We recently compiled a list of the Jim Cramer Talked About These 9 Nuclear Power and Quantum Computing Stocks. In this article, we are going to take a look at where Vistra Corp. (NYSE:VST) stands against the other nuclear power and quantum computing stocks.
Jim Cramer, host of Mad Money, recently cautioned investors about the risks of speculating in sectors like nuclear power and quantum computing, suggesting it could take a long time before these fields generate meaningful returns. While Cramer acknowledged the optimism that accompanies the start of each new year, he pointed out that sometimes the enthusiasm surrounding certain industries is misplaced.
“This year, I see two themes that I want to caution people about: nuclear power and quantum computing. Both have promise, someday, but that day is not, just not near enough to justify the current valuations for these stocks.”
He clarified that while he does not view quantum computing as a hoax, he considers the current expectations surrounding the technology to be overly ambitious. The market, according to Cramer, is setting a low bar for progress in this area.
READ ALSO 10 S&P 500 Stocks on Jim Cramer’s Radar and Jim Cramer Discussed These 7 Stocks
“Look, I believe in nuclear power, but when GE Vernova, the company that arguably has the most to gain from it, says discouraging things about an uptick in commercial nuclear power coming any time soon, when quantum computing seems very much in its infancy, well, I fear people will get hurt speculating on even the biggest companies, let alone the smaller ones.”
The outlook for quantum computing became more uncertain last week when Nvidia CEO Jensen Huang stated that “very useful” quantum computers are at least a decade away. During a Q&A at Nvidia’s Consumer Electronics Show Financial Analyst event, Huang suggested that 15 years might be an optimistic estimate, while 30 years could be more realistic. This timeline left little room for optimism among investors who had hoped for quicker breakthroughs.
Cramer acknowledged the speculative nature of these sectors but advised investors to be cautious and realistic about the potential for short-term gains.
“You can speculate of course, but please understand that, like at all New Years, the animal spirits are in play for a few stocks and I don’t want you to be trampled by wayward bulls with visions of riches in front of their greedy eyes. You own Rigetti?… Take some gains and then go out and buy yourself a nice cashmere sweater.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 2. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? 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).
Solar panel workers installing a new farm for clean energy generation.
Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 97
Cramer mentioned Vistra Corp. (NYSE:VST) and said:
“Right now, there are two utilities that generate a lot of nuclear power, Vistra and Constellation Energy, the latter of which just got a big contract with the feds, $1 billion, to expand a nuclear site. The big utilities are frantically trying to meet power demand generated by the data center revolution. I think these two stocks are now way ahead of themselves. They trade like they’ll be able to build many nuclear reactors next to the currently approved ones because siting won’t be difficult.
Oh, that’s true but building them will be. It takes ages to construct one of these things, big overruns. Constellation’s reopening a decommissioned Three Mile Island plant with Microsoft signing a contract for 20 years worth of power. That does sound great, but I think the process of restarting a dead nuclear power plant won’t be easy. But hey, at least Constellation and Vistra’s real, even if their stocks have gotten overextended.”
Vistra (NYSE:VST) is a prominent electricity retailer and power generation company. In March 2024, it acquired Energy Harbor Corp., adding 4,000 megawatts of nuclear power and 1 million retail customers to its zero-carbon generation and electricity business. Later, the company took a 15% minority stake in Vistra Vision, boosting its nuclear capacity by 970 megawatts and expanding its solar and energy storage capacity by 200 megawatts.
Additionally, Vistra (NYSE:VST) management has said that the company is in early talks with hyperscale data center operators about potential nuclear power uprates and new projects. The company also received important regulatory approval to extend the operational lifespan of the Comanche Peak Nuclear Power Plant. This approval allows the plant to remain operational until 2053, extending its original license by an additional two decades.
The Comanche Peak facility consists of two units, with a combined capacity of 2,400 megawatts. Since its opening in 1990, it has generated over 582 million megawatt-hours of clean, emission-free electricity.
Overall VST ranks 2nd on our list of the nuclear power and quantum computing stocks Jim Cramer recently talked about. While we acknowledge the potential of VST as an investment, 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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.