Production volume

The contract between Meta and Constellation Energy, the largest producer of carbon-free energy in the U.S., will take effect in June 2027 and will cover the long-term operation of the Clinton Clean Energy Center and the consumption of approximately 1.1 gigawatts of energy, which in terms of volume means the total capacity of one nuclear reactor there. In the event of no mutual agreement, the plant would probably face an early shutdown, as it has been operating since 2017 solely thanks to the government's Zero-Emissions Credit, which has now expired.

The agreement also benefited the shares

The importance of the contract between the giants was also reflected in the development of their share prices. Meta's value rose by 4 percent on the stock exchange from the closing price on June 2 to the end of the working week, with Constellation Energy initially gaining almost 16 percent after the announcement, but the price failed to maintain this growth and later fell by 20 percent during trading. However, for investors who do not yet have this key player from the energy sector in their portfolio, this is an acceptable scenario, as they can diversify their investment portfolio at a more favorable valuation compared to buying at the peak of the stock price performance.

Meta Platforms' share price performance over the past five years*

Constellation Energy's share price performance since its IPO*

Rescue from shutdown

Meta saved the Clinton Clean Energy Center at the last minute, and at the same time secured a clean and, above all, very efficient source of electricity. In addition, this step is also in line with the company's energy goals, which are defined by the ambition for a 100% net energy portfolio. The subsequent development of AI infrastructure, powering servers and data centers will thus be based on a minimal carbon footprint.

The old-new pillar of digital infrastructure

Joe Dominguez, president and CEO of Constellation Energy, commented on the deal: "Meta has understood the importance of supporting existing nuclear power plants, not just investing in new ones." Of course, the other side also contributed to the statements about the contract. Urvi Parekh, head of energy strategy at Meta, added that reliable and low-carbon energy is key to the development of artificial intelligence. Data centers, throughout their process, primarily require stability, which the kernel undoubtedly provides.

Chain reaction

Meta is not alone in the move to nuclear. According to the available data on CNBC, some other competitors from the Big Seven also see potential in it. Amazon bought the Susquehanna data center, which is powered by the core, and at the same time invested half a billion USD in the development of small modular reactors (SMRs). Following the partnership with Kairos Power, which I already mentioned in the October 2024 analysis, Google is preparing three new nuclear sites. Microsoft, on the other hand, is giving a second chance to the Three Mile Island nuclear power plant, which is infamous for the disaster that caused the US to move away from nuclear power in the past.  In addition, it is important to highlight that all of these companies, together with the World Nuclear Association, agreed in March to triple global nuclear capacity by 2050.

Political support and Meta in the future

The development of the political situation in the United States is also crucial. President Donald Trump has publicly supported a massive expansion of nuclear power and has signed four executive orders with the goal of quadrupling nuclear production by mid-century. The regulations include a reform of the regulatory framework (NRC) as well as support for domestic nuclear fuel production, which in turn is intended to make the US a self-sufficient nuclear player. The aforementioned small modular reactors, which are cheaper, faster to build and more flexible, also deserve special attention. Although there are no SMRs in operation in the US yet, Constellation is already considering applying to build SMRs at the Clinton plant, which could make Meta an indirect partner of the next nuclear generation.

* Past performance is no guarantee of future results.