Constellation Energy

Okay.

So for energy, can we think about some companies linked to the growth of AI in this fundamental first layer of the cake, so to speak? And you've highlighted Constellation Energy, NextEra Energy, and Bloom Energy.

Why so?

Yeah.

Uh, NextEra is one that does the more traditional energy generation, uh, aspect of things.

Mm.

Constellation is something that's tapping into nuclear-

Mm

But at the end of the day, don't the tech overlords just end up building these capabilities for themselves? The following month, that was May 2024, I entered into the first of two unsuccessful short positions in the sector over the following 12 months.

I had conceded that a couple of individual names such as Constellation and Vistra could capitalize on the boom with their unregulated asset base.

I had not counted on those names dragging the rest of the sector with them.

By September, the squirrel's frustration was manifesting itself in the form of desperate memes after the combination of the restart announcement for Three Mile Island and a Fed rate cut added $17 billion of market cap to Constellation in a single session, an amount equal to more than the cost to build the Voetley nuclear power plant in Georgia.

For most of the past two years, the sector's schizophrenia continued.

However, since the outbreak of the Iran war, The bond proxies have steadfastly refused to react to rising treasury yields.

I think Microsoft is a really good example of this.

This summer, they signed a 20-year agreement with Chevron to have natural gas power for their West Texas data center, but earlier this year they also entered an agreement with Constellation Energy to buy power from the nuclear plant at Three Mile Island that's being brought back online.

Holtec, not the only one who is trying to do this.

Both of those projects with Microsoft would probably begin supplying power in 2027, 2028, but you see them blending strategies.

And in the meantime, terrestrial nuclear energy...

With the startup of Three Mile Island once again, that's Constellation Energy and the big investments and buying power in advance.

Microsoft, Apple, no, Microsoft, I think maybe Meta and a few others have bought big chunks of power in the future so they'll have enough power.

But like you say, I mean, all of this stuff in Venezuela, we've seen the pickup in the stocks of Schlumberger, SLB.

increase in demand.

Constellation's efforts at the Crane Clean Energy Center, formerly Three Mile Island, to strike a deal with a data center to be able to say we'll power that for 850 or close to 850 megawatts of resources coming back on the system.

New nuclear not being paid for by captive customers, all being paid for by the market and a contract basis suggests that there is an appetite for where those types of decisions can be made.

The Vistra deal in Ohio and Pennsylvania with Meta, which is, I think, 433 megawatts of upgrades to existing nuclear facilities in Ohio and Pennsylvania, are good examples of people that are investing billions of dollars into the nuclear fleet.

They had two units, one melted down.

They signed a 20-year deal on the other unit that did not melt down with Constellation Energy.

So that was last year or the year before, so that's just one indicator of what we have in the future.

So, I have some electricity demand data points here.

So speaking of, we like nuclear, think it would be a good place to have a little bit of money, very small piece.

And there's probably nuclear companies out there that you don't even know they're nuclear.

You know, Sam mentioned Constellation Energy, but another one we like is Rolls Royce.

You know, who would have known? GE, they are not nuclear, but they are part of the nuclear puzzle from the generators that those nuclear reactors will power on.

Okay.

Constellation Energy advises using surge protectors for sensitive equipment like TVs, computers, and gaming systems.

It's common to experience a sudden jump in current when the electricity is restored, which can damage or short circuit your electronics.

Hmm.