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Luke Kawa6/3/25

Constellation Energy spikes after sealing 20-year deal to sell nuclear power to Meta for AI

On Monday, news from Meta sank ad agencies. On Tuesday, the social media giant is helping to send another industry’s stocks skyward.

Constellation Energy is surging double digits in premarket trading after striking a deal to sell nuclear power to Meta. Other AI utilities plays with nuclear exposure like Vistra are also spiking on the news.

The AI data center rollout has fueled something of a nuclear renaissance stateside because its reliability and low emissions are simpatico with the huge power demands of these computing projects. Last year, Constellation announced plans to restart the shuttered Three Mile Island plant in Pennsylvania to sell power to another hyperscaler: Microsoft.

Constellation’s agreement with Meta will see the Facebook owner purchase the output of power from a plant in Illinois for 20 years beginning in mid-2027, when a state subsidy that previously saved these operations lapses.

“The PPA [power purchase agreement] will enable the Clinton Clean Energy Center to continue to flow power onto the local grid, providing grid reliability and low-cost power to the region for decades to come,” per a press release from Constellation. “Meta is purchasing the plant’s clean energy attributes as part of its commitment to match 100% of its electricity use with clean and renewable energy.”

This is presumably what traders were hoping for when they bid up shares of Constellation after its disappointing earnings report in early May, following remarks from CEO Joseph Dominguez that seemed to hint that the company was closing in on more pacts to use its nuclear capabilities to power the AI boom.

The Trump administration signed an executive order in late May aimed at speeding the approval process for new reactors.

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Toby Bochan, Luke Kawa

US stocks romp higher ahead of big tech earnings releases

The S&P 500 and Nasdaq 100 both rose more than 1% while the Russell 2000 gained nearly 2%.

Cowboy Wrestling a Steer

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CoreWeave slumps after filings show top shareholder Magnetar Financial sold over $500 million in stock last week

CoreWeave is sinking after one of its earliest backers and top shareholders, Magnetar Financial, sold over $500 million in stock last week.

Filings released after the close on Friday showed the Illinois-based investment firm, its subsidiaries, and executives dumped $486 million from Wednesday through Friday, while separate statements released last Wednesday revealed $60 million in sales from earlier in the week.

After these divestments, Magnetar and its affiliated parties still own north of 72 million shares of the neocloud company.

Magnetar previously put on what looked to be a massive collar trade that protected the value of its CoreWeave position through mid-March of next year by selling calls with strike prices of $160 and $175 and buying put options with a strike price of $70. There were no derivative transactions reported along with any of last week’s sales.

In late March, Magnetar senior managing partner David Snyderman called CoreWeave “the gold standard now for AI infrastructure” and told Bloomberg that the firm had not used the IPO as an opportunity to reduce its stake. Synderman was among the Magnetar-affiliated parties that reduced their positions last week.

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Matt Phillips4h

Bloom Energy rises after analyst updates

Fuel-cell-based power provider Bloom Energy jumped Monday after analysts at Bank of America and RBC Capital published somewhat contradictory commentary on the shares.

In its note, BofA said the company’s “new Brookfield partnership adds a blue-chip counterparty and reinforces its position at the center of the AI-driven power-resiliency build-out.”

But BofA analysts still rate the stock an “underperform,” citing “aggressive market assumptions” about the rate at which its recent announcements of partnerships and memorandums of understanding (MOUs) with potential data center clients, including Oracle, can be converted into actual revenue that justify the market’s assumptions about the coming years. They wrote:

“Bloom Energy would need to convert nearly all announced MOUs, accelerate project execution, and sustain 20%+ incremental margins, a steep execution curve for a company that has only recently achieved low-double-digit EBITDA margins. To reach 2030 levels, the company would need to achieve nearly double those deployments annually. The current valuation, in our view, already reflects this ‘blue sky’ scenario.”

And while BofA did raise its price target for the shares to $26 from $24, that’s roughly 80% below where the stock now trades.

Analysts at RBC, however, were much more sanguine about the prospects for the company. In a note published over the weekend, they raised their price target to $123 from $75, suggesting that the market seems to be pricing only a relatively modest part of the potential opportunity for Bloom represented by so-called behind-the-meter (BTM) data centers. (Those are data centers that have their own dedicated on-site power generation.) They wrote:

“We believe the upside opportunity continues to skew favorably on a growing BTM datacenter opportunity that we believe is still in the early stages. We acknowledge the competitive dynamics, but point to the recent partnership announcement with Brookfield as another proof point for the competitiveness of BE’s solution. We believe shares are priced for an incremental capacity increase which we think is supported by a large and growing TAM [total addressable market] opportunity.”

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J. Edward Moreno4h

Grail rises after announcing $325 million raise from Hims, others

Grail, a cancer detection biotech, rose more than 20% after it announced that it raised $325 million from a slate of investors including Hims & Hers.

Grail sells a blood test that detects cancerous tumors early on. The company also announced encouraging trial results for its flagship test, Galleri, on Friday.

Grail sold 4,639,543 shares at $70.05, a discount from the $78 closing price on Friday, to a group of more than six investors. Hims did not immediately respond to questions from Sherwood News, including how much of the $325 million fundraise it contributed. Grail announced last week that it received a $110 million investment from Samsung.

Grail reported $67.4 million in revenue in the first half of this year, up from $58.6 million in the same period in 2024. Galleri is available commercially but is pending approval from the Food and Drug Administration, which could position it to be covered by major insurers.

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AppLovin sinks amid report that multiple state regulators are looking into its data collection practices

Shares of adtech company AppLovin are on their back foot to open the week on the heels of a report from the New York Post that “state regulators, including staff from the attorneys general from Delaware, Oregon and Connecticut, have reached out to multiple short sellers, seemingly as part of a preliminary investigation.”

AppLovin told the Post that it is “not engaged in any investigations with any state attorneys general regarding its business; nor has the Company been contacted by any state attorneys general regarding any such alleged investigation.”

AppLovin got whacked earlier this month after Bloomberg reported that its data collection practices are the subject of an SEC probe. While they initially bounced after Wall Street suggested selling in response to the news was overdone, they’ve since proceeded to hit fresh lows even after AppLovin said that it had shut down software that short sellers alleged was responsible for installing apps on users’ phones without their permission.

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