Here's Why Vistra Was a Top Performer in the S&P 500 in 2024

Shares in Vistra (NYSE: VST) rose by an incredible 257.9% in 2024, according to data provided by S&P Global Market Intelligence. The company started the year as an integrated retail electricity and power generation company, and it ended the year by becoming one of the year's hottest artificial intelligence (AI) plays on the market.

AI and nuclear power

The boom in AI applications in 2024 brought with it the concomitant need to invest in data centers to support that growth. I'll get to Vistra's role in a moment -- first a few words on how nuclear power became popular in 2024.

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There is a critical need to secure a long-term, reliable power source for data centers, and nuclear power is increasingly seen as the answer. Nuclear power is seen as a carbon-free way to ensure reliable power, and it has become even more popular considering renewable energy's difficulties in recent years, including surging costs, logistics issues, and supply chain constraints.

Indeed, it's no coincidence that the most significant three cloud service providers signed deals with nuclear power producers in 2024. Microsoft inked a long-term power purchase agreement with Constellation Energy to restart part of the Three Mile Island nuclear plant. Alphabet's Google signed a deal to buy nuclear energy from small modular reactors (SMR) developed by Kairos Power.

Meanwhile, Amazon's Amazon Web Services paid $650 million to buy a data center campus from Talen Energy and signed a long-term deal to buy power from Talen's nearby nuclear plant. Amazon also signed deals to support the development of SMRs. While the Amazon/Talen deal received a blow when the U.S. Federal Energy Regulatory Commission rejected a proposal allowing Talen to sell more power to Amazon, the IT giant has subsequently reaffirmed its commitment to the original equipment.

Image source: Getty Images.

Where Vistra fits in

The company started the year with only 2,400 megawatts (MW) of its 36,702 MW of generating capacity coming from nuclear, but significantly added to that figure with the completion of a deal to acquire Energy Harbor in March, adding 4,000 MW of nuclear generation capacity. Vistra would then acquire the remaining 15% it didn't own in Vistra Vision (which held its nuclear assets, among others).

The deal was perfect timing, and investors now anticipate that Vistra will also sign a lucrative long-term power supply agreement with a data center operator. That's something to look out for.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool recommends Constellation Energy and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.