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An Old-Economy Stock To Play A New-Market Theme


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Stock Deep Dive: Vistra Corp (VST-US, $35.5B)

More reports are out each week on a theme taking the market by storm.

The insatiable energy demand of data centers is driven by artificial intelligence adoption.

With an aging US power grid, investors are figuring out how to satiate this coming demand spike.

All this research leads to the same conclusion: WE NEED MORE POWER.

Innovative problems sometimes need old market solutions. This week’s pick is a tale of that story.

This week’s pick has also been on an absolute tear and just got included in the S&P 500 on the same day they blew earnings out of the water. Let’s Dive In!

  • Why Now? 👉 Direct Play on Data Centers

  • Overview 👉 What Does Vistra Corp Do and How Do They Make Money?

  • Demand Trends 👉 Accelerating Load Growth

  • By The Numbers 👉 Key Metrics

  • Risks 👉 Potential Pitfalls

Why Now? 👉 Direct Play on Data Centers

When thinking about energy demand, there are always more buttons to push than a control panel in a spaceship.

What I focus on instead is new themes of incremental demand. Incremental demand can drive a narrative; no narrative is louder than AI.

While I recognize many other moving pieces to this story, one of the bullish narratives concerns the incremental demand that data centers require.

Data center electricity consumption in the US is estimated to grow from 2.5% of total consumption today to 7.5% by 2030.

Sources: (Left) CEG, Boston Consulting Group (right) AES, McKinsey & Co.

Of this increase, it is also estimated that 50% will be met with gas, 25% with solar, and 25% with wind. In this scenario, approximately $50-75B in investment will be needed to satisfy generation, transmission, and distribution needs through 2030.

In addition to these sources, companies are becoming much more receptive to nuclear. In March this year, Amazon bought a $650M nuclear-powered 960-megawatt data center campus.

Vistra is one of the largest competitive power generators in the U.S., with ~41 GW of capacity, focusing on gas and 5.4 GW of nuclear generation, making it the country's second-largest producer of unregulated nuclear energy.

Overview 👉 What Does Vistra Corp Do and How Do They Make Money?

Vistra Corp is an integrated retail electricity and power generation company based in Texas, USA. Vistra's integrated business model means it operates across retail electricity sales that sell directly to end-users and power generation sold into the wholesale market. This vertical integration helps manage costs, optimize operations, and stabilize revenue streams.

Vistra is also classified as an Independent Power Producer (IPP). IPPs are non-utility generators typically not owned by the national electricity company or public utility. IPPs generate electricity for sale to the national electricity network. This classification allows Vistra to operate flexibly within competitive electricity markets and capitalize on market opportunities to maximize revenue from its generation assets.

Retail Electricity Sales:

Vistra provides electricity and related services to residential, commercial, and industrial customers. It operates under various retail brands, with TXU Energy being one of the largest in Texas. The company earns revenue by selling electricity and energy-related services, including energy efficiency programs and demand response services.

Through the retail segment, the company is one of the largest competitive residential retail electricity providers in the U.S. The Retail operations serve approximately 4 million customers across 20 U.S. states. The most significant portion of the retail operations is in Texas, where the company provides retail electricity to approximately 2.5 million customers.

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