- Vistra Corp. leads the S&P 500 with a 216% gain in 2024, driven by clean energy demand.
- Vistra acquired four nuclear power plants earlier this year to help boost its clean energy profile.
- Nuclear-plant power “matches well with data centers’ constant energy needs,” Morningstar said.
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The best-performing stock in the S&P 500 so far this year isn’t AI stalwart Nvidia.
It’s a utility company you’ve probably never heard of: Vistra Corp.
With a year-to-date gain of 216%, Vistra’s valuation has soared to about $42 billion this year as investors clamor for exposure to the clean energy provider.
The power generation company sells wholesale electricity to various markets from California to Maine.
Vistra is unique from most other utilities because it operates in unregulated power markets. Thus, it’s not beholden to strict price controls that regulators often set in regional utility markets, which are typically controlled by one dominant player.
That has given Vistra the flexibility to capitalize on the immense power demand coming from AI-driven data centers around the country.
“Nuclear plants’ year-round, low-cost, emissions-free power matches well with data centers’ constant energy needs,” Morningstar strategist Travis Miller said in a note last week. “It is well-positioned to benefit from the increasing electrification of the economy and potential electricity demand growth from data centers.”
To meet that demand, Vistra has been focusing on generating clean energy via nuclear power plants.
Vistra closed its acquisition of Energy Harbor Corp. in March for $3.4 billion, giving it control over four nuclear power plants that generate a combined 6,400 megawatts of power.
Miller said three of those four nuclear power plants are “good candidates” for a deal with a data-center company, similar to the deal Constellation Energy announced with Microsoft earlier this month.
On top of the surging demand for its electricity thanks to AI data centers, Vistra stock is also benefiting from a decline in interest rates, as it lowers the cost of capital for what is viewed as a capital-intensive industry.
Vistra’s gains far outpace the second-best performing S&P 500 stock this year, Nvidia, which is up 138%.
Coincidentally, the third best-performing stock in the S&P 500 so far this year is Constellation Energy, which has surged 126% year-to-date.
Like Vistra, Constellation Energy is an unregulated utility that is using its fleet of nuclear power plants to help fuel the electricity demand coming from AI data centers.
Meanwhile, the overall Utility sector is the best-performing sector so far this year, rising nearly 30% year-to-date.