Electric utility Vistra Corp. (VST) has surpassed microchip giant Nvidia (NVDA) to become the top performing stock in the benchmark S&P 500 index this year.
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VST stock ascended to the top of the S&P 500 as it has risen 230% this year and 300% in the last 12 months. Nvidia’s stock has fallen to second place on the benchmark index with a 140% year-to-date gain. Utility stocks such as Vistra have been gaining ground in recent months as demand for electricity generation soars in the U.S.
The third best-performing stock in the S&P 500 index this year is another utility, Constellation Energy (CEG), whose share price has increased 130% on the year. Other energy companies whose stocks are among the top 10 performers in the S&P 500 index this year include GE Vernova (GEV), NRG Energy (NRG), and Targa Resources (TRGP).
AI Data Centers Fuel Energy Demand
Energy stocks are hot right now as electricity demand skyrockets with the growth of power-hungry artificial intelligence (AI) data centers and cloud-computing infrastructure. The U.S. Energy Information Administration (EIA) has forecast that power consumption in America will rise to record levels both this year and in 2025, driven by AI and cloud computing.
Demand for electricity has gotten so intense, that Constellation Energy recently announced that it is partnering with Microsoft (MSFT) to restart a nuclear reactor at the infamous Three Mile Island facility in Pennsylvania, cite of the worst nuclear accident in U.S. history. Constellation plans to sell the power it generates at Three Mile Island to Microsoft for use with the technology company’s AI applications.
Is VST Stock a Buy?
Vistra stock has a consensus Strong Buy rating among six Wall Street analysts. The rating is based on six Buy recommendations issued in the last three months. There are no Hold or Sell ratings on the stock. The average VST price target of $108.17 implies 14.69% downside risk from current levels.
