Constellation Energy (NASDAQ: CEG) hit an all-time high of $410 per share before pulling back 10%. The company is poised to benefit from a surge in electricity demand over the next two decades, with expectations of a 55% increase in demand by 2040. Constellation is a major player in nuclear power, catering to clean energy demands.

Despite the positive outlook, investors should be wary of Constellation Energy’s high valuation. The stock’s price-to-book ratio of 7.8 and price-to-earnings ratio of over 41 are well above the industry average. Wall Street’s enthusiasm has led to an inflated stock price, leaving little room for error. A significant drop earlier in 2025 highlights the potential risks associated with the stock.

For most investors, Constellation Energy may not be worth the risk at its current valuation. With uncertainties surrounding the future of nuclear power and the stock’s premium pricing, conservative investors should exercise caution. Waiting for a more substantial pullback or reevaluation of the market’s perception could offer a better entry point for interested investors.

Read more at Nasdaq: Should You Buy Constellation Energy While It’s Below $400?