In this article, we look at the 10 Best Renewable Energy Stocks To Buy According to Hedge Funds.
The Future of Renewable Energy
The renewable energy industry is currently one of the most prominent sectors globally. Examples of renewable fuels include wind, hydropower, biofuel, and solar energy. According to a report by Business Research Company, the global renewable energy market was valued at $1.10 trillion in 2024 and is expected to reach $1.55 trillion by 2028, growing at a CAGR of 8.8%. Environmental concerns and strict environmental regulations in many developed countries have significantly boosted the sector and the energy generation industry has seen an increase in installed capacity for renewable energy sources. The increase in power demand and energy consumption are also some of the key reasons for the growing demand in the renewable energy market.
According to the International Energy Agency (IEA), the global energy demand is forecasted to increase by 3.4% annually till 2026. Around 85% of the demand is expected to come from China and India. The energy demand in India alone is forecasted to grow by 6% annually till 2026 due to robust economic growth and rising household consumption. Southeast Asia is expected to see a 5% annual increase in electricity demand by 2026. In the United States, a moderate increase in electricity demand is expected in the coming years, mainly due to the growing need for data centers. The electricity usage by data centers, artificial intelligence, and cryptocurrency could potentially double to 1,000 TWh by 2026. According to the IEA, the rise in electricity generation from low-emission sources will meet global demand growth over the next three years, with renewable energy anticipated to surpass coal as the leading energy source by early 2025.
The U.S. Energy Information Administration (EIA) expects renewable energy deployment to grow by 17% in 2024 to potentially reach 42 GW and contribute to nearly a quarter of the nation’s electricity generation. However, this growth might come with a temporary increase in renewable energy costs due to high financing, labor, and land expenses. Despite this, tax credits from the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) are likely to keep solar and wind energy competitive. Solar and storage markets are expected to see further expansion, driven by tax incentives and government support, particularly through programs like the DOE’s Loans Program Office. On the other hand, the wind and hydrogen energy sectors might face challenges. Wind energy is encountering higher deployment costs and delays in obtaining approvals, while hydrogen energy struggles due to a lack of government incentive programs to support its development.
Investing in Renewable Energy
Hanchen Wang, Equity Analyst at DWS Group, expresses optimism about the future of the renewables market, noting its growing appeal to investors due to the potential for stable long-term returns and alignment with global sustainability goals. Wang emphasizes that while renewable energy sources like wind, solar, and hydropower are gaining market share, they still encounter challenges such as high upfront costs and intermittency issues. He underscores that advancements in technology, including better energy storage solutions and enhanced grid infrastructure, are essential for overcoming these obstacles and fostering the sector’s growth.
In a recent interview, Bruce Flatt, CEO of Brookfield Asset Management, highlighted the significant impact of decarbonization on industries and investments, calling it a major trend reshaping the landscape. The company has launched a dedicated renewable energy fund, initially raising $15 billion, with plans to establish a second fund. This initiative aims to support companies in reducing their carbon emissions by investing in and developing renewable energy projects. Flatt emphasized that the company is one of the largest global developers and owners of renewable energy assets, with solar and wind power projects in 15 countries. The company’s strategy includes not only constructing renewable energy infrastructure but also supplying renewable power directly to corporate clients, helping them achieve their net-zero commitments. The U.S. Inflation Reduction Act (IRA) has positively impacted the renewable energy sector, providing significant incentives that have accelerated project development. Flatt noted that the Act has increased the likelihood of project completion, with more projects advancing at a faster pace, which benefits the renewable energy market.
The renewable energy sector is poised for substantial growth, driven by increasing environmental awareness, favorable regulations, and advancements in technologies like wind, solar, and hydropower. Although the industry faces challenges such as high upfront costs and technological barriers, its overall outlook is optimistic. With that in context here are the 10 best renewable energy stocks to buy according to hedge funds.
Wind turbines against a backdrop of the sky, signifying the power of renewable energy.
