Toward the end of the lightning round on August 12, a caller asked host Jim Cramer for his thoughts on Vistra Corp. (NYSE:VST) in light of David Faber’s comment on Squawk on the Street suggesting that a large portion of AI electricity projects may never materialize. Cramer pushed back against the notion, and said:
No, I like Vistra. I’m going to give a twofer. I like Vistra and I like Constellation Energy. I think these things are oversold, and they make a ton of sense. Constellation Energy, by the way, is a really fantastic company.
Vistra Corp. (NYSE:VST): Earnings Reality Meets the AI Narrative
Vistra Corp. (NYSE:VST) reported its second-quarter results with ongoing operations adjusted EBITDA climbing 31% year-over-year to $1.77 billion, due to stronger generation asset performance and higher realized capacity prices. However, headline numbers showed a $1.5 billion revenue miss at $4.02 billion, along with adjusted EPS of $1.68 missing consensus estimates.
Despite a short-term stock pullback from its highs, management reaffirmed full-year 2026 adjusted EBITDA guidance of $6.8 billion to $7.6 billion. Highlighting structural demand, both the PJM and ERCOT grids set new summer peak-load records in July, validating the thesis that power generation assets are operating in a tight market. Moreover, Vistra Corp. (NYSE:VST) is pushing deeper into digital infrastructure partnerships, such as its framework through Helix along with KKR and NVIDIA, to capitalize directly on data center demand.
Constellation Energy Corporation (NASDAQ:CEG): Locking in Multi-Decade Nuclear PPAs
Constellation Energy Corporation (NASDAQ:CEG) posted Q2 adjusted operating earnings of $2.55 per share, beating Wall Street expectations by $0.27, and raised its full-year 2026 adjusted operating guidance to a range of $11.50 to $12.50 per share. However, quarterly revenue came in soft at $7.5 billion, missing estimates by $130 million; the company’s long-term commercial profile remains exceptionally strong.
Constellation recently secured approximately 920 megawatts of new long-term nuclear power purchase agreements. Management outlined a clear path to compound base earnings growth by over 20% annually through 2029, driven by enterprise customers willing to pay a premium for 24/7 carbon-free baseload power to feed intensive AI workloads.
Valuations, Revenue Misses, and Regulatory Friction
Even though both power providers trade at reasonable forward multiples, with Vistra at a forward P/E of roughly 15.8x and Constellation Energy at 22.9x, it should be noted that they are no longer priced as deep-value, slow-growth legacy utilities, which places a heavy burden on continuous operational execution. Recent quarterly reports for both Vistra and Constellation featured top-line revenue misses relative to Wall Street consensus, reminding investors that high-level AI narratives do not always translate into immediate quarterly billing consistency. At the same time, Federal Energy Regulatory Commission (FERC) scrutiny over co-located data center power arrangements, along with complex interconnection queues in PJM and ERCOT, threatens to delay or complicate multi-billion-dollar supply agreements.
Institutional Sentiment and Market Skepticism
According to Insider Monkey’s data, smart-money positioning reflects steady institutional confidence heading into the middle of the year, with hedge fund holding positions in Vistra climbing to 106 in Q1, up from 102 in the previous quarter, and hedge fund holders in Constellation increasing to 79 in Q1 2026, up from 76 in the preceding quarter. At the same time, market skepticism remains modest across both names. Vistra Corp. (NYSE:VST) carries a short float of 2.99%, while Constellation Energy Corporation (NASDAQ:CEG) registers a short float of 3.29%. As long as hyperscalers continue racing to secure reliable 24/7 baseload generation for data center buildouts, both companies remain fundamentally positioned at the center of the structural AI power trade.
While we acknowledge the risk and potential of VST and CEG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VST and CEG and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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