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Bull of the Day: Vistra (VST)

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Vistra Company Overview

Zacks Rank #1 (Strong Buy) stock Vistra ((VST - Free Report) ) is an integrated energy company based in the United States that supplies electricity and energy-related products to residential, commercial, and industrial customers. The company owns a diversified portfolio of power generation assets, including natural gas, coal, nuclear, solar, and wind energy. VST is committed to supplying power sustainably and cleanly and has made substantial investments in renewable energy and battery storage projects. In addition to its commercial business, Vistra offers retail electricity plans and services under its various brands.

Data Center Growth is Set to Explode

With the launch of OpenAI and Microsoft’s ((MSFT - Free Report) ) ChatGPT and Alphabet’s ((GOOGL - Free Report) ) Gemini large language models, 2024 was the year where artificial intelligence became mainstream. Cash-rich mega-cap tech stocks like Meta Platforms ((META - Free Report) ) are spending billions of dollars on Nvidia ((NVDA - Free Report) ) GPUs and data centers in what is becoming an AI “Gold Rush”. However, data centers require a plethora of electric power. Recall that the Electricity Reliability Council of Texas (EROC) was forced to pay bitcoin miner Riot Platforms ((RIOT - Free Report) ) more than $30 million to limit its electricity use during a heat wave late last year. In other words, the US electric grid is already at its limit. Meanwhile, data center energy demand is set to soar by triple digits by 2030 (according to the International Energy Agency (IEA).

VST: Explosive Top and Bottom-Line Growth

Utility juggernauts like VST are filling the void, and it’s showing up in their fundamentals. VST is one of the best growth stories on Wall Street, growing quarterly EPS by 326% year-over-year last quarter. Over the next two quarters, Zacks Consensus Estimates suggest that the growth will only accelerate.

Zacks Investment Research
Image Source: Zacks Investment Research

Relative Price Strength

The technical action in VST mirrors its fundamental momentum. VST shares are up a breathtaking 329% over the past year, drastically outperforming the S&P 500 Index’s 25%. Meanwhile, VST shows relative strength on shorter time frames.

Zacks Investment Research
Image Source: Zacks Investment Research

Friday, while the tech stocks were getting hammered, VST bucked the market weakness and gained nearly 4% as volume swelled to 75% above the norm.

Bottom Line

Vistra (VST - Free Report) is capitalizing on the surging demand for energy driven by the rapid expansion of data centers and the mainstream adoption of AI technologies. With a diversified portfolio that includes renewable energy investments and a commitment to sustainable power, Vistra has positioned itself as a key player in addressing the growing electricity needs.

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