New York, Jan 20, 2026, 11:49 EST — Regular session
Constellation Energy shares slipped 1.6% to $302.88 in late-morning trading Tuesday after Wells Fargo lowered its price target to $460 from $478 but maintained an Overweight rating. The stock touched an intraday low of $295.20 before clawing back some losses, as the SPDR S&P 500 ETF dropped 1.1% and the utilities sector ETF edged down around 0.2%. Vistra slid 2.9%, NRG Energy lost 1.1%, while Talen Energy gained 0.7%. 1
The pullback highlights how fast traders are revaluing merchant power stocks linked to data centers and wholesale markets. This sector has turned into a hotbed of political and regulatory tension, with grid operators flagging reliability concerns and consumers pushing back against soaring electricity bills.
Federal regulators have stepped in on co-located load arrangements in PJM Interconnection, targeting data centers that team up with nearby generators. The Federal Energy Regulatory Commission flagged unclear tariffs that could push costs onto other customers. FERC has set a Feb. 16 deadline for PJM to file its initial briefs on new transmission-service options under review. 2
Wells Fargo analyst Shahriar Pourreza labeled Constellation the firm’s “Best IPP Idea,” highlighting upcoming catalysts like asset transactions and data-center contracts, despite cutting the price target.
Fuel markets jolted again as U.S. natural gas futures surged 26.7%, hitting $3.932 per million British thermal units — the standard pricing unit. The spike came amid colder weather forecasts and a wave of short covering, according to Reuters. 3
Gas matters because gas-fired plants frequently determine the marginal electricity price across many U.S. markets. Large fluctuations can directly impact power-price forecasts and hedge valuations, including those for nuclear-heavy generators.
Policy uncertainty lingers. On Tuesday, PPL Corp threw its weight behind President Donald Trump and a bipartisan group of governors pushing PJM to organize a special auction to finance new “dispatchable” generation — power plants that can fire up on demand — specifically for data centers. PPL CEO Vincent Sorgi emphasized that “new, dispatchable generation is urgently needed.” 4
Constellation finalized its purchase of Calpine on Jan. 7, announcing the merged entity now boasts 55 gigawatts of capacity and serves 2.5 million retail and business customers. The deal makes it the largest electricity producer in the country. 5
The downside remains clear. Stricter rules on who covers grid upgrade costs or political moves to curb market prices could pressure merchant margins. Meanwhile, hiccups in integrating Calpine or unexpected nuclear plant outages could swiftly dent earnings.
Investors are focused on PJM’s ongoing co-location dispute and whether special-auction proposals targeting data-center demand gain momentum. All eyes turn to Feb. 16, the deadline for PJM’s initial briefs at FERC.
