We recently published a list of the 13 Best Energy Stocks to Buy Right Now. In this article, we are going to take a look at where Vistra Corp. (NYSE:VST) stands against other best energy stocks.
The worldwide energy industry has recently been rattled by a combination of factors, including the trade war sparked by President Trump’s tariffs, the prospects of a global economic slowdown, and the sharp slump in crude oil prices. As a result, at the time of writing this piece, the overall energy sector has fallen by 4.64% since the beginning of 2025, compared to declines of almost 3.6% by the wider market.
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The steep downturn in global crude prices has particularly hit hard, and there appear to be no signs of a reversal as of yet, since the supply is projected to increase while demand forecasts keep falling. The West Texas Intermediate (WTI) oil price fell to just over $57 a barrel earlier this week, a level it last hit during the peak of the COVID-19 pandemic in 2021. However, it has slightly recovered since then and is currently hovering just around the $61 mark, buoyed by hopes of a breakthrough in looming trade talks between the US and China. Still, the low prices and higher costs due to tariffs on steel and aluminum have pushed many American oil producers to put the brakes on drilling new wells.
However, the same cannot be said about natural gas and its liquified state, LNG, which has especially fared well under the Trump administration. On his very first day in office, the President ordered the resumption of LNG export approvals and has started rolling back environmental regulations that slowed projects. The United States is already the largest LNG exporter in the world, with a record 11.9 billion cubic feet per day of outflows in 2024. These numbers are now expected to receive a significant boost, as the US Energy Information Administration has forecasted the country’s LNG exports to 15.2 bcfd this year. Europe remains the top destination for American LNG, accounting for over 75% of total orders this year. The continent has had to rely significantly more on imported LNG and less on gas delivered via pipelines from Russia since the Putin government’s invasion of Ukraine in 2022.
The ongoing AI boom is also expected to be a significant growth factor for the natural gas industry, which has emerged as the leading contender to power its data centers. These energy-intensive facilities could consume as much as 9% of all energy generated in the US by 2030, and this energy needs to come from a relatively clean, flexible, and reliable source that is abundantly available in the form of natural gas. According to data from S&P Global Commodity Insights, if even a quarter of the projected data center load is supplied by gas-fired generation, this would translate to a 2% increase in total US gas demand in 2040.
The price of natural gas has more than doubled since March 2024, offering a significant lifeline for America’s oil and gas sector in the last quarter, especially with the plunging crude prices denting their profits.
Solar panel workers installing a new farm for clean energy generation.
Methodology:
To collect data for this article, we scanned Insider Monkey’s database of hedge funds’ stock holdings and picked the top 13 companies operating in the energy sector with the highest number of hedge fund investors in Q4 of 2024. The following are the Best Energy Stocks According to Hedge Funds.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Vistra Corp. (NYSE:VST)
No. of Hedge Fund Holders: 120
Topping our list of the Best Energy Stocks to Buy According to Hedge Funds is Vistra Corp. (NYSE:VST), the largest competitive power generator in the US with a capacity of approximately 41,000 MW.
Vistra Corp. (NYSE:VST) reported a net loss of $268 million in Q1 2025, but its adjusted EPS of $1.15 managed to top expectations by $0.37. The company’s revenue grew by 28.8% YoY to $3.93 billion, but still fell below estimates by $615.2 million. VST’s cash flow from operations surged 92% YoY to $599 million, but the company spent $768 million on capital expenditures, resulting in negative free cash flow of $169 million for the quarter. Despite this, the company had total available liquidity of approximately $3.9 billion at the end of Q1, including cash and cash equivalents of $561 million. Vistra has stated that it expects to return at least $2 billion in total to shareholders through share repurchases and dividends by the end of 2026.
Vistra Corp. (NYSE:VST) was held by 120 hedge funds in the Insider Monkey database at the end of Q4 2024, with Vanguard Group Inc holding the largest stake of over 43.3 million shares, valued at almost $6 billion.
ClearBridge Investments stated the following regarding Vistra Corp. (NYSE:VST) in its Q1 2025 investor letter:
“Volatility also created entry points to motivate our first purchase in the utility sector, Vistra Corp. (NYSE:VST), as well as reduce our underweight to the consumer discretionary sector with the addition of CAVA Group. Vistra is the largest competitive power generator in the U.S. with a 41 GW fleet of power plants diversified by geography and fuel sources. Long-term fundamentals of the deregulated power markets remain constructive with Vistra well positioned to benefit from continued tightening in its primary PJM (Pennsylvania, New Jersey, Maryland Interconnection) and ERCOT (Texas) markets. Pending regulatory clarity could also pave the way for additional power purchase agreements with hyperscalers and act as a positive catalyst for independent power producer stocks. These agreements, in combination with federal subsidies for nuclear plants, have the potential to improve visibility and lower earnings variability across the industry.”
Overall, VST ranks 1st on our list of the best energy stocks to buy right now. While we acknowledge the potential of VST as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than VST but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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