Is Constellation Energy (CEG) The Best Alternative Energy Stock to Buy Now?
March 22, 2025
We recently published a list of 11 Best Alternative Energy Stocks to Buy Now. In this article, we are going to take a look at where Constellation Energy Corporation (NASDAQ:CEG) stands against other best alternative energy stocks to buy now.
The global energy market is going through a massive change as alternative energy sources are becoming increasingly popular and the world transitions away from fossil fuels. Governments, corporations, and investors are now prioritizing renewable energy sources. This is powered by favorable policies, technological advancements, and the rising demand for energy due to emerging industries like AI-driven data centers. Thus, energy stocks are becoming an attractive investment opportunity as the world moves toward sustainable energy alternatives.
Accordingly, global clean energy deployment hit a new record in 2023, driven by a growth of 85% in solar PV and 60% in wind capacity, as per the International Energy Agency (IEA). Investment in solar exceeded all other energy sources, breaching the $500 billion mark, as per the World Economic Forum. On the other hand, investments in battery storage surpassed $50 billion, adding to the strength of the energy storage solutions. Thus, these investments point toward the increasing demand for renewables in the global energy mix.
The acceleration of this transition has been majorly supported by federal policies. Initiatives worldwide, like the Inflation Reduction Act (IRA) in the U.S., have fostered the expansion of clean energy by presenting tax credits and incentives for renewable energy projects. Utility-scale solar and wind additions made up 90% of the total new capacity additions, up from 57% in 2023, according to a report by Deloitte.
The demand for electricity is also increasing as the expansion of AI, data centers, and cleantech manufacturing flourishes. According to Deloitte’s 2025 Energy Outlook, data centers could drive 44 GW of additional demand by 2030, adding to renewable energy solutions’ needs. Consequently, investments in solar, wind, and battery storage are expected to grow at an increasing rate.
On the other hand, nuclear energy is facing renewed interest. Although additions to nuclear capacity faced a decline in 2023, now the number of reactors globally under construction is at 58, emanating a total capacity of over 60 GW. Investments in the nuclear sector are doubled by countries like the U.S. and France, recognizing it as a potential reliable emissions-free energy solution.
Furthermore, the clean energy sector is propelled forward by increasing technological advancements and cost-cutting. The price of lithium-ion batteries has reduced by over 90% in the past decade, with a 40% decrease in 2024 alone, as reported by the World Economic Forum. AI also plays an important role in the optimization of energy storage, enhancing grid efficiency, and furthering renewable deployment.
Green hydrogen has emerged as a promising long-term solution. The capacity for hydrogen electrolyzers grew by 360% in 2023, largely due to China and the U.S. Such growth and advancements in hydrogen storage and distribution could potentially make hydrogen a viable alternative for industries requiring high-energy-density fuels.
Therefore, alternative energy stocks seem to be an attractive investment in light of strong policies, technological advancements, and increasing demand for clean energy. The Inflation Reduction Act in the U.S., as well as policies in Europe and Asia, have introduced incentives to encourage companies to expand their renewable energy initiatives.
Thus, the sector is positioned to be attractive for investors in terms of long-term growth due to its swift expansion, decreasing costs, and increasing adoption by the corporate sector.
To come up with our list of the 11 Best Alternative Energy Stocks to Buy Now, we first picked companies operating in the alternative energy sector with market capitalization surpassing the $5 billion mark. We then further shortlisted these stocks on the basis of hedge fund backing, as stocks with strong hedge fund interest often prove to be financially strong, with robust growth potential.
The shortlisted stocks were then ranked using Insider Monkey’s Hedge Fund Database as of Q4 2024, as per the number of hedge funds invested in them. The companies with the highest hedge fund interest were ranked in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close up of a wind turbine producing electricity as the sun sets.
Number of Hedge Funds Holders: 85
Constellation Energy Corporation (NASDAQ:CEG), a prominent producer of emissions-free energy, provides nuclear, hydro, wind, natural gas, and solar power across the U.S. The company is at the front line of the clean energy transition with a generating capacity of 31,676 megawatts. Its position among the best clean energy stocks is strengthened by its robust financial growth and strategic investments.
Constellation Energy Corporation (NASDAQ:CEG) reported GAAP net income of $11.89 per share and adjusted operating earnings of $8.67 per share, surpassing the upper end of its revised forecast, demonstrating robust financial performances in 2024. Backed by investments in wind, nuclear, hydroelectric power, and solar, the company reaffirmed its 2025 earnings guidance range of $8.90 to $9.60 per share. Constellation Energy Corporation (NASDAQ:CEG) continues to broaden its clean energy portfolio, maintaining its position as a top player in the clean energy sector.
Moreover, in 2024, Constellation Energy Corporation (NASDAQ:CEG) took a major step with its agreement to take over Calpine Corporation, blending Calpine’s natural gas assets with its emissions-free generation. This deal is projected to improve grid reliability and position the company as a prominent provider of sustainable energy solutions. The company is placed as the leading player in the best clean energy stocks, as the acquisition will solidify the company’s ability to meet rising demand.
By restarting the Three Mile Island Unit 1 under the Crane Clean Energy Center initiative, Constellation Energy Corporation (NASDAQ:CEG) strengthened its dedication to alternative energy. The project will revive 835 megawatts of carbon-free power to Pennsylvania’s grid ahead of schedule. The restart is anticipated to generate 3,400 jobs and contribute $16 billion to the state’s economy. This solidifies Constellation Energy’s leadership in nuclear energy, a core component of the clean energy transition.
Consequently, Constellation Energy Corporation (NASDAQ:CEG) ranks No.1 for the 11th consecutive year, as it remains the nation’s largest producer of emissions-free energy. The company continues to lead the clean energy sector with major investments in solar, wind, hydroelectric power, and nuclear, and a strategic expansion plan. Thus, CEG is one of the best clean energy stocks to invest.
Overall, CEG ranks 3rd on our list of best alternative energy stocks to buy now. While we acknowledge the potential of CEG, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CEG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
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