A blog about investing in the AI era. Keeping up with stock, ETF, and economy news.
10/07/2026
After the AI Rally, AI Power Stocks? Why Constellation and Vistra Surged
✦ October 6 Market at a Glance
U.S. time, Tuesday, October 6 close
S&P 500
7,818.93 (+0.58%), first close above 7,800. Previous record close 7,798.99 (August 13)
Nasdaq Composite
27,599.79 (about +0.5%)
Top sector
Utilities +3.01% (among 11 sectors)
10-year Treasury yield
5.27% (5.31% on October 5, highest since April 2002)
On Tuesday, October 6, U.S. time, the S&P 500 index closed at a record high. It rose 0.58% to close at 7,818.93, finishing above 7,800 for the first time. The previous record close was 7,798.99 on August 13, so it took nearly two months to set a new record.
The Nasdaq Composite also rose about 0.5% to 27,599.79, and Barron's reported that the Nasdaq set a record for the second day in a row.
But the star of the day was not semiconductors or the cloud. The top performer among the 11 sectors of the S&P 500 was utilities, the public-service sector that includes electricity and gas, up 3.01%.
According to Barron's tally, since 1990 there have been 61 times when the index hit its first record after going more than 30 days without one, and utilities led only 2 of them. This is the third.
It is a sign that the heat of AI has spread beyond tech companies to the ones that supply them with electricity.
Google Said It Will Buy 20 Years' Worth of Nuclear Power
✦ The Google–Constellation Deal
Announced October 6
✔Power purchase agreement:20 years, 890MW from uprates at 11 nuclear units
✔Energy supply agreement:15 years, 2,700MW
✔Total:3,590MW
✔New investment:More than $4.3 billion by Constellation
✔First uprate:By 2028
✔Technology alliance:5 years, Google Cloud and Gemini Enterprise
The spark was the deal between Google and Constellation Energy. On October 6, the two companies announced a long-term collaboration, and the deal has two parts. One is a 20-year power purchase agreement.
Constellation will upgrade equipment at 11 nuclear units in Illinois, Pennsylvania, and New Jersey to raise output by 890 megawatts (MW), and Google will buy that electricity.
It is not a new reactor but capacity gained by running existing plants more efficiently, and Constellation said it is comparable to one new reactor. The first increment is expected by 2028.
The other part is a 15-year energy supply agreement of 2,700MW. It is explained as a deal that supports revenue so that existing plants can keep sending out power without losing their economic viability. The two deals add up to 3,590MW.
The new investment Constellation will make is more than $4.3 billion. The two companies also expanded a five-year technology alliance, under which Constellation will use Google Cloud and Gemini Enterprise in its nuclear plant operations.
Joe Dominguez, Constellation's chairman and CEO, said in essence that the collaboration could become a model for how technology companies and the energy industry grow the digital economy together and invest in power infrastructure with private capital.
Amanda Peterson Corio, Google's head of energy and power, said in essence that the deal, which funds reactor uprates, will strengthen PJM, the grid that serves 67 million people.
Why Has Electricity Become the Bottleneck for AI?
✦ Data Center Power Demand
Gartner forecast, June 2026
2025104GW
Actual base year
2026132GW
+27% from 2025; consumption 565TWh (+26%)
2030290GW
Forecast
The reason is in the numbers. Gartner forecast that global data center electricity consumption will reach 565 terawatt-hours (TWh) this year, up 26% from 447TWh last year.
Data center power demand will also rise 27% this year to 132 gigawatts (GW) from 104GW last year, and the forecast is for it to reach 290GW by 2030.
AI-optimized servers will use 31% of data center power this year, and Gartner said they will surpass conventional servers in 2027.
Linglan Wang, a director analyst at Gartner, said in essence that AI expansion is now constrained by access to power. It means that even with chips, data centers cannot run without electricity. That is why big tech is rushing to lock up electricity first.
On September 30, Constellation also signed a 20-year deal with Amazon to add 190MW at the Calvert Cliffs nuclear plant in Maryland.
Constellation Energy Corporation (CEG, Nasdaq)
✦ Constellation Energy (CEG) Stock Chart
Nasdaq · Last 12 months · Daily close · Adjusted
Constellation is the largest nuclear operator in the U.S., headquartered in Baltimore. Its 55GW of capacity spans nuclear, natural gas, oil, geothermal, hydro, wind, and solar facilities, enough to power the equivalent of 27 million homes.
The company says it provides about 10% of the nation's clean energy. In January it completed the acquisition of Calpine, a natural gas and geothermal power producer.
The closing price on October 6 was $300.40, up 12.25% from $267.62 the day before. Bloomberg reported that it rose as much as 15% intraday, and there was also a report that its market capitalization topped about $100 billion.
The investment points are cash flow made visible by long-term power contracts and the scarcity of nuclear assets.
