The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the recent period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as AI and vaccines) and services (such as Zoom calls and Netflix), as well as moving into new markets (clean energy, rare drugs), the domestic economy would not be growing, and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but was almost $30 trillion at the end of 2024. That's growth of 30-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 340 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation.

Innovation may be hard to define. But to borrow from former U.S. Supreme Court Justice Potter Stewart, you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the recent period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as AI) and services (such as Uber), as well as moving into new markets (clean energy, organic food, rare drugs), the domestic economy would not be growing, and capital would not be flooding into the country. A couple of statistics should help illustrate our point. Consider that U.S. GDP was approximately $1 trillion in 1930 and was almost $30 trillion at the end of 2024.That's growth of 30-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 340 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation. In addition, the value of listed corporations on U.S. stock exchanges at the end of 2024 was approximately $60 trillion, according to SIFMA, representing 48% of global equity market capitalization, while U.S. GDP represented only 26% of global GDP in purchasing power parity terms. The current above-average level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the durable and innovative U.S. economy.

The emergence of Artificial Intelligence and the growth of the data centers that support the process point toward robust prospects for the power generation industry, even with the threat of foreign competition. Meantime, de-carbonization is a secular global movement, spurred on by the goal in the Paris Agreement of net zero emissions by 2050. These trends support a bullish outlook for clean sources of power, including solar, wind, hydrogen -- and nuclear. Industry projections call for electricity demand to nearly double from 4.3 trillion terawatt hours in 2020 to 8.1 trillion terawatt hours in 2050 in order to meet the Paris goals. That's growth of about 2.5% per year, up from the historical trend of 1.5% growth. It is our view that the electricity fuel mix will change over time as the power base grows. Currently, the mix is 20% coal, 35% natural gas, 20% nuclear, and 25% renewables. By 2050, we think the mix will be closer to 5% coal, 20% natural gas, 50% renewables, and 25% nuclear. That gives nuclear energy a growth rate of around 3%-4% per year. We note that over the next five to 10 years, natural gas likely will grow as a source as it is a structurally easier conversion option for coal plants. But over the long term, nuclear generation likely will provide cost savings of as much as 20-%30% over other forms of power generation. Current utility companies in Argus coverage that are leaders in nuclear power generation include NextEra Energy (NEE), Dominion Resources (D), Duke Power (DUK), and Southern Co. (SO), which has the newest facility.

Constellation Energy is the nation's largest producer of carbon-free energy and a leading supplier of energy products and services, including sustainable energy solutions to homes, institutional customers, the public sector, community aggregations, and businesses, including three-fourths of Fortune 100 companies. Constellation's mission is to accelerate the transition to a carbon-free future. Constellation provides energy to over 15 million homes and businesses with over 31,600 megawatts of capacity. The company's nuclear fleet is the nation's largest. The company has 14,000 employees. CEG shares are a component of the S&P 500 Index.