not have been fully deliverable before 31 December 2030, and FERC let it borrow 760 megawatts of grid rights from two Eddystone units in June. Nothing I found says the piece was wrong.
  3. Crane is the proof, not the profit. It adds about 3.8 per cent to Constellation's nuclear output. The money is in pricing the rest of a fleet that already holds its grid places, and Google's deal of 6 October is the first large step.
  4. At US$264.58 the shares trade at 22.0 times the 2026 guide and 19.9 times the 2027 consensus of US$13.32. Constellation's own March framework points to about US$12.24 for 2027, so the consensus already runs 9 per cent ahead of the company's plan. Twenty times my 2028 estimate of US$14.52 gives about US$290, 10 per cent above the price.
  5. My call: no call, with medium conviction. I would revisit below about US$253, or if the 2027 guide due early next year has a midpoint of US$13.00 or more.