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This stock is now beating Nvidia's as the top S&P 500 gainer for February

By Tomi Kilgore

The nuclear power company's stock has soared fourfold in two years, while AI-play Nvidia shares have only tripled

You don't have to be in the artificial intelligence business to see your stock go nuclear.

Shares of this old-economy company rallied further into record territory Wednesday, the day after they booked a record one-day gain, to propel it to the top of the S&P 500 index's SPX list of best performers for the month of February.

The rally took them above those of new-economy darling and AI play, Nvidia Corp.'s stock (NVDA), which fell 0.6% in afternoon trading Wednesday to sit in third place with a 27.2% gain in February. Ralph Lauren Corp.'s stock (RL) gained 0.7% to put it in second with a 28% gain this month.

Meanwhile, Constellation Energy Corp.'s stock (CEG) climbed 7.4% Wednesday, and has soared 37.1% in February.

And since Constellation Energy completed its separation from Exelon Corp. (EXC) on Jan. 19, 2022, it has rocketed 298.3%. Nvidia shares have run up 212.2% over the same time.

Constellation Energy, with a market capitalization of $53.4 billion - Nvidia's is just under $2 trillion - calls itself America's largest producer of carbon-free energy, through its mix of nuclear, wind, solar and hydro resources.

There are those who feel the trajectories of AI and clean-energy stocks are somewhat related, as AI can help increase the efficiency of power grids and develop technologies to reduce emissions at a time that demand for power is growing.

On Tuesday, Constellation's stock had run up a one-day record 16.9%, after the company reported fourth-quarter profit and sales that missed Wall Street expectations but provided a 2024 earnings outlook that was above forecasts.

KeyBanc Capital analyst Sophie Karp upgraded the stock (CEG) on Wednesday to overweight, after downgrading it to sector weight eight months ago, and established a stock price target of $190. That makes Karp the most bullish of the 12 analysts surveyed by FactSet who cover the stock.

For reference, 59 analysts cover Nvidia.

Karp said the quarterly results and discussions with management have "crystallized" Constellation's growth strategy, bolstered by existing nuclear production tax credits, which she believes will remain in place after this year's presidential election.

"As a reminder, our downgrade of CEG was due to the lack of identifiable catalysts at that time," Karp wrote in a note to clients. "However, CEG has laid out a convincing growth algorithm, underpinned by the existing policy framework and trends, which we think offers much more clarity, and solidly positions CEG as one of the premium infrastructure names in our coverage."

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.


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02-28-24 1514ET

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