Vistra's shares hit a record $175 on Tuesday as utilities gained on AI-related energy demand and a sector-wide recovery.
Vistra Corp. (VST) stock climbed over 5% in mid-day trading on Tuesday, reaching an all-time high of $175 amid a broad recovery in the utility sector. The stock surpassed its previous high of $169.19, set on January 9.
The Utilities Select Sector SPDR Fund (XLU), a key industry benchmark, also rose 0.74% during the session, reflecting optimism across the sector.
The stock was among the top trending tickers on Stocktwits.
According to Koyfin, Vistra’s rise has outpaced analysts’ consensus price target of $161.46, with the highest target set at $231.
Vistra’s shares are currently rated as a ‘Strong Buy’ on average by 15 analysts covering the stock.
After finishing 2023 as the weakest-performing sector in the S&P 500, utilities rebounded sharply in the latter half of 2024.
Analysts at Fidelity Investments project utilities to grow 6% to 8% annually over the next decade after experiencing “anemic power demand growth” of 1% to 2% annually for the past decade.
Fidelity largely attributed the resurgence in utility stocks to rising energy demand driven by artificial intelligence (AI). The power requirements of AI computing infrastructure have shifted market perceptions of the sector, turning it into a growth story after years of stagnation.
On Stocktwits, retail sentiment around Vistra remained in the ‘bullish’ zone as chatter saw an uptick to ‘high’ from ‘normal’ levels a day ago.
One user on the platform said that the reason they’re bullish on the utility’s stock is because it’s among Morgan Stanley’s top picks for the year.
Another noted the stock’s impressive performance, which has seen a 339% gain over the past year.
Some speculated that bearish sentiment in the broader market, linked to CPI inflation data due tomorrow, may have capped Vistra’s potential price gains.
The utility sector’s revival comes at a time when energy infrastructure is increasingly seen as a critical enabler for emerging technologies like AI.
As utilities integrate into this evolving landscape, companies like Vistra are positioned to benefit from both the demand growth and increased investor interest.
According to Barron’s, Vistra may be a better bet than its peer Constellation Energy Corp. (CEG) – which recently acquired Calpine and received a slew of price target hikes from Wall Street – since it owns both natural gas and nuclear assets.
The report said that Vistra could benefit from the same trends that are helping Constellation, and it offers a slightly less lofty entry point.
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