We’re going to examine our holdings in Vistra (VST) , a leading U.S. power producer based in Texas with a diverse portfolio of energy production including natural gas, nuclear, coal, solar, and battery storage. I would like to focus on Vistra’s nuclear production capacity as it pertains to the recently announced Stargate initiative , as well as the technical position of the stock to determine if inclusion in your portfolio is justified. (Note the stock was getting a lift on Thursday following comments by President Donald Trump at the World Economic Forum on speeding production of power plants for AI.) Looking at the daily chart of VST we can clearly see that the stock has come a long way in a short time. Is there enough ‘fuel left in the tank’ to justify a bullish outlook? I think so. The $168-$170 resistance level that was intact for the last 2 months was broken last week and can now be considered support (price floor). Notice the two above-average volume bars that occurred on strong positive days with the green and red annotations. Finally the stock broke the resistance level on the 3rd above-average volume day on January 21st annotated in black. Technically speaking, the stock should not face resistance until we reach the upper-end of the parallel channel between $225-$290 in the coming months. At Inside Edge Capital in our Tactical Alpha Growth (TAG) portfolio we hold a 1.5% allocation and will be looking to increase that on our next rebalance / reallocation coming up here shortly. Turning to the fundamentals, what could justify this high of a target price zone? Newly inaugurated President Trump announced “at least a $500 billion” (to use his words) investment in a newly formed initiative called “Stargate” formed from several private sector partnerships. Stargate will deploy those funds in infrastructure buildout tied to artificial intelligence and in fact, the work has already begun building data centers in Texas, with more projects set to come kick off. According to the International Energy Agency, AI data centers could account for up to 13% of global electricity demand by 2030 on the current trajectory. Research firm McKinsey & Company estimates that US data centers demanded about 25 gigawatts of power in 2023, but expected to increase to 80 gigawatts by 2030. This massive increase in power demand is causing many hyperscalers to explore nuclear as a reliable, clean, low-carbon emission source in the form of SMR’s or small modular reactors. Amazon, Google, and Microsoft are also investing in nuclear power sources. Vistra has been fortifying their nuclear power generation capability including a $3.2 billion dollar deal to acquire a 15% stake in a subsidiary firm, Vistra Vision. Vistra has the 2nd largest nuclear power fleet behind Constellation Energy (CEG) . The company made $3.59 in EPS for fiscal year 2024, which was a 35% increase from the prior year EPS of $3.59. Looking ahead to this year, analysts are expecting earnings 47% higher than 2024 of $7.14 Vistra executed ~$4.6 billion in share repurchases in the past 3 years and on Oct. 30, 2024, the board authorized an additional $1 billion for share repurchases through 2026. With the technical and fundamental assessment of this name, along with other ‘powerful’ names in the industry group, power generation companies should be considered in the portfolios for today’s growth-oriented investor -Todd Gordon Founder of Inside Edge Capital , LLC DISCLOSURES: (Gordon owns VST in his wealth management company Inside Edge Capital, LLC. Hd does not own CEG. Charts shown are MotiveWave.) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
