I think $VST looks compelling here. At $138, Vistra feels like one of the cleaner ways to play the AI/data center power trade without paying a large multiple. The numbers: - Q2 adjusted EBITDA: $1.77B, +31% YoY - 2026 EBITDA guide: $6.8B-$7.6B - 2026 FCF before growth: $3.9B-$4.7B - 2027 core EBITDA opportunity: $7.4B-$7.8B - Shares outstanding down ~30% since 2021 The obvious bottleneck continues to be energy and it seems like $VST is attacking that head on: - AWS signed a 20-year deal for up to 1.2 GW from Comanche Peak. - Meta signed 20-year agreements covering 2.6+ GW across Vistra’s nuclear fleet. Roughly 3.8 GW tied to AWS + Meta alone. Then there is also Helix, the AI infrastructure platform with KKR, NVIDIA and KIA. Vistra is the preferred power provider for this. VST is also acquiring Cogentrix, adding ~5.5 GW of gas generation, with the deal expected to be accretive to FCF/share starting in 2027. The valuation is compelling: At $138: ~13-15x forward EPS ~9-10x 2026 EV/EBITDA ~8x 2027 EV/EBITDA ~10-11x 2026 FCF before growth Meanwhile $CEG trades closer to ~22x forward earnings and ~14-15x EV/EBITDA. I don’t think VST deserves CEG’s full multiple, but the gap looks wide given how much exposure VST has to the same nuclear/power scarcity theme. At the same time, CEG has almost the same amount of debt as VST at $19B. CEG has much more hyperscaler exposure so it deserves a higher premium, but it seems likely for VST to be rerated on solid execution. The risks: - Merchant power prices can weaken - Debt/leverage is meaningful - Nuclear outages/regulatory issues can hurt earnings - AI power demand is already a crowded theme - Heavy hedging limits near-term upside from higher spot power prices - Cogentrix/Helix still need to execute - More generation or slower AI capex could reduce the scarcity premium The risks are important here but they are mainly tied to regulation/execution, the underlying thesis is that energy continues to be a huge bottleneck. What I also like is that you don’t need some crazy AI multiple for this to work and deliver returns from here as the stock is already down 15% YTD: - Bear: $110 7x EBITDA / ~$7B EBITDA - Base: $185 9x EBITDA / ~$8B+ EBITDA - Bull: $240 10-11x EBITDA / ~$9B EBITDA $VST has $1.22B remaining on its buyback authorization and 336M shares outstanding, after repurchasing $778M of stock in 2026 and $6.5B since November 2021, helping reduce its share count by roughly 30% since 2021. That’s actually interesting now because the stock is around $138 so if management keeps allocating FCF to repurchases at these lower prices, every $1B of buybacks would retire roughly 7.2M shares, or a little over 2% of the current share count. Finally, Peter Thiel bought $59M of it in Q2 and David Tepper added to his position by 10% making it now worth 4% of his portfolio with a $350M position size. I took a small starter position today to keep track of it as I'm still doing DD but it does feel more compelling than not.
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