Why Vistra (VST) Stock Is Tumbling Today

Insider Monkey
02-28

Vistra (VST) is sinking 8% despite reporting higher than expected fourth-quarter revenue. The company also noted that the 2o24 adjusted EBITDA of its ongoing operations had come in well above the midpoint of its previous guidance range. It appears that worries about Nvidia's (NVDA) outlook may be dragging down VST stock today. Vistra operates nuclear power plants, along with solar, natural gas, and coal electric-generating systems. The Highlights of Vistra's Financial Results and Guidance VST's Q4 revenue jumped 16.5% versus the same period a year earlier to $17.2 billion. The latter figure was $70 million above analysts' average estimate. For all of 2024, the EBITDA of VST's ongoing operations, excluding certain items, came in at $5.656 billion. That was $856 million above the midpoint of the guidance range that it had provided last May. In 2025, VST predicts that the EBITDA of its ongoing operations, excluding certain items, will be $5.5 billion to $6.1 billion. Disappointment About NVDA's Outlook Could Be Dragging Down VST Nvidia delivered stronger-than-expected fourth-quarter results yesterday after the market closed, but its adjusted Q4 gross margin dropped versus Q4 of 2023. Its Q4 adjusted gross margin was also lower than that of the previous quarter. Moreover, the chip maker expects its gross margins to fall further as it continues to roll out its new Blackwell chips. Worries about Nvidia's outlook are causing NVDA stock to decline today and could also be contributing to the decline of VST stock. That's because Nvidia sells a large amount of chips to data centers and VST is widely seen as a play on increased electricity demand that will be triggered by the proliferation of data centers. While we acknowledge the potential of VST, 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  but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock Disclosure: None. This article is originally published at Insider Monkey.  

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