Key insights
- The author is weighing investment in Vistra (VST) and Constellation Energy (CEG), both energy providers with contracts with hyperscalers. VST has more upside but margin concerns in 2025. CEG has already run up and is politically sensitive. The author leans slightly towards CEG due to its 'green' energy profile, potentially favored by tech firms. The impact on the broader US market is limited, reflecting stock-specific analysis within the energy sector.
I have Vistra and CEG on my radar. Both have contracts with hyper scalers. Both have good rev, margins and rather high upside.
CEG - ran a lot already plus worse performance in bull markets, politically sensitive and a lot of good news is already priced in, beat Q1 massively
Vistra - huge upside, but margin collapse in 2025 is concerning, more energy mix, in Q3 their M&A deal is supposed to close if they pass regulatory approval
VST is primarily a gas company with a nuclear kicker. CEG is primarily a nuclear company with a gas kicker.
CEG bevause has more "green" energy might be the favorite child of tech firms, but still not sure which to pick.
And I know there are SMR but its super speculative so trying not to touch it.
Any ideas? Or maybe you have your own picks like Siemens Energy or GE Vernova?