Google Signed For 20 Years, But the Stock Is Still Down For the Year

30‑Second Take

Here's what happened. On October 6, Constellation Energy, the largest nuclear operator in the US, signed a 20-year power deal with Google.

It adds 890 megawatts of new nuclear capacity on the PJM grid by upgrading existing reactors, backed by more than $4.3 billion of Constellation investment. The stock jumped about 12% that day.

Then the 10-year Treasury pushed to its highest level since 2002, utilities sold off, and traders took profits. CEG gave back about half the pop in two days, clawed some of it back, and has gone nowhere since.

It still sits roughly 28% below its 52-week high and down about 19% for the year. Some options money is leaning bullish: a roughly $805K block of May 2027 $230 calls printed on October 9.

One headline didn't fix a year of underperformance, and that's the opportunity.

You're looking at a business that just signed 20 years of power with one of the biggest electricity buyers on the planet, at a price well below last year's market valuation.

Trade Setup

Timeframe: Swing to medium-term (3 to 6 months)
Edge type: Post-deal pullback plus long-dated call buying

The thesis is simple. CEG has lagged all year and stalled after the deal because rates spiked and the whole utility group got sold, not because anything went wrong at the company.

Google now joins Microsoft (the Crane Clean Energy Center restart) and Meta (Clinton) on Constellation's list of 20-year hyperscaler contracts.

If you believe AI data centers keep getting built over the next 3 to 5 years, you want to own the company that powers them, and the stock still trades well below its highs.

Snapshot Table

Chart

1-Month Trading Summary: CEG is up roughly 12% over the past month, and nearly all of that came from the October 6 jump on the Google deal.

It slipped back on October 8 as long-term Treasury yields climbed and utilities sold off, then recovered part of that and has traded sideways just under $300 since.

The stock is still down about 19% for the year and roughly 28% below its 52-week high of about $413, so the bigger picture is a leader that has spent most of 2026 cooling off.

Bull Case 

Why It Works

AI compute is still electricity-hungry. Hyperscalers are still signing power purchase agreements.

Nuclear baseload is the only form of 24/7, carbon-free generation at scale in the US. Constellation operates the largest fleet in the country, which makes it your default counterparty for any hyperscaler that needs firm power on a 20-year timeline.

The Catalysts

Microsoft's 20-year deal to restart the Crane Clean Energy Center (formerly Three Mile Island Unit 1) and Meta's 20-year deal at Clinton were already on the books.

Google now adds 890 MW of new capacity from upgrades at existing plants, which is faster and cheaper than building new reactors. Every one of these deals locks in long-dated, premium-priced revenue.

Q3 2026 earnings are scheduled for Monday, November 9, before the open. That gives management a stage to walk through the Google deal economics and the uprate timeline.

What The Numbers Say

On October 9, someone paid roughly $805K for May 2027 $230 calls. That's a buyer positioning for CEG to hold its ground into mid-2027, not betting on a bounce next week. Treat it as color, not as the thesis.

Your entry here is still roughly 28% below the 52-week high, on a business that just added a third hyperscaler to its contract book. That's the kind of dislocation worth leaning into.

Bear Case 

What Could Break It

The AI capex pullback is real. If hyperscalers slow data center buildouts and Ray Dalio has publicly warned that illiquidity could crack the AI trade, the forward power demand curve shifts right. CEG's premium PPA pricing depends on scarcity. Less scarcity, less premium for your thesis.

Nuclear execution is also messy. Restart timelines slip. Regulatory approval for new reactor builds takes years. If the Three Mile Island restart hits a snag, that's a direct hit to the thesis.

The Valuation Risk

The stock isn't cheap. It trades near 29x trailing earnings, more like a growth name than a classic utility.

If long-term Treasury yields keep climbing, the whole group can keep sliding, and a trip back to the high $260s, where CEG sat before the Google deal, is a realistic downside. Utilities and rising rates don't mix well.

How To Size It

If the whole AI power trade keeps sliding, correlation goes to one. CEG won't trade on its own fundamentals during a sector-wide selloff. You could be right on the business and wrong on the stock for several more weeks.

This is a pullback entry with structural upside, not a bet-the-portfolio conviction trade. Scale in. Start with a third of your intended position, keep ammunition for the high $260s, and don't swing the full size in one shot.

Quick Checklist 

✅ Thesis still valid after today's close
✅ Volume confirms move above key levels
✅ Catalyst date double-checked

Deep‑Dive Links

• Latest earnings report

• Analyst ratings and price targets

• Short interest data

• Company profile and investor relations

That’s all for today’s Everyday Alpha. We’ll have a new pick for you every morning before the market opens, so stay tuned!

Best Regards,
—Noah Zelvis
Everyday Alpha