Our Methodology
For this article, we scanned clean energy ETFs plus online rankings to compile an initial list of 50 renewable energy stocks. From that list, we narrowed our choices to 10 stocks that were the most widely held by hedge funds. The hedge fund data was taken from our database of 912 elite hedge funds as of Q2 of 2024. We also included the market cap of these companies as of September 2. The list is sorted in ascending order of their hedge fund sentiment, as of the second quarter.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Renewable Energy Stocks To Buy According to Hedge Funds
10. Bloom Energy (NYSE:BE)
Number of Hedge Fund Holders: 29
Market Capitalization as of September 2: $2.71 Billion
Bloom Energy (NYSE:BE) is a leader in solid oxide fuel cell (SOFC) technology, a method that produces electricity through a chemical reaction without burning fuel. Their fuel cells can run on different energy sources such as natural gas and hydrogen and help to reduce carbon emissions while providing reliable and secure energy. Bloom Energy’s (NYSE:BE) technology is reliable and plays a vital role in the global shift towards renewable energy.
In Q2, Bloom Energy (NYSE:BE) reported that its revenue increased 11.5% year-over-year to $335.8 million. The company’s gross margin improved by 1.7% year over year to 20.4%. The company issued 3% convertible green notes to enhance its financial position and entered into a strategic partnership with CoreWeave to supply power to its data center in Illinois. Additionally, Bloom Energy (NYSE:BE) received approval from Silicon Valley Power to use its fuel cells to power 20 megawatts of AWS data centers in Santa Clara, California. The company reaffirmed its full-year 2024 outlook and projects revenue between $1.4 billion and $1.6 billion and a gross margin of approximately 28%
On August 5, Bloom Energy (NYSE:BE) announced a significant advancement in its SOFC technology and introduced a hydrogen-powered fuel cell that achieves 60% electrical efficiency and 90% efficiency in Combined Heat and Power (CHP) applications. Bloom Energy’s (NYSE:BE) SOFC technology can operate on natural gas, hydrogen, or a blend of both and emits nitrogen oxides (NOx) as pollutants in negligible amounts, when compared to traditional combustion-based systems. While hydrogen is currently more expensive than traditional fuels, Bloom Energy’s (NYSE:BE) breakthrough in achieving 60% electrical efficiency could make hydrogen economically viable as a fuel source. This makes Bloom Energy’s (NYSE:BE) fuel cells a cleaner alternative for electricity production. As of September 2, Bloom Energy (NYSE:BE) has a market cap of $2.71 billion. The company is expected to grow its earnings by 100% this year. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $17.67, which represents a 46% upside potential from its current level. As of the second quarter, the stock is held by 29 hedge funds with stakes worth $190.76 million. Graham Capital Management is the largest shareholder in the company with stocks worth $51.41 million as of June 30.
9. Edison (NYSE:EIX)
Number of Hedge Fund Holders: 32
Market Capitalization as of September 2: $33.60 Billion
Edison (NYSE:EIX) is a leading energy company that has been serving California for over a century through its primary subsidiary, Southern California Edison (SCE). Edison (NYSE:EIX) provides electricity to approximately 15 million people across a 50,000-square-mile service area and is involved in the transition towards clean energy, aligning with California’s ambitious goals for carbon-free power by 2045.
In 2023, Southern California Edison (SCE), Edison’s (NYSE:EIX) principal subsidiary, delivered 52% carbon-free power to its customers. The utility company has made substantial investments in energy storage, contracting approximately 2,200 megawatts in 2023 alone, which increased its total energy storage capacity to about 8,100 megawatts, one of the largest portfolios in the United States. Additionally, SCE is heavily involved in grid modernization efforts, having completed 84% of its planned grid hardening in high fire-risk areas, which not only enhances reliability but also supports the integration of renewable energy sources. Through these efforts, Edison International is not only reducing its carbon footprint but also ensuring the grid is resilient, reliable, and ready to accommodate the increasing demand for clean energy.
In Q2, Edison (NYSE:EIX) reported a 9.5% increase in revenue, reaching $4.32 billion, along with a substantial 27.4% year-over-year rise in net income to $572 million. The company plans to achieve 2% to 3% load growth through 2028, with a projected 35% increase over the next decade. This growth is supported by the rising demand for electricity in California, driven by the electrification of various sectors, including transportation and manufacturing.
Edison (NYSE:EIX) is well-positioned to benefit from the expansion of data centers as the state of California leads the United States in data center capacity. Edison’s (NYSE:EIX) focus on integrating advanced technologies such as artificial intelligence (AI) to enhance grid reliability and predict power loads gives it a signifcant competitive edge in driving future growth. Edison (NYSE:EIX) is a compelling investment for investors seeking long-term value in the energy sector. As of September 2, Edison (NYSE:EIX) has a market cap of $33.60 billion. The company is expected to grow its earnings by 3.71% this year. As of the second quarter, the stock is held by 32 hedge funds with stakes worth $1.39 billion. Pzena Investment Management is the largest shareholder in the company with stocks worth $924.57 million as of June 30.
