One stock, from a super important sector – which for a while seemed to interest no one – is that so?
Let's talk about Vistra Energy $VST
Let's start with the legendary investor, one of the pioneers of investing in Facebook – Peter Thiel
Peter Thiel returned in the second quarter to invest in Vistra – and in a big way
Thiel purchased 372,755 shares of the company worth approximately $59,000,000
This is a position representing about 14% of his reported portfolio – a very significant weighting for a company that was previously part of his investments.
And he is certainly not the only one increasing exposure to the stock.
Super investor David Tepper also continued to buy the stock in the last quarter,
Congresswoman Nancy Pelosi also increased her exposure – and we found that even Vistra's CEO recently made an insider trade and purchased shares (we reported this in real-time in detail on our premium channel), and several institutional investors continued to increase their holdings.
So what do they see there?
Probably the same story that is becoming increasingly significant in the world of artificial intelligence:
The next bottleneck for AI could be electricity.
We are talking about data centers that require enormous amounts of electricity – and at an increasing rate.
And this is where Vistra comes in.
The company holds long-term power supply agreements with tech giants like Amazon's AWS and Meta, for a combined capacity of approximately 3.8 gigawatts.
At the same time – it continues to add capacity, benefits from the growing demand for electricity, and is conducting share buybacks.
Meaning – instead of investing directly in companies developing AI chips or software, one can look at who supplies one of the most critical resources that allows this entire infrastructure to operate.
And here is perhaps the most interesting part:
The company $VST trades at around 13x forward earnings.
Think about that for a moment...
A company benefiting from the trend of dramatically increasing demand for electricity from data centers, with long-term contracts with tech giants – trades at an earnings multiple significantly lower than the multiples of quite a few companies directly associated with the AI revolution.
Of course, a low multiple does not mean a stock is cheap, and there are also regulatory risks, electricity prices, capital investments, project execution, and the ability to translate AI demand into actual growth.
But the math is simple:
AI needs chips -> chips need data centers -> data centers need electricity -> and the demand for electricity could become one of the biggest bottlenecks of the entire AI revolution.
And if this is indeed the direction – could Vistra be one of the ways to gain exposure to the physical infrastructure behind the AI revolution?
We are monitoring this