Hi everyone!
A few weeks ago I made a post about an AI hadware stock i liked, Penguin Solutions, and just yesterday it ran after earnings. So, I took some profit and put it into another AI hardware company I like and think is undervalued: Vistra Corporation, ticker VST.
First of all, I have to say I got interested in this stock bc it is one of the favourites of our stock market queen Nancy Pelosi. Her husband (in her behalf) purchased around 1M dollars worth of calls on this company, and it is now trading below the price it was when they bought. And they are not alone: 5 congress members have stakes in this company.
Now for the stock analysis.
Vistra is an energy company. That's it. They power houses across the southern US, especially Texas. They have two divisions: "retail" energy and "data center" power. They have been agressively expanding into the data center market, with the acquisition of cogentrix and (most importantly) signing deals with Amazon and Meta, the Kuwain Sovereign fund (lol) and others.
They blew out Q1 earnings, posting an EPS of 2,87. That places the company at a forward PE of around 15 (or lower), and a PEG ratio of 0.5. My thesis is clear: data centers need energy, and while companies like BE can provide some of that power, traditional energy providers will have to take the majority of that task. Another tailwind i think there is is that energy consumption worldwide will keep increasing due to more extreme temperatures, electronic devices and, of course dats centers.