Is Constellation Energy (CEG) The Most Crowded Hedge Fund Stock That is Targeted by Short Sellers?

We recently published a list of 15 Most Crowded Hedge Fund Stocks That Are Targeted by Short Sellers. In this article, we are going to take a look at where Constellation Energy Corporation (NASDAQ:CEG) stands against other most crowded hedge fund stocks that are targeted by short sellers.

Hedge funds piling into a stock is a signal of conviction. After all, if institutional investors are backing a company, there has to be a good reason for it, right?

Things get interesting when the same stock ends up with a high short interest. Where some investors back the company to become successful, others bet on its downfall. This contradiction is often eagerly tracked by investors, as it can potentially lead to explosive moves to either side.

Consider, for instance, a scenario where a stock with a high short interest and a high hedge fund holding starts going up. As everyone rushes to buy more of the already popular stock, short sellers rush to close their positions, triggering a strong bull rally.

We decided to shortlist stocks that were the most likely candidates for such a rally. To come up with our list of 15 most crowded hedge fund stocks that are targeted by short sellers, we only considered stocks with a market cap of at least $1 billion and a short interest of at least 3%. We then ranked these stocks by the number of hedge funds that have the stock in their portfolio.

Constellation Energy Corporation (NASDAQ:CEG)

Number of Hedge Fund Holders: 85

Short Interest:  3.34%

Constellation Energy Corporation (NASDAQ:CEG) operates as a seller and producer of energy products and services. The company operates through Midwest, ERCOT, Mid-Atlantic, New York, and Other Power Regions.

Citi upgraded Constellation Energy (NASDAQ:CEG) last month from Hold to Buy and assigned it a price target of $232. According to the firm, with the recent share price dip, the stock’s risk-reward ratio seems more appealing. Citi analyst Ryan Levine also mentioned some factors driving his upgrade, including natural gas builds in Texas, downward protection from power price fluctuations, co-location deals, and a favorable stock issuance by Calpine.

On the back of the increasing demand for energy from AI applications, the company reiterated its full-year adjusted earnings guidance. As per the guidance, the firm anticipates EPS between $8.90 to $9.60. The company’s planned acquisition of Calpine is expected to be completed by the end of this year. It is also redirecting its focus to potential data center projects linked to the US electrical grid.

CEO Joseph Dominguez highlighted in the earnings conference call:

“On-grid sales are increasingly attractive to us and to our customers, but we still believe that behind-the-meter configurations will make sense for some customers.”

Overall, CEG ranks 5th on our list of most crowded hedge fund stocks that are targeted by short sellers. While we acknowledge the potential of CEG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this 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.