Google nuclear capacity deal reduces risk for CEG; established operator is a better/easier buy than early-stage SMR firms.

Google and Constellation have agreed to add 890 megawatts of new nuclear power to the PJM grid. Constellation's stock initially jumped by approximately 12% due to this news, but does news like this make a real difference?

The largest nuclear power operator in the United States is making a deal with one of the world's largest companies to add new capacity. Now, this additional capacity comes 100% through upgrades to the existing capacity.

These are existing nuclear power plants, and that approximately 800 megawatts is distributed across 11 reactors. So what they are essentially doing is investing over $4 billion in these upgrades.

Therefore, these are significant improvements to these stations. It primarily concerns the modernization of steam generators, turbine interiors, and other infrastructure and operational elements at these stations.

But from a narrative standpoint , it is a very positive headline , further reducing the risks for these stations and greatly increasing the likelihood that a company like Constellation will pay a higher price for its fuel when the time comes, because it operates in an ideal environment for selling electricity to the richest companies on the planet.

a well-established company like Constellation, the largest nuclear power operator in the United States , and considering deals like this are making headlines today, the picture looks very positive and it's easier to invest in that established company compared to, say, investing in some of the advanced small reactor companies that are still in their infancy.

in terms of risk-to-reward ratio, buying shares in Vistra, Constellation, or even Duke or Dominion, for example, may be a better and easier option, especially for institutional investors who need liquidity.