8. Sunrun (NASDAQ:RUN)
Number of Hedge Fund Holders: 35
Market Capitalization as of September 2: $4.58 Billion
Sunrun (NASDAQ:RUN) is one of the largest residential solar energy companies in the United States. The company’s solar-as-a-service solution allows homeowners to adopt solar power with little or no upfront cost.
In Q2 2024, Sunrun’s (NASDAQ:RUN) revenue increased by 14.33% to $523.87 million compared to the previous quarter and net income increased 258.37% to $139.07 million. Sunrun’s (NASDAQ:RUN) net profit margin reached 26.55%, a 179.75% rise compared to the same period last year. The company’s multi-channel strategy, which includes direct-to-consumer sales and partnerships with key organizations, allows it to efficiently capture a wide customer base.
This diversified approach not only drives customer acquisition but also strengthens Sunrun’s (NASDAQ:RUN) brand presence in a competitive market. The company’s primary focus is on lease and power purchase agreements (PPAs) and offers customers stable and predictable pricing by customizing solutions for individual homes. Sunrun’s (NASDAQ:RUN) integrated platform collaborates with sales and installation firms to enhance operational efficiency which positions Sunrun (NASDAQ:RUN) as a leading player in the residential solar market by enabling it to scale rapidly and deliver value in the solar value chain.
In the near term, Sunrun’s (NASDAQ:RUN) prospects are further bolstered by the increasing adoption of storage solutions. As more homeowners look to combine solar energy with battery storage which can support the company to generate substantial annual recurring revenues. Sunrun (NASDAQ:RUN) has also been investing in infrastructure and technology, which aims to enhance its margins and profitability as the company scales its operations and optimizes its business model. As of September 2, Sunrun (NASDAQ:RUN) has a market cap of $4.58 billion. The stock is held by 36 hedge funds with total stakes worth $694.88 million as of the second quarter. As of June 30, Orbis Investment Management is the largest shareholder in the company and has stocks worth $164.80 million.
7. Clearway (NYSE:CWEN)
Number of Hedge Fund Holders: 38
Market Capitalization as of September 2: $5.69 Billion
Clearway (NYSE:CWEN) has a diverse portfolio of wind and solar projects along with conventional power generation projects in the United States. Clearway Energy (NYSE:CWEN) has collaborated on projects with Global Infrastructure Partners (GIP), an independent infrastructure investment fund, and TotalEnergies (EPA:TTE), a multinational energy and petroleum to leverage its expertise in renewable energy capabilities in the United States.
The company is working on large-scale renewable energy projects in California such as Luna Valley and Daggett I which are expected to be completed by 2025. The Daggett Storage I Project is a 113.5 MW battery energy storage facility in San Bernardino County which has a 482 MW Daggett Solar + 394 MW Storage complex. Whereas, the Luna Valley Solar Project is a 200 MW solar project located in Fresno County, once completed, can provide enough electricity to power over 80,000 homes. These projects are supported by long-term contracts with investment-grade entities and are projected to deliver substantial earnings for the company.
Clearway’s (NYSE:CWEN) diversified portfolio and strategic focus on renewable energy assets position it well to capitalize on the ongoing trend of global energy transition and offer long-term growth potential. As of September 2, Clearway Energy (NYSE:CWEN) has a market cap of $5.69 billion. The stock is held by 38 hedge funds with stakes worth $139.80 million as of the second quarter. Point72 Asset Management is the largest shareholder in the company and owns stocks worth $25.10 million as of June 30.
6. Enphase (NASDAQ:ENPH)
Number of Hedge Fund Holders: 42
Market Capitalization as of September 2: $16.39 Billion
Enphase (NASDAQ:ENPH) is a global energy technology company that specializes in solar microinverters, energy storage solutions, and energy management devices. Enphase’s (NASDAQ:ENPH) microinverters convert direct current (DC) from solar panels into alternating current (AC) for use and are critical for optimizing solar energy systems, enhancing efficiency, and reliability, and are also easy to install. The company is a market leader in residential solar in the U.S. Europe and emerging markets in Asia.
