AI Energy Surge: GEV and CEG Primed for Long-Term Growth

The AI push demands immense energy, benefiting firms like GE Vernova and Constellation Energy. With strong growth projections and strategic acquisitions, both companies present potentially compelling investments for professional investors.

Date: 04-04-2025

AI Rating: 8

The latest report outlines how the surge in artificial intelligence (AI) applications is poised to significantly impact the energy sector, particularly energy companies that are at the forefront of this revolution. The impending demand for energy, especially from AI platforms, creates a favorable environment for energy stocks, particularly GE Vernova (GEV) and Constellation Energy (CEG).

Earnings Growth Potential
GE Vernova is anticipated to exhibit notable earnings growth with projections of a shift from an adjusted loss of -$1.60 in FY23 to adjusted earnings of $5.58 in the following fiscal year. The earnings growth forecast of 15% in 2025 and a significant 73% in FY26 indicates immense potential for capital appreciation. The robust revenue growth forecasts of 5% for 2025 and 9% in 2026 further underline this optimistic trajectory.

Similarly, Constellation Energy’s earnings per share (EPS) estimates have shown promising signs, with anticipated growth of 8% in 2025 and 18% in 2026. The company's efforts to solidify its position as a leading clean energy provider, alongside a lucrative long-term agreement with Microsoft, enhances its market attractiveness.

Market Dynamics and Future Projections
Analyzing the market dynamics, the ongoing transition toward cleaner energy sources, propelled by government endorsements and corporate strategies, positions GEV and CEG favorably within the energy landscape. The acquisition of Calpine by Constellation reinforces its operational capabilities while providing a robust platform for long-term revenue growth. This transaction is complemented by significant privatization efforts in the renewable and nuclear sectors.

The emerging demand for reliable power in AI applications will likely drive energy consumption, especially for providers offering nuclear and renewable solutions. Thus, GEV and CEG could experience substantial upside as they align their growth strategies with this trend.

Stocks: GEV CEG MSFT