Home / Business and Economy / AI Boom Ignites Nuclear Power Demand Surge
AI Boom Ignites Nuclear Power Demand Surge
16 Aug
Summary
- AI workloads are accelerating electricity demand growth by a decade.
- Nuclear power is becoming the preferred energy source for hyperscalers.
- Data centers will consume up to 12% of U.S. electrical demand by 2028.
Artificial intelligence workloads are significantly accelerating electricity demand, effectively pulling forward a decade of growth. Nuclear power is emerging as the preferred, always-on energy backbone that hyperscale companies are actively seeking to secure through contracts.
The U.S. Department of Energy projects that data centers will account for as much as 12% of the nation's electrical demand by the year 2028. Constellation Energy's CEO has indicated to investors that projected spending levels for 2026 are nearly 75% higher than the previous year and continue to be revised upward, driven by demand from hyperscaler customers.
Constellation Energy (CEG), operating the largest U.S. nuclear fleet, is well-positioned to benefit. In the second quarter of 2026, the company reported adjusted earnings per share of $2.55, exceeding estimates, and raised its FY2026 adjusted EPS guidance to between $11.50 and $12.50. Management has secured 920 MW of long-term nuclear power purchase agreements (PPAs) with investment-grade customers, scheduled to begin between 2029 and 2032.
The company's nuclear fleet operated at a 93% capacity factor in the second quarter of 2026, generating 44,160 GWh. The Crane Clean Energy Center restart is targeted for 2027. Despite a significant increase in refueling outage days during the second quarter of 2026, leading to a year-over-year drop in operating income, Wall Street analysts maintain a positive outlook, with a majority holding buy or strong buy ratings and an average target price of $349.96.