Enphase (NASDAQ:ENPH) is strategically well-positioned to benefit from the U.S. Inflation Reduction Act (IRA) as the company’s microinverters can help customers qualify for a 10% Investment Tax Credit (ITC) under the Domestic Content Bonus Credit provisions of the Inflation Reduction Act which is available for solar projects that utilize a certain percentage of U.S.-made components. This advantage is expected to support the company in achieving higher sales and enhancing gross margins, particularly in Q4 2024.
In Q2, Enphase (NASDAQ:ENPH) reported revenue and earnings slightly below expectations due to low sales in Europe. However, it maintained a gross margin of 47.1%, surpassing expectations. Despite competition, Enphase’s (NASDAQ:ENPH) microinverter technology remains a top choice among consumers and is successfully capturing the market. The new net metering policy in California “Net Energy Metering 3.0” which incentivizes homeowners to consume their solar energy rather than selling it back to the grid led to a significant increase in its energy storage systems. In Q2 Enphase (NASDAQ:ENPH) reported a 32% increase in revenue from the United States and has already booked orders for 85% of the revenue in Q3.
Enphase (NASDAQ:ENPH) products including microinverters, energy management software, and battery storage solutions, are expected to drive further growth. Industry analysts have a consensus on the stock’s Buy rating, estimating an average share price target at $126.17, which represents a 7.55% upside potential from current levels. As of September 2, the company is valued at $16.39 billion. The stock is held by 42 hedge funds with stakes worth $505.91 million as of the second quarter. As of June 30, Citadel Investment Group is the largest shareholder in the company and owns stocks worth $141.66 million.
5. PG&E (NYSE:PCG)
Number of Hedge Fund Holders: 46
Market Capitalization as of September 2: $51.51 Billion
PG&E (NYSE:PCG) is a leading energy company in Northern and Central California’s utility market and serves more than 16 million people through its subsidiary, Pacific Gas & Electric Company. In 2023, PG&E (NYSE:PCG) had 100% clean electricity which came from a mix of sources: 53% from nuclear power, 34% from renewable resources like solar and wind, and 13% from large hydroelectric power. PG&E (NYSE:PCG) has also invested heavily in battery storage systems and has added over 2,100 megawatts of battery storage.
California leads the United States in data center capacity. Additionally, California has the highest per capita electric vehicle ownership in the U.S. with over 1.1 million EVs and more than 15,000 charging stations. PG&E (NYSE:PCG) has a strong position in California, especially in Silicon Valley. The Bay Area has a top-notch fiber network and a grid mostly powered by renewable energy, making PG&E (NYSE:PCG) an important player for data centers in the region. PG&E’s (NYSE:PCG) CEO, Patti Pope, mentioned in a Bloomberg interview that the company’s grid is currently underutilized, operating at 45% capacity. However, with advancements in modern computing, grid utilization is expected to increase to 80% by 2040, with power demand potentially doubling during this period.
Despite facing challenges such as higher electricity costs, PG&E (NYSE:PCG) is well-positioned to benefit from increased demand for energy, particularly from the EV and AI sectors. PG&E’s (NYSE:PCG) stock is trading at a forward PE of 14.52, a 15.75% discount to its sector, and analysts expect the company’s earnings to grow by almost 10% this year. As of September 2, PG&E (NYSE:PCG) has a market cap of $51.51 billion. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $21.75, which represents an 8.6% upside potential from its current level. As of the second quarter, the stock is held by 46 hedge funds with stakes worth $2.00 billion. Third Point is the largest shareholder in the company with stocks worth $938.47 million as of June 30.
4. First Solar (NASDAQ:FSLR)
Number of Hedge Fund Holders: 66
Market Capitalization as of September 2: $24.33 Billion
First Solar (NASDAQ:FSLR) is one of the largest solar companies in the United States and supplies thin-film photovoltaic (PV) solar panels to large-scale solar power plants. The company also has operations in Malaysia and Vietnam.
In Q2, First Solar (NASDAQ:FSLR) reported that its revenue increased 24.7% to $1.01 billion, and EBITDA rose 95% year-over-year to $470 million due to higher selling prices and improved gross margins. The company’s gross margin reached an impressive 49.4%. The company’s products are high in demand and have an order backlog till 2030. First Solar (NASDAQ:FSLR) is expanding its production capacity and recently completed the expansion of its Ohio plant. First Solar (NASDAQ:FSLR) is constructing new facilities in Louisiana and Alabama which are expected to nearly double its production capacity in the United States, and will position the company to meet the growing demand for solar energy in the United States.
