The stock market is more divided than ever: AI winners explode, losers are punished. Where does Vistra?
A market in a state of emergency
The stock market is currently more divided than ever before. The S&P 500 is at an all-time high and at the same time more than half of all stocks listed in the USA are trading below the SMA 200. To reach the SMA 200, the S&P 500 would have to fall to 5,300 points.
On the one hand, there are the AI winners, above all hardware manufacturers such as Nvidia, Micron and Seagate. On the other side are the presumed AI losers in the software environment such as Wix and Salesforce.
One side has gone completely through the roof and investors are wondering whether they should still buy now. The other side has crashed completely, but in some cases the entire business model is up for discussion.
That's why I'm currently seeing many investors at a loss. Many don't really know how to deal with this situation.
One possible solution to this problem is to identify laggards or as yet unknown AI winners. This involves enormous effort, but we may have found a candidate in Vistra.
In the right place at the right time
The investment case for Vistra could hardly be simpler. The company is in the right place at the right time: In Texas and the Permian Basin. A very special constellation of different factors come together here, all of which are positive for Vistra.
Vistra owns power plants that are primarily operated with natural gas, in particular so-called combined cycle natural gas power plants. These power plants are efficient because they use both the waste heat from the gas turbine and a steam turbine to generate electricity. Vistra sells the electricity it generates on the wholesale market, where electricity suppliers or other market participants can purchase it.
The company also operates 4 nuclear power plants with a total of 6 reactors.
Vistra also sells electricity directly to end customers, i.e. households and companies. The company is responsible for billing and customer service. However, Vistra does not own any transmission assets.
This means that it does not transport the electricity itself via high-voltage lines, but relies on existing grid infrastructure.
Texas as the ideal location for the boom
Vistra Corp. primarily produces electricity from gas. And gas costs virtually nothing in the Permian Basin.
Gas is a by-product of the fracking business in the Permian Basin. It could also be described as a waste product, as far more gas is produced than is needed.
As paradoxical as it may sound, in the Permian Basin it was normal for customers to pay nothing for the gas itself, but only for transportation via pipelines and tankers.
As a result, the industrial price for gas in Texas is a fraction of that in Europe.
The gas price for industry in Texas was recently USD 3.10 per 1,000,000 BTU. In Europe it is USD 16 - 19.
This in turn means that a number of companies have chosen Texas as the location for their data centers. This also applies to other energy-intensive companies.
Texas has no corporate or income tax at state level and nothing that would be considered bureaucracy or regulation in Germany.
The demand is exploding
As a result, more and more companies are setting up in the region, which is driving economic growth and in turn leading to an influx of people.
Texas and the Permian Basin are among the fastest growing regions in the USA, both in terms of economic and population growth.
As a result, the hunger for energy is constantly increasing and Vistra is all too happy to serve it.
As a result, Vistra's earnings have multiplied in recent years from USD 1.36 to USD 6.98 per share and the share price has skyrocketed.
However, after earnings fell to USD 2.18 per share last year, the share price also collapsed.
At first glance, this makes sense: falling profit, falling share price.
In reality, profits have fallen mainly because the company has invested significantly more money in growth and infrastructure. This includes new energy plants, maintenance of existing power plants and expenditure on fuel and grid infrastructure.
Of course, these investments were announced. However, as some of the quarterly results fell short of expectations, this was enough to cause the share price to plummet from around USD 220 to below USD 140.
Jump in profits and setback
The fact that the trend has long since reversed seems to have been ignored. After Vistra was in the red in the first half of 2025 due to investments, a profit of USD 2.29 per share was achieved in the second half of the year.
In the first quarter, earnings of USD 1.74 per share were well above expectations of USD 1.32. With sales of USD 5.64 billion, analysts' estimates of USD 5.22 billion were also exceeded.
It therefore seems plausible that Vistra's earnings could more than quadruple this year to around USD 9 per share.
Vistra therefore has a forward P/E of 15.
Vistra's own outlook also fits in with this. The company is forecasting EBITDA of USD 6.8 - 7.6 billion and free cash flow of USD 3.93 - 4.73 billion for the current financial year.
This would correspond to FCF of at least USD 11.66 per share
Vistra share: chart from 20.05.2026, price: USD 134.71 - symbol: VST | source: TWS
The share has returned to the multi-year upward trend. At this point, the bulls are under pressure. If the upward trend is broken, further price losses towards USD 120 or USD 107 would be possible.
If a breakout above USD 145 is successful, a procyclical buy signal with a possible price target of USD 166 will be issued.
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