FuelCell Energy Inc. (NASDAQ:FCEL) climbed Tuesday after a major nuclear power deal between Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Constellation Energy Corp. (NASDAQ:CEG) gave traders fresh evidence that demand for AI computing power is far from slowing down.

Google’s Big Power Bet

Google and Constellation Energy signed a 20-year power purchase agreement to add 890 megawatts of new nuclear capacity to the PJM grid. 

The power will come from upgrades at 11 existing Constellation reactors in Illinois, Pennsylvania and New Jersey. Constellation will put more than $4.3 billion into the project.

The first upgrade is due by 2028, and all 890 megawatts should be online by the end of 2032. In total, Google has contracted for 3,590 megawatts from Constellation. When a hyperscaler signs up for power for two decades, it suggests the data center buildout still has a long way to go. 

Constellation ended Tuesday’s session up 12.25%, per Benzinga Pro market data. Investors are also buying smaller names that can get electricity to data centers faster than new grid connections can.

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Why FuelCell Benefits

FuelCell Energy sells fuel cell systems that produce power on-site, so data centers don’t have to wait in line for the grid. As tech giants hunt for every megawatt they can get, bulls see FuelCell’s on-site power as a way to fill the gap while large projects like Google’s uprates take years to finish.

Other alternative data center power names like Bloom Energy (NYSE:BE) and Generac Holdings Inc (NYSE:GNRC) also moved higher on Tuesday. 

Short Interest Adds Fuel

Short sellers are making the stock more volatile. About 24.9 million FuelCell shares, or 31.19% of the float, were sold short as of Sept. 15, according to Benzinga Pro short interest data. 

With that many bearish bets, a rally like Tuesday’s can push shorts to buy back shares, which pushes the price even higher and can lead to a feedback loop where shorts cover and the stock price climbs. 

FCEL Price Action

FuelCell stock has traded between $5.71 and $37.88 over the past 52 weeks. Even with Tuesday’s gain, the stock is about 45% below that high. FCEL shares closed up 14.28% at $20.65 Tuesday afternoon, according to Benzinga Pro data. 

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