First Solar’s (NASDAQ:FSLR) TOPCon technology is currently under the process of patenting and will enhance the efficiency of its solar panels. The royalties from the patent can also provide an additional revenue stream, which can further strengthen the company’s financial position. First Solar’s (NASDAQ:FSLR) is expected to grow its earnings by almost 55% this year. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price forecast at $292.22, which represents a 28% upside potential from current levels. As of September 2, First Solar (NASDAQ:FSLR) has a market cap of $24.33 billion. The company’s stock is held by 66 hedge funds as of the second quarter, with stakes worth $1.68 billion. As of June 30, Citadel Investment Group is the largest shareholder in the company and owns stocks worth $766.56 million.
3. Constellation (NASDAQ:CEG)
Number of Hedge Fund Holders: 71
Market Capitalization as of September 2: $61.5 Billion
Constellation (NASDAQ:CEG) supplies natural gas, and energy products and services. The company serves residential, commercial, and industrial clients across North America. Constellation Energy (NASDAQ:CEG) is a major player in nuclear power, and is committed to deliver clean and affordable energy. Constellation Energy (NASDAQ:CEG) contributes 10% of the total carbon-free energy consumed in the United States.
In Q1 2024, the company’s net income per share increased to $2.78 from $0.29 compared the same quarter in the previous year and adjusted operating earnings doubled from $0.78 to $1.82. Constellation (NASDAQ:CEG) plans to buy back $1.5 billion worth of shares, which reflects management’s confidence in the company’s long-term prospects. Constellation (NASDAQ:CEG) is expected to grow its earnings by 45.84% this year. Industry analysts have a consensus on the stock’s Buy rating, forecasting an average share price target at $225.03, which represents a 16% upside potential from current levels.
Constellation Energy (NASDAQ:CEG) issued a $900 million, 30-year corporate green bond during the first quarter for initiatives such as nuclear upgrades, clean hydrogen production, and energy storage systems, which will increase the production of clean, carbon-free energy. Constellation Energy (NASDAQ:CEG) has long-term contracts for the purchase of sustainable energy with major tech players such as Microsoft, Google, and Nucor Steel, which provides a stable, long-term revenue stream.
Constellation Energy (NASDAQ:CEG) plans to invest $800 million in upgrading equipment at the Byron and Braidwood nuclear plants in Illinois which will increase its energy output by 158 megawatts. Additionally, the company is investing $350 million to upgrade the Criterion wind project in Maryland, which will increase clean energy production by 79,000 megawatt-hours (MWh). In its second quarter investor letter ClearBridge stated the following regarding Constellation Energy (NASDAQ:CEG) in its Q2 2024 investor letter:
“On a regional basis, the U.S. and Canada was the top contributor for quarter, with U.S. electric utility Constellation Energy Corporation (NASDAQ:CEG) and U.S. rail operator CSX the lead performers. Constellation Energy is primarily a nuclear generation company and is the largest producer of carbon-free electricity in the U.S., serving states including New York, Illinois, Maryland, Pennsylvania and New Jersey. The company’s combined generation capacity is more than 32 GW and 90% of annual output is carbon free. Constellation has been a beneficiary of AI and subsequent power demand as its 24/7 base load nuclear generation can get premium contracts.”
Constellation Energy (NASDAQ:CEG) is well-positioned to capitalize on recent trend of renewable energy and presents a compelling opportunity for long-term investors. As of September 2, the company has a market cap of $61.5 billion. The company’s stock was held by 71 hedge funds in the second quarter, with stakes worth $3.78 billion. As of June 30, Coatue Management is the largest shareholder in the company and owns stocks worth $982.90 million.
2. NextEra (NYSE:NEE)
Number of Hedge Fund Holders: 73
Market Capitalization as of September 2: $165.47 Billion
NextEra is the world’s largest producer of wind and solar energy, as well as a leader in battery storage technology. NextEra’s subsidiaries, including Florida Power & Light, serve millions of customers, and the company’s investments in clean energy are helping to drive the transition to a low-carbon economy. The company has divided its operations into two primary businesses. The first is Florida Power & Light (FPL) which is an electric utility company. The second major business is NextEra Resources (NEER) which is the one of the world’s largest producer of renewable energy an a leader in battery storage. NEER focuses on developing, constructing, and operating long-term assets primarily in the United States and Canada.
