You can’t talk about the AI revolution without talking about the growing energy demand it has created. In particular, nuclear energy has returned to the spotlight. There are two reasons why now is a good time to buy shares of a power generation company. vistra (NYSE: VST)and it has to do with two technological giants.
Last week, Vistra announced that Metaplatforms (NASDAQ: META) had signed a 20-year power purchase agreement involving three nuclear plants owned by Vistra. This isn’t just talk from Meta leader Mark Zuckerberg; This is a real investment that will have a positive ripple effect for energy investors.
More than a year ago, NVIDIA (NASDAQ: NVDA) CEO Jensen Huang made comments about how necessary nuclear power would be and a “wonderful path forward.” The demand for energy is so immense that Huang also analyzed how all forms of energy will be needed. This is even better news for Vistra investors, as the company owns and operates nuclear, natural gas, coal and solar generation facilities, as well as battery energy storage facilities.
Vistra’s ability to rise to the occasion through dispatchable generation, which can rapidly ramp up and down to meet needs in real time, means the company is able to meet data center needs. The demand for electricity is increasing rapidly. 12% of US electricity consumption is expected to come from data centers by 2028. That’s three times more than 2023 alone.
Vistra stock is trading with a forward price-to-earnings (P/E) ratio of just below 18 and an enterprise value-to-EBITDA ratio of 15. Not only do I think Vistra is fairly priced right now, but I would anticipate strong growth for Vistra in the coming years. The company revised its guidance upward in its early November earnings report. As an added bonus, Vistra has also rewarded shareholders with quarterly dividends since 2019, although it currently yields less than 1%. For investors who want to find a way to ride the energy wave through a proven entity, Vistra is worth a look.
Before you buy shares in Vistra, consider this:
He Varied and Dumb Stock Advisor The analyst team has just identified what they believe are the 10 best stocks for investors to buy now… and Vistra was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.