We recently compiled a list of the 10 Hot AI Stocks to Buy Now. In this article, we are going to take a look at where Constellation Energy Corporation (NASDAQ:CEG) stands against the other hot AI stocks.

A disruptive breakthrough by a Chinese tech startup in January 2025 has shaken the artificial intelligence (AI) market to its core, triggering a sharp sell-off among tech stocks and compelling investors to rethink their exposure to expensive semiconductors and large hardware providers. In just a few days, this innovative AI model demonstrated performance on par with established Western systems while operating at a fraction of the cost, upending the long-held belief that cutting-edge artificial intelligence must be built on enormous capital outlays and massive computing infrastructures.

This unexpected development has exposed vulnerabilities in sectors that have relied heavily on high-cost hardware, sending ripples through investment strategies and forcing market participants to rapidly reexamine the economics of AI. With the rapid emergence of more cost-efficient, scalable models, investors are now witnessing a fundamental shift where technological efficiency and operational agility are beginning to outweigh the premium previously demanded for state-of-the-art AI performance.

This shift is compelling companies across the AI landscape to accelerate innovation and streamline operations as they adapt to a new era defined by lower training costs and more efficient architectures. Although regulatory and national security concerns continue to loom large – particularly regarding data privacy and the geopolitical implications of relying on foreign-developed technologies – the promise of significantly reduced capital expenditures is reshaping the competitive dynamics of the sector. The advent of these efficient, cost-effective models forces large hardware providers and entrenched tech giants to reevaluate their strategies, while simultaneously opening the door to a broader array of investment opportunities that are less dependent on massive budgets and intensive computing resources. For investors, the rapid evolution toward these scalable solutions presents an opportunity to capture long-term value in a market that is becoming increasingly competitive and diversified, as the traditional paradigms of AI development give way to more sustainable and innovative approaches. With this, we will take a look at some hot stocks to buy in the AI sector.

Our Methodology

We shortlisted 10 names with large exposure to the AI megatrend according to ETF databases. We ranked the names by the magnitude of positive revision in 2026 EPS estimates in the last twelve months from Wall Street analyst consensus (street). Our belief is that significant upward revision in EPS estimates from leading analysts serves as confirmation that companies are genuinely benefiting from the AI-related tailwinds and are well-positioned to capitalize on future growth opportunities driven by these advancements. For all the companies mentioned we also include the number of hedge funds that own it.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).

Constellation Energy Corporation (NASDAQ:CEG)

Magnitude of revision in street 2026 EPS estimates: +42%

Number of Hedge Fund Holders: 78

Constellation Energy Corporation (NASDAQ:CEG) is exposed to the AI trend primarily due to its investments in innovative technologies that enhance operational efficiency, improve energy optimization, and support sustainability. As energy markets face increasing pressure for smarter, more efficient grid management and resource allocation, AI-driven solutions can provide significant benefits – AI is well-suited for predictive maintenance of energy infrastructure, real-time analytics to forecast demand, and optimize generation and distribution. As such, CEG’s push to adopt and integrate AI into its operations aligns with broader industry trends aiming to modernize energy systems. The stock has surged by more than 113% in the past 12 months, ranking number 3 on our list of hot stocks to buy.

The commoditization of AI’s impact on the data center expansion and the energy demand to power the related infrastructure look favorable right now. Furthermore, the intensifying competition between China and the West could further fuel the race for state-of-the-art GPUs and efficient energy to power them. In this context, Constellation Energy Corporation (NASDAQ:CEG) is making strategic moves to boost its scale and capabilities –  the company announced the acquisition of Calpine for an effective enterprise value of $26.6 billion, to create the largest, cleanest, and most reliable fleet in the nation, with a coast-to-coast presence that positions it to meet growing energy needs. As a result, the already accelerating future EPS growth estimates due to the AI and energy megatrends will be further boosted by the M&A deal being more than 20% accretive to 2026 earnings. The transaction is expected to close in Q4 2025, subject to regulatory approvals, with the company planning to take a proactive approach to resolving potential market power concerns through asset divestitures.

Overall CEG ranks 3rd on our list of the hot AI stocks to buy now. While we acknowledge the potential of CEG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CEG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.