It didn’t take long for shares of Texas-based power generation firm Vistra (NYSE:VST) to make new highs again after its spring and summer breather. After melting up violently since the start of September, VST stock is now the biggest gainer in the S&P 500, beating out the great AI chip maker Nvidia (NASDAQ:NVDA) for the top spot. Of course, only time will tell which red-hot momentum stock walks away on top once the year comes to a close.

With VST shares now up close to 321% in the past year (or 248% year to date), the name has regained the attention of Wall Street traders. Much of the melt-up can be attributed to the company’s impressive quarterly results and the Nuclear Regulatory Commission’s approval to keep operating with its Comanche Peak Nuclear Power Plant. Indeed, it was a big win for Vistra. The latest approval will allow Vistra to operate its plant through 2053, causing shares to shoot up by double-digit percentage points on the news.

Undoubtedly, nuclear energy seems to be a clean solution to meeting the growing power needs of energy-hungry AI data centers, which are like normal data centers but on steroids. As the company continues to steer towards ambitious renewable energy projects while embracing new technologies to enhance operational efficiencies, it should be no surprise as to why VST stock is a market darling once again.

Key Points About This Article

• Vistra stock just became the S&P 500’s biggest year-to-date winner again.
• Many big names on Wall Street still like the stock. Its impressive nuclear power portfolio is a reason why.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Jim Cramer Gives His Thumbs Up for VST Stock

Despite the extended shares, many big names on Wall Street continue to view Vistra as a winner with what it takes to keep winning. Even Mad Money host Jim Cramer thinks that Vistra “has no quit in it” and that “it’s just the best.” I couldn’t have said it better myself.

Though Vistra does have a higher bar set ahead of it following an impressive quarterly showing that saw results power comfortably ahead of the expectations of many, I certainly wouldn’t be surprised if Vistra continues leaving the market behind. Despite the run, Vistra is moving forward with its share buyback plan, aiming to achieve a total of $2.25 billion worth of repurchases in 2024 and 2025, with around $1 billion in 2026.

Only time will tell if such buybacks will prove well-timed. Buybacks are only a good thing when shares are undervalued. And after more than quadrupling in a year, I’d argue that it’s a better idea to put the cash to work on more renewable power projects. Either way, VST stock’s latest winning streak has to be tempting a lot of investors to add to a position on strength.

Vistra Stock is Getting Pricier 

The stock currently trades at 98.1 times trailing price-to-earnings (P/E), which seems obscenely expensive on the surface. However, when you dig deeper into the company’s growth narrative, it should become apparent that the firm is a prime player in feeding the power needs of the AI big data centers that will be going up in the coming years.

The company has made four smart nuclear power acquisitions so far this year, bolstering the firm’s already impressive clean energy portfolio. On a forward-looking basis, shares trade at just 19.2 times next year’s expected P/E. A case could be made that VST stock is still too cheap to pass up here as it continues wheeling, dealing, and getting all the green lights.

Back in September, Jefferies started VST stock as a Buy, going as far as to call the name its top pick in the power sector. Analyst Julien Dumoulin-Smith thinks there are “many ways to win” for the firm and that the nuclear portfolio is well-equipped to meet the opportunity at hand. I think Jefferies is right on the money to stick with Vistra.

So, Is VST Stock Still a Buy?

As is the case with any stock that’s in full-on melt-up mode, waiting for a near-term pullback can be prudent. Though I’m not against holding onto shares at more than $132 per share, I do think new buyers should wait patiently for an entry point. The strong nuclear power portfolio and recent approval from regulators seem mostly baked in already. Personally, I’d look to $105 per share as a potential place to step in as a buyer.

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