The company has over two decades of experience in developing and operating renewable projects which gives it a significant competitive edge. The company held 56% of the wind market in 2022 and 38% of the renewable market share from 2019 to 2022. NEER operates a clean energy portfolio of approximately 34 GW of which 24 GW is derived from wind energy, 7 GW from solar energy, and 2 GW from nuclear energy. NEER also has 1 GW of battery storage capacity spanning across 16 states in the United States.
Nearly 93% of the company’s revenues come from long-term Power Purchase Agreements with data centers and tech companies which ensure stable and predictable cash flows. The company’s financial performance remains robust, adjusted earnings increased by 10.8% in Q2 2024, due to investments and a growing renewables portfolio. Looking forward, NEER anticipates its earnings per share (EPS) to rise by 6-8% annually till 2027 and plans to increase dividend payments by 10% annually. In its second quarter investor letter, ClearBridge stated the following regarding NextEra (NYSE:NEE):
“AI-related momentum was a key driver of performance in the second quarter, lifting the enablers in technology as well as holdings like renewable power producer NextEra, Inc. (NYSE:NEE) that supply the increasing energy needs of data centers. Parts of the market lacking an AI connection, like our medical device holdings, underperformed despite no change to fundamentals. We have managed through several similar momentum periods over our tenure and have delivered long-term results for shareholders by staying true to an approach that emphasizes diversification across three buckets of growth companies (select, stable and cyclical) and seeks to take advantage of attractive entry points into quality growth businesses.”
NextEra’s (NYSE:NEE) is valued at $163.56 billion as of August 20. The stock is held by 81 hedge funds with stakes worth $2.10 billion as of the second quarter. As of June 30 GQG Partners is the largest shareholder in the company and has stocks worth $884.56 million.
1. Vistra (NYSE:VST)
Number of Hedge Fund Holders: 93
Market Capitalization as of September 2: $29.35 Billion
Vistra (NYSE:VST) is a vertically integrated energy company based in Texas. The company focuses on a diversified energy portfolio and is involved in electricity generation, wholesale energy sales, fuel production, and logistics. Vistra (NYSE:VST) supplies electricity and natural gas to residential, commercial, and industrial customers. Vistra (NYSE:VST) also operates battery energy storage facilities and its nuclear assets play a vital role in supplying energy for artificial intelligence (AI).
As the demand for renewable energy particularly from AI and data centers is surging, Vistra (NYSE:VST) is exceptionally well-positioned to capitalize on this trend. In March 2024, Vistra (NYSE:VST) completed the acquisition of Energy Harbor, which expanded its nuclear capabilities by 4,000 megawatts and added approximately 1 million additional retail customers to its portfolio. Vistra (NYSE:VST) has also implemented AI technologies within its operations to increase the efficiency of its power plants, enhance thermal efficiency, and reduce carbon emissions. The company implemented the Heat Rate Optimizer (HRO) in almost 67 power-generation units across 26 plants which helped the company achieve an average 1% improvement in efficiency and company save millions in operational costs.
In their second quarter 2024 investor letter, Legacy Ridge Capital stated the following remarks regarding Vistra (NYSE:VST):
“One of the sectors we know well which had been out of favor for several years has quickly come into favor: Independent Power Producers (IPPs). We’ve written consistently about NRG and Vistra Corp. (NYSE:VST) since the 2019 letter, have owned each, or both, since 2018, and invested a meaningful amount of our assets in VST specifically the past few years. Nate and I intend on spending more time in the year-end letter on our updated views on the IPPs and our learnings from the on-going investment, but we were a bit surprised how quickly the narrative around these companies changed. Our Blue Sky 2030 estimates of intrinsic value converged with the share price 6-years before we thought probable.
For the quarter that ended on June 30, Vistra’s (NYSE:VST) operations net income, which reflects its core business activities, increased to $492 million from $409 million in the previous year. Additionally, the company’s Adjusted EBITDA increased by 40% to $1.41 billion compared to $1.0 billion for the same quarter in the previous year.
Vistra (NYSE:VST) is a strong contender for data centers in need of dependable and clean energy solutions. The company’s strategic investments in renewable energy, combined with its capability to harness AI and take advantage of market trends, offer an attractive opportunity for investors seeking to profit from the ongoing energy shift. Vistra (NYSE:VST) has a market cap of $29.35 billion as of September 2. The stock is held by 93 hedge funds with stakes worth $4.03 billion as of the second quarter. Lone Pine Capital is the largest shareholder with stocks worth $587.93 million as of June 30.
While we acknowledge the potential of Vistra (NYSE:VST) to grow, 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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