The author considers $VST (Vistra) compelling at a price of $138, noting it is down 15% year-to-date and offers exposure to the AI and data center power trade with several large multi-gigawatt deals signed with AWS and Meta.

Valuation metrics for $VST include:

• 13-15x forward EPS
• 9-10x 2026 EV/EBITDA
• 8x 2027 EV/EBITDA
• 10-11x 2026 free cash flow before growth

In comparison, $CEG trades at roughly 22x forward earnings and 14-15x EV/EBITDA, with both companies holding about $19B in debt.

The author outlines three price targets for $VST:

• Bear case: $110 (7x EBITDA)
• Base case: $185 (9x EBITDA)
• Bull case: $240 (10-11x EBITDA)

Additionally, institutional buying was noted, with Peter Thiel purchasing $59M of $VST in Q2 and David Tepper increasing his position by 10% to represent 4% of his portfolio ($350M position size).