What Makes Constellation Energy (CEG) a Lucrative Investment?

Aristotle Atlantic Partners, LLC, an investment advisor, released its “Core Equity Strategy” third-quarter 2025 investor letter. The letter highlighted the market review, quarterly performance, and attribution analysis. A copy of the letter can be downloaded here. In the quarter, the US equity market rallied, with the S&P 500 Index reaching 8.12%. Bonds also finished higher in the period, with the Bloomberg U.S. Aggregate Bond Index increasing 2.03%. The composite has returned 7.22% gross of fees (7.10% net of fees) in the quarter, underperforming the S&P 500 Index’s 8.12% gain. Security selection led to the relative underperformance of the strategy in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Aristotle Atlantic Core Equity Strategy highlighted stocks such as Constellation Energy Corporation (NASDAQ:CEG). Constellation Energy Corporation (NASDAQ:CEG) is a US-based utility company that produces and sells energy products and services. The one-month return of Constellation Energy Corporation (NASDAQ:CEG) was -8.61%, and its shares gained 46.84% of their value over the last 52 weeks. On November 14, 2025, Constellation Energy Corporation (NASDAQ:CEG) stock closed at $338.52 per share, with a market capitalization of $105.76 billion.

Aristotle Atlantic Core Equity Strategy stated the following regarding Constellation Energy Corporation (NASDAQ:CEG) in its third quarter 2025 investor letter:

"Constellation Energy Corporation (NASDAQ:CEG) is the largest producer of carbon-free energy in the United States, operating the nation’s largest nuclear fleet alongside natural gas, geothermal, wind, solar and hydro assets. The company was spun off from Exelon in 2022 and serves over 2.5 million customers, generating revenue through a diversified mix of power generation and energy sales across regulated and deregulated power markets. The pending acquisition of Calpine will significantly expand its generation portfolio, combining 24/7 nuclear power with additional dispatchable gas capacity. Constellation is central to the U.S. energy transition and provides reliable, affordable and sustainable power critical to electrification, decarbonization and AI-driven data center growth.

We see Constellation well-positioned as a leading player in the energy sector, with excellent operational performance, strong cash flow generation and significant financial flexibility. The company benefits from favorable legislation like the One Big Beautiful Bill Act, which provides tax credits for nuclear energy and support for clean hydrogen. Additionally, the company is expanding its nuclear fleet at low cost, securing long-term power purchase agreements (PPAs) with major tech companies and enhancing its asset mix through strategic acquisitions. These factors collectively validate nuclear energy as a preferred clean power source for large-scale operations and data centers. The shares of Constellation trade at a modest premium to their historical average. We view this premium as justified by the company’s clean energy profile, long-duration PPAs with hyperscalers, strong cash flow generation and leverage to the ongoing structural shift in U.S. energy demand largely driven by electrification, decarbonization and digital infrastructure investment."

Constellation Energy Corporation (NASDAQ:CEG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 79 hedge fund portfolios held Constellation Energy Corporation (NASDAQ:CEG) at the end of the second quarter, compared to 83 in the previous quarter. While we acknowledge the potential of Constellation Energy Corporation (NASDAQ:CEG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Constellation Energy Corporation (NASDAQ:CEG) and shared the list of most fantastic stocks every investor should pay attention to. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.