Billionaire Philippe Laffont Just Increased His Position by 139% in This Data Center Opportunity (Hint: It's Not Nvidia)

Philippe Laffont is a billionaire investor best known for founding the hedge fund Coatue Management. While hedge funds are widely known for their sophisticated trading prowess and secretive natures, retail investors can get a glimpse into the stocks that financial institutions are buying and selling once per quarter by looking at a form 13F.

Coatue's latest 13F contained a number of trades across major technology stocks, particularly those looking to disrupt artificial intelligence (AI). However, the fund also made a massive purchase in a data center opportunity that has largely been flying under the radar. That's right! There are other opportunities in data centers besides Nvidia.

Below, I'm going to analyze the data center opportunity on Coatue's radar and assess if now is a good opportunity to buy the stock.

According to its most recent 13F, Coatue purchased 2.9 million shares of Constellation Energy (NASDAQ: CEG) during the second quarter -- increasing its position by 139%.

I don't blame you if you're confused as to how a power utility could be seen as a data center opportunity. Here's the thing: Data centers consume a ton of power. With AI becoming more of a tailwind for businesses across all industry sectors, companies are going to need to invest in more energy-efficient infrastructure.

This is where Constellation Energy comes into focus. The company specializes in nuclear power, which is widely seen as a superior alternative to traditional sources of powering data centers.

Several names in big tech have been quietly making moves at the intersection of nuclear power and data centers this year. In March, Amazon's cloud unit, Amazon Web Services (AWS), acquired a nuclear-powered data center from Talen Energy. And just this week, the company signed agreements with a state utility called Energy Northwest and Dominion Energy, both of which will be helping Amazon develop and explore how small modular reactors (SMR) can facilitate its nuclear power projects.

These deals by Amazon follow a similar one by Alphabet, which will be relying on Kairos Power to develop SMRs.

While the subject matter of Amazon's and Alphabet's recent moves have dominated headlines lately, Constellation Energy is by no means late to the party. The company has been working closely with Microsoft for quite some time, and several weeks ago, the two industry leaders announced plans to reopen a nuclear power facility on Three Mile Island in Pennsylvania.