Cramer’s Morning Thoughts: 20 Stocks to Watch

6. Vistra Corp. (NYSE:VST)

Number of Hedge Fund Investors: 92

Morgan Stanley raised its price target for Vistra Corp. (NYSE:VST) from $110 to $132, citing the company’s role in using nuclear power to support AI technology. The latest Morning Thoughts post noted that this upgrade highlights the growing connection between energy companies like Vistra Corp. (NYSE:VST) and the expanding AI industry.

“Morgan Stanley raised Vistra to $132 from $110 on nuclear powering AI.”

Vistra Corp. (NYSE:VST) has a strong case for investment, driven by its solid financial results and strategic focus on clean energy. In Q2 2024, Vistra Corp. (NYSE:VST) achieved an impressive EBITDA of $1.2 billion, thanks to rising demand and higher electricity prices. Vistra Corp. (NYSE:VST) is committed to cutting its carbon emissions by 80% by 2030, which aligns with growing regulatory pressures and public demand for cleaner energy sources. Vistra Corp. (NYSE:VST)’s diverse mix of assets, including natural gas and renewable energy, positions it well to take advantage of market fluctuations in energy prices.

As demand for electricity rises, especially with more people shifting to electric vehicles and electric heating, Vistra Corp. (NYSE:VST) is well-equipped to benefit from this trend. Additionally, with a strong financial position, Vistra Corp. (NYSE:VST) is in a good spot to pursue potential mergers and acquisitions, which could further boost its market presence. Vistra Corp. (NYSE:VST) has also been proactive in returning value to shareholders, recently announcing a dividend increase, reflecting its confidence in generating strong cash flow. The completion of new solar projects, which add 1 GW of renewable capacity, highlights Vistra Corp. (NYSE:VST)’s commitment to expanding its clean energy portfolio.

Meridian Hedged Equity Fund stated the following regarding Vistra Corp. (NYSE:VST) in its Q2 2024 investor letter:

“Vistra Corp. (NYSE:VST) is an integrated retail electricity and power generation company with operations across 20 U.S. states and Washington D.C. We identified Vistra as a likely beneficiary of the projected growth of power-hungry data centers, spurred by the rise of generative AI, increasing electricity demand, and higher power prices. The stock performed well after the company delivered stronger than expected earnings. Management also provided forward guidance that exceeded investors’ expectations and reaffirmed shareholder-friendly plans for sizable share repurchases through 2025. We trimmed our position in the quarter following the strong performance and continue to see strong long-term prospects for the company.”