Vistra (VST)

Power will continue to be a bottle-neck in the AI build, and VST is best-positioned.

Striking deals with hyperscalers. Data centre buildout is inflationary for electricity prices, so this is a second-derivative play on AI. Good secular growth runway ahead.

Power/energy remains the biggest bottleneck in the AI buildout, and this trades at 17x PE.

Big US electric utility. Thesis:  demand for power in US outstrips supply for all kinds of reasons (especially data centres). Well diversified geographically. Good nuclear fleet. Contracts with hyperscalers.

Results were mixed, but outlook remains pretty good. Pullback is buyable.

Cash flow and earnings growth look very good here (based on consensus) and the stock is acting well and showing improved momentum. The sector remains of interest to investors, and with the growth of AI the whole sector's growth outlook has improved remarkedly. This interest (and good growth) has increased it valuation relative to historical levels, but so has its growth rate increased. We would be comfortable buying some, but with only a 0.48% yield if one is looking for income from the utility sector this would not be the choice.
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Power and energy. #2 performer on the S&P over the last year (after PLTR). US power demand for data centres is going from 5% of the total to 12%. So massive injection of power is needed, and nat gas is the solution until nuclear gets going (which will be a while). In Texas, where many data centres are gravitating. 

Outperformed peers, much of it due to acquisitions as well as to the AI and data centre buildout. That appetite for energy is only going to grow. Despite some concerns that we won't actually need all this power, this name should see fantastic cashflow generation going forward. So many acquisitions does bring the challenge of integrating them all.

Pullback is excellent entry. Second-derivative trade on AI revolution. Leading independent power producer in US, ~5M customers across 20 states. Half its business is in Texas, which is ground zero for power-hungry data centres. Yield is 0.7%.

Likely to sign an agreement with a hyperscaler. Power prices increasing. Can foresee upgrade to credit rating, which lowers cost of capital. Trades at a fairly undemanding 10-10.5x enterprise value to EBITDA.

Is awaiting clarity about DeepSeek's actual costs and the entire AI complex. Rallied on the data centre trade, until DeepSeek hit.

VST tanked over 28% today on news of China's DeepSeek stealing the AI crown from ChatGPT--DeepSeek is faster and cheaper. All AI-related stocks, including energy plummeted as the Nasdaq slid over 3%. It's a confusing situation that happened so suddenly that you have to sit on your hands and wait.

His biggest winner of the year, up 264%. He has not trimmed his holding. It still isn't expensive at 20x forward PE. Demand for energy to fuel AI will endure.

Of its energy sources, 60% is natural gas and 20% coal, but they have nuclear exposure and are making investments in renewables.

Shares have rallied 200%. Take some profits.

Profitable and never expensive. A top pick in nuclear power. Also likes Constellation Energy.

Is up 80% in the past month, the best S&P performer and hitting a new high today. Healthy profits and unique assets with secular growth from nuclear energy demand, which needs to fuel AI production. But Vistra is no longer cheap at 24x forward PE, so he expects it to consolidate.