1. Vistra Corp (NYSE:VST)
Number of Hedge Fund Holders: 92
Vistra Corp (NYSE:VST), a Texas-based, vertically integrated energy company, operates a diverse portfolio that includes electricity generation, wholesale energy sales, fuel production, and logistics. Vistra Corp (NYSE:VST) provides electricity and natural gas to residential, commercial, and industrial clients.
Amid rising clean energy demand, especially from sectors like AI and data centers, Vistra Corp (NYSE:VST) is well-positioned to benefit. Back in March, the company completed its acquisition of Energy Harbor, enhancing its nuclear capacity by an additional 4,000 megawatts and expanding its customer base by around 1 million. Vistra Corp (NYSE:VST) is also investing significantly in renewable energy, with active projects in solar and battery storage. In May, the company announced plans to add up to 2,000 MW of natural gas capacity in Texas, aimed at improving grid stability as demand increases with economic growth and sectoral electrification.
JPMorgan initiated coverage on Vistra Corp (NYSE:VST) on October 17, assigning an Overweight rating and a price target of $178. The firm emphasized Vistra’s strong positioning within the Texas power market, suggesting that it could benefit from natural gas production growth and energy market volatility. With nearly half of its gas generation operating in the ERCOT market, Vistra Corp (NYSE:VST) stands to profit from intra-day price surges driven by factors such as heat waves and evening power demands.
Here’s what Fidelity Investments said about Vistra Corp. (NYSE:VST) in its Q2 2024 investor letter:
“An overweight stake in utility company Vistra Corp. (NYSE:VST) (+24%) was the top individual relative contributor. In Q1, the Texas-based independent power producer completed its acquisition of Ohio-based nuclear fleet operator Energy Harbor. The new Vistra, with its expanded geographic footprint, is in strong position to gain from the buildout of AI-capable data centers, which require enormous amounts of power to run. It is expected that local grids in the U.S. will need to invest heavily over the coming years to improve their power infrastructure and meet growing demand. In the nearer term, firms may choose to contract with independent power producers, like Vistra, rather than rely on the local provider.”
While we acknowledge the potential of VST, 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 VST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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