✦ Constellation Price Target Consensus
MarketBeat tally of 22 analysts, baseline is the October 6 close
Oct 6 close (baseline) $300.40
High $441 · +46.8%
Average (22 analysts) $351.76 · +17.1%
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출처: Bloomberg
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Bernstein $296 · -1.5%
Low $277 · -7.8%
The teal bar is the analysts' average price target, and the light vertical line marks the October 6 close. Percentages are versus the baseline price. 17 of 22 analysts rate it buy or better, 5 are neutral. The average target is 17.1% above the baseline.
That said, Wall Street does not see this price as cheap. According to MarketBeat's tally, among 22 analysts, 17 rate it buy or better and 5 are neutral, and the average price target is $351.76. That is 17.1% above the October 6 close of $300.40.
Targets range from a low of $277 (-7.8% versus the close) to a high of $441 (+46.8%). Bernstein kept its outperform rating on October 6 but set its target at $296, below the close. It means that on the day the deal was announced, the stock passed this target.
Vistra Corp. (VST, NYSE)
✦ Vistra Timeline
2026, in order
1January 9
Signs a 20-year deal with Meta, 2,609MW
2October 5
Energy Department announces a conditional loan of up to $4.2 billion
3October 6
Closes at $160.50, up 10.77%
Vistra generates and sells electricity, and owns nuclear plants including Davis-Besse and Perry in Ohio, Beaver Valley in Pennsylvania, and Comanche Peak in Texas. On October 5, the day before the surge, the U.S.
Department of Energy made an announcement backing Vistra. The department conditionally committed to a loan of up to $4.2 billion for output uprates and modernization at Vistra's nuclear plants.
The project preserves nearly 4GW of reliable power, adds 433MW of new capacity, and helps the plants operate for another 20 years beyond their existing licenses.
✦ Vistra (VST) Stock Chart
NYSE · Last 12 months · Daily close · Adjusted
The closing price on October 6 was $160.50, up 10.77% from the day before. In January, Vistra also signed a 20-year deal with Meta, totaling 2,609MW by combining 2,176MW of existing generation with 433MW of uprates.
The uprates will come online in sequence between 2031 and 2034. The investment points are AI power demand, the reduced funding burden thanks to the loan, and the Meta deal.
✦ Vistra Price Target Consensus
MarketBeat tally of 17 analysts, baseline is the October 6 close
Oct 6 close (baseline) $160.50
High $298 · +85.7%
Average (17 analysts) $217.61 · +35.6%
BMO (Oct 5) $210 · +30.8%
Low $169 · +5.3%
The teal bar is the analysts' average price target, and the light vertical line marks the October 6 close. Percentages are versus the baseline price. 15 of 17 analysts rate it buy or better, 2 are neutral. The average target is 35.6% above the baseline.
However, the Energy Department's loan is conditional, not final. Vistra must meet technical, legal, environmental, and financial conditions before the final documents are signed.
According to MarketBeat, BMO lowered its price target from $231 to $210 on October 5. In the same tally, 15 of 17 analysts rate it buy or better and 2 are neutral, and the average price target is $217.61.
That is 35.6% above the October 6 close of $160.50, and targets range from a low of $169 (+5.3%) to a high of $298 (+85.7%).
Other Power Stocks Rose Too
✦ Power Stocks on October 6
Close and change from the previous day
Constellation Energy (CEG, Nasdaq)
• $300.40, +12.25%
Vistra (VST, NYSE)
• $160.50, +10.77%
Talen Energy (TLN, Nasdaq)
• $373.11, +12.43%
NRG Energy (NRG, NYSE)
• $103.60, +7.02%
On the same day, Talen Energy (TLN, Nasdaq) closed up 12.43% at $373.11, and NRG Energy (NRG, NYSE) closed up 7.02% at $103.60. It means money spread across power stocks, not just one stock's good news.
Stocks Rose Even Though Rates Passed 5%
The 10-year U.S. Treasury yield was 5.31% at the October 5 close, the highest since April 2002. The next day, October 6, it fell 0.04 percentage points to 5.27%, and the 30-year yield was 5.64%.
When rates are high, the value of future earnings usually gets discounted, which weighs on growth stocks. Even so, the S&P 500 set a record.
The Wall Street Journal wrote in essence that the market now runs on a single engine: the familiar tech companies that build the AI revolution and profit from it.
To sum up, the stage for the AI rally has widened from semiconductors and the cloud to the companies that make electricity. Google's nuclear deal and the Energy Department's loan were the evidence, and Constellation and Vistra jumped sharply.
But after rising more than 10% in a day, the burden has also grown, as seen in Bernstein setting its target below the close.
People have long said that as AI advances, power stocks, starting with small modular reactors (SMRs), would inevitably rise, and I'm curious whether a proper rally will come.
This is not investment advice. You know that, right? Let's protect our precious money ourselves.
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