Vistra

Artificial intelligence data centers need enormous amounts of round the clock electricity, and Vistra already owns the plants to supply it. The company signed long term deals to sell about 3,800 megawatts of nuclear power to Amazon Web Services and Meta, which turns unpredictable market pricing into steady contracted income. Adjusted earnings climbed more than 30 percent year over year last quarter to 1.77 billion dollars.

Vistra produced 4.07 billion dollars of operating cash flow last year and guides to as much as 4.7 billion dollars of free cash flow this year. Management has used that money to buy back close to 30 percent of the company's shares, which means each remaining share owns a bigger slice. It is also buying Cogentrix, a fleet of about 5,500 megawatts of gas plants, expected to add to cash flow starting in 2027.

Even as profits climbed, revenue fell about 5 percent year over year last quarter to 4.02 billion dollars, the lowest in five quarters. Costs went the other direction, with operating expenses up more than 16 percent in the quarter and over 35 percent across the last two years. If the new power plants do not bring in enough new revenue to cover that, the profit growth gets much harder.

The stock has fallen roughly 30 percent over the past year even while the business improved, so this one requires patience. Vistra sells power at market prices, so profits swing with electricity and natural gas costs, and accounting rules on its hedges can move reported earnings by hundreds of millions of dollars in a single quarter. The shares also trade near 15 times book value, which leaves little room for disappointment.