Philippe Laffont is a billionaire investor best known for founding the hedge fund Coatue Management. Although hedge funds are widely known for their sophisticated trading skills and secrecy, retail investors can get a glimpse into the stocks that financial institutions are buying and selling once a quarter by looking at a Form 13F.
Coatue’s latest 13F included a number of trades in big tech stocks, particularly those looking to disrupt artificial intelligence (AI). However, the fund also made a huge purchase in a data center opportunity that largely flew under the radar. That’s right! There are also other options in data centers Nvidia.
Below, I’ll analyze the data center opportunities on Coatue’s radar and assess whether this is a good opportunity to buy the stock.
Which data center stocks did Coatue Management just buy?
According to the most recent 13F, Coatue bought 2.9 million shares of Constellation Energy (NASDAQ: CEG) during the second quarter – increasing the position by 139%.
I don’t blame you if you don’t know how an electric utility can be viewed as a data center option. The point is: data centers use a lot of power. As AI increasingly becomes a tailwind for companies across all industry sectors, companies will need to invest in more energy-efficient infrastructure.
This is where Constellation Energy comes into the picture. The company specializes in nuclear energy, which is widely seen as a superior alternative to traditional sources for powering data centers.
Some recent major steps in the field of nuclear energy
Several big tech names have quietly made moves this year at the intersection of nuclear energy and data centers. In March, AmazonThe cloud division of Amazon Web Services (AWS) has acquired a nuclear-powered data center from Talen Energy. And just this week, the company signed agreements with a state-owned company called Energy Northwest Dominion energyboth of which will help Amazon develop and explore how small modular reactors (SMR) can facilitate its nuclear power projects.
These deals from Amazon follow a similar one Alphabetthat will rely on Kairos Power to develop SMRs.
While the topic of Amazon and Alphabet’s recent actions has dominated headlines lately, Constellation Energy is certainly not late to the party. The company works closely with Microsoft for some time now, and just weeks ago, the two industry leaders announced plans to reopen a nuclear power plant at Three Mile Island in Pennsylvania.
Are Constellation Energy Shares a Buy Now?
The chart below illustrates Constellation’s price-to-earnings (P/E) ratio trends over the past six months.
The obvious conclusion is that Constellation has recently experienced outsized valuation expansion. Following the announcement of the Three Mile Island deal on September 20, Constellation shares rose as much as 12% – a pretty sharp move based on one press release.
While I don’t encourage trying to time your buying activity, I think investors should approach Constellation with some caution at this point. It’s no coincidence that Amazon and Alphabet have made some moves with nuclear energy companies in the wake of Microsoft’s deal with Constellation.
I suspect more companies will explore nuclear power solutions for their data center needs. As such, Constellation stock could experience some momentum based on future news – whether the company is directly involved or not.
The positive here is that the AI story is still in its early stages. For this reason, demand for data center services and adjacent capabilities, such as nuclear power, should persist in the long term.
While Constellation Energy shares may seem a bit pricey right now, Coatue’s investment is a smart move. Investors with a long-term horizon may want to keep this name on their radar.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions at Alphabet, Amazon, Microsoft and Nvidia. The Motley Fool holds positions in and recommends Alphabet, Amazon, Constellation Energy, Microsoft and Nvidia. The Motley Fool recommends Dominion Energy and recommends the following options: long calls in January 2026 for $395 at Microsoft and short calls in January 2026 for $405 at Microsoft. The Motley Fool has a disclosure policy.
Billionaire Philippe Laffont Just Increased His Position by 139% in This Data Center Opportunity (Hint: It’s Not Nvidia) was originally published by The Motley Fool
