Constellation Energy signs Amazon deal as 30% of output is contracted

Constellation Energy (CEG) has secured a 20-year agreement with Amazon, adding to a portfolio of long-term contracts that now covers roughly 30% of the company's clean baseload output. Management disclosed this figure during its fiscal Q2 2026 earnings call in August, highlighting the growing share of power already sold to large customers under multi-year terms.

The expansion in contracted volume has accelerated recently. Between the previous earnings call and the August call, Constellation signed approximately 920 megawatts of new long-term nuclear deals. This capacity represents about half of the 1,790-megawatt Calvert Cliffs plant in Maryland, the state's only nuclear facility. These new agreements average 18.5 years in duration and involve investment-grade customers, indicating strong credit ratings.

Notable additions to the customer base include Walmart, which signed its first nuclear power purchase agreement, a milestone management described as a first for a major retailer. The Amazon deal, announced on September 30, 2026, will see Constellation add about 190 megawatts of nuclear capacity at Calvert Cliffs. Despite these recent signings, the company fell behind its internal timeline earlier in 2026, with management citing regulatory uncertainty as the primary factor in March.

Regulatory conditions remain in flux but are showing signs of stabilization. Most of Constellation's nuclear plants operate within PJM, a power market undergoing rule changes directed by the Federal Energy Regulatory Commission (FERC). Management stated on the August call that customer confidence has returned, allowing planning and contracting to proceed. However, clarification is still needed on parts of PJM's proposals, and management expects a FERC order in the first or second quarter of 2027.

The financial terms of these contracts remain opaque. Constellation has not disclosed exact prices, though management referenced a potential value range of $20 to $50 per megawatt hour during the August call. This wide spread means the same contracted share could represent significantly different revenue streams. Management characterized existing nuclear power as a premium product within these deals but declined to narrow the range due to customer sensitivity regarding pricing.

Valuation metrics suggest investors are paying a premium for Constellation relative to the broader market. The stock trades at 26.4 times earnings, compared to 21.7 for the S&P 500. This multiple is notable given that the stock is down 24% over the past year while the S&P 500 is up 16.2%. With roughly 70% of clean baseload output still outside long-term agreements, the future trajectory of the contracted share is a key variable for holders.

The next major milestone for Constellation Energy is the anticipated FERC order in early to mid-2027. If the contracted share remains near 30% following that regulatory decision, it would indicate a stall in the signing process.