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It has been a jittery start to March for the US stock market. Concerns around tariffs and the impact they could have on economic growth and inflation have caused some investors to get worried. Some S&P 500 stocks have seen a significant move lower in a short space of time. Here’s one that has fallen that I think could be worth buying.
Reasons for the fall
I’m referring to Vistra Corp (NYSE:VST). The stock is down 24.6% over the last month, but still up 122% over the past year. Vistra’s a US-based energy company engaged in the production and distribution of electricity and related services.
One reason why the stock has struggled so far in 2025 is due to the rise of DeepSeek, a Chinese AI-model that was reportedly trained and built for a fraction of the cost of other large language models (LLMs). You might think that this story doesn’t really have anything to do with Vistra, but you’d be wrong.
A key reason for the surge in the stock over the past year has come because the energy infrastructure it owns is seen as the future for powering AI projects. The ability to fuel such energy-hungry processors means that Vistra could see revenue significantly increase in coming years. However, the DeepSeek breakthrough caused the stock to fall. If investors have to dial back optimism about how much electricity is actually going to be needed, then maybe Vistra won’t be as profitable as initially thought.
Another factor has been lower electricity prices. The mild winter in the US has further reduced electricity demand, putting downward pressure on energy company revenues.
The long-term view
Despite the short-term negatives, it doesn’t change the fact that Vistra is still hot property. The 2024 results mentioned that “in these 12 months, we closed on a unique acquisition, adding three nuclear sites, approximately one million additional retail customers in the key PJM market and 2,000 new team members”.
The bottom line is that there’s a lot of progress being made at the company, aside from the AI-hype and speculation. The share price will likely continue to be volatile. But I think that it will move back higher this year. As the dust settles on some of the AI concerns, people should realise that Vistra is a profitable utility company.
Further, it’s pushing ahead with renewable energy. Even though this will be attractive for big tech with AI spending plans, it’s also appealing to other corporate customers. So even if AI slows down, it can still do very well with other clients.
Summing it up
Overall, I think this is a dip opportunity worth considering for investors. In contrast to some other AI-related stocks, Vistra has a strong core utility business, which I think makes it more sustainable going forward.
