Constellation Energy (CEG) shares ended the week on a strong note, closing at $294.07 on Friday, a 2.88% gain for the session and a 12.2% rise from the prior Monday's close. The rally capped a three-day winning streak heading into the Memorial Day weekend, driven by fresh grid-reliability measures and renewed attention on rising electricity demand from artificial intelligence data centers.
The catalyst for the move came late Thursday when U.S. Energy Secretary Chris Wright issued an emergency order directing PJM Interconnection to coordinate with Constellation to keep Eddystone Units 3 and 4 in Pennsylvania operational beyond their planned shutdown date. The order, reported by Reuters, extends the units' operation until August 22. Wright emphasized that energy sources that perform reliably when needed most hold the highest value.
Adding to the momentum, PJM's board announced a decision to accelerate a centralized power supply procurement to September 2026. The move, outlined in a May 19 board letter, aims to address near-term reliability risks. PJM Board Chair Paula Conboy warned that waiting until 2027 would increase reliability concerns. Capacity procurement payments compensate generators for being available, not just for the electricity they produce.
The broader power sector also benefited from these developments. According to Barron's, shares of Talen Energy rose 9.5%, Vistra gained 6.9%, and NRG Energy climbed 8.3% on Wednesday following the PJM update. Constellation itself surged 7.9% that day.
Constellation's strategic positioning in the power market has been strengthened by its acquisition of Calpine, completed on January 7. The deal added approximately 23 gigawatts of capacity, primarily from natural gas, geothermal, battery storage, and solar assets, bringing Constellation's total fleet to 55 gigawatts. This expansion comes as data center demand continues to grow, with Constellation signing a 380-megawatt deal with CyrusOne for a data center next to its Freestone Energy Center in Texas during the first quarter. Calpine also holds an exclusive agreement for a second 380-megawatt phase at the same site.
In its first-quarter earnings report earlier this month, Constellation posted adjusted operating earnings of $2.74 per share and reaffirmed its 2026 guidance of $11 to $12 per share. CEO Joe Dominguez highlighted the company's focus on execution, while CFO Shane Smith confirmed the full-year outlook.
Despite the recent gains, Constellation's stock remains 28.74% below its 52-week high of $412.70. The broader market provided some support, with the S&P 500 rising 0.37% and the Dow Jones Industrial Average climbing 0.58% on Friday.
Policy risks persist, however. PJM has warned that without state-level rules requiring new data center loads to cover the costs of backstop procurement, it remains unclear how those costs would be allocated, potentially leading to political and consumer backlash. Constellation has also noted its exposure to commodity price swings, weather, fuel costs, and policy changes, as well as potential supply restrictions in nuclear fuel markets.
U.S. equity markets will be closed Monday for Memorial Day, with Constellation shares next trading on Tuesday. Investors will be watching for updates on PJM's Critical Issue Fast Path timeline, following the board's decision to cancel a special members meeting scheduled for May 27, which could be replaced by a session for new proposals.
