Why Energy Infrastructure, Not Tech Stocks, Could Be Courtney's 2026 Pick for AI-Era Returns

The investment narrative around artificial intelligence has centered on technology companies for too long. While AI stocks have captured attention and valuations, a more compelling opportunity may lie in the essential infrastructure powering this boom—specifically, the utilities providing clean energy to hyperscale data centers. Constellation Energy represents exactly this kind of contrarian play, offering exposure to AI growth through a fundamentally different angle than the crowded tech sector.

The Real Driver Behind AI Investment: Energy Demand

Most investors focus on the technology layer when considering AI exposure, but they overlook a critical constraint: energy. Modern AI data centers consume substantially more electricity than traditional server farms, primarily because they run graphics processing units (GPUs) that generate significant heat requiring intensive cooling systems. This creates an enormous demand problem that utilities, not technology companies, are uniquely positioned to solve.

Hyperscalers like Microsoft and Meta Platforms are racing to expand their data center footprints, but their ability to do so depends entirely on access to reliable, sustainable power. This is where Constellation Energy enters the picture as a critical partner rather than a peripheral beneficiary.

Constellation Energy’s Clean Energy Competitive Moat

Constellation Energy stands as the largest producer of carbon-free electricity in the United States—a distinction that matters deeply to hyperscalers committed to sustainability goals. The company hasn’t simply positioned itself as a reliable supplier; it has locked in its strategic value through substantial, long-term power purchase agreements with Microsoft and Meta Platforms, both spanning two decades.

These aren’t speculative contracts. They represent binding commitments that provide revenue visibility and protect Constellation from commodity price fluctuations. Such arrangements are far more valuable than spot-market exposure to energy prices.

The company’s $26.6 billion acquisition of Calpine Corp., completed in January, fundamentally transformed its capacity profile. The deal added 55 gigawatts of generation capability to Constellation’s portfolio, including 27 gigawatts of natural gas and geothermal capacity. This combination of nuclear baseload power and dispatchable fossil fuel generation enables Constellation to provide the flexible, reliable supply that grid operators and hyperscalers both demand—a capability few competitors can match.

Navigating Policy Headwinds and Long-Term Value

Constellation’s stock experienced significant volatility recently, climbing to $412 per share in October before declining approximately 30% amid broader market concerns about elevated growth expectations and shifting political dynamics. On January 16, Reuters reported that thirteen state governors were preparing to sign an agreement with the Trump administration aimed at moderating electricity cost growth, potentially including two-year price caps on future PJM auctions.

This policy shift presents a near-term risk for auction-based revenue in the 2028-2029 and 2029-2030 delivery periods. However, the company has already secured all capacity cleared in the 2027-2028 PJM auction at the Federal Energy Regulatory Commission-approved cap of $333.44 per megawatt-day, providing intermediate-term revenue certainty. More importantly, the long-term bilateral agreements with hyperscalers remain immune to these regulatory shifts, ensuring stable cash flows regardless of broader market dynamics.

The Infrastructure Play Overlooked by Consensus

What makes this opportunity distinct is its structural foundation. Constellation Energy benefits not from speculation on AI adoption or technology cycles, but from the inexorable physics of power consumption. As hyperscalers build out AI infrastructure, they must have electricity. As electricity demand rises, utilities with sustainable baseload capacity and long-term supply commitments become strategic assets rather than commodity businesses.

The company’s massive portfolio of clean-energy assets—anchored by significant nuclear capacity—positions it to capitalize on the AI infrastructure build-out for years ahead. This is fundamentally different from betting on any individual technology trend; it’s an infrastructure play backed by binding commercial arrangements.

For investors seeking exposure to AI’s structural requirements rather than its narrative peaks, the clean energy utility sector offers compelling risk-adjusted returns. Constellation Energy exemplifies this thesis, combining essential infrastructure, long-term commercial partnerships, and strategic positioning in an energy-constrained era.