When asked about the leading stock in the S&P 500 this year, many might think of a booming tech company benefiting from the AI Boom, like NVIDIA Corporation (NVDA).

However, that would only give you part of the picture.

The reality is that the top performer on the S&P 500 is a utility company and it’s thriving thanks to the demand from the AI Boom.

Let’s cut to the chase – that company is Vistra Corp. (VST).

This year, Vistra has soared approximately 235%, outpacing NVIDIA’s impressive 180% gain.

One might wonder, what does a utility company have to do with the AI Boom?

The answer is straightforward: AI consumes a tremendous amount of power.

For instance, training OpenAI’s language model, GPT-3, required roughly 1,300 megawatt hours (MWh) of electricity. This amount is comparable to the annual power consumption of 130 U.S. homes.

Advanced models like GPT-4 might require 50 times that amount. Moreover, the demand for computational power needed to sustain AI’s growth doubles approximately every 100 days.

Estimates from Boston Consulting Group suggest that AI could account for 16% of the nation’s energy consumption, reaching 130 gigawatts by 2030.

This staggering demand has elicited major agreements from unlikely players stepping up to meet the energy needs.

For example, on September 21, Microsoft Corporation (MSFT) signed a deal with Constellation Energy Corporation (CEG) to revive the Three Mile Island nuclear plant in Pennsylvania. Constellation will invest $1.5 billion to bring one of the plant’s reactors back online by 2028. In exchange, Microsoft will pay a premium above market rates for the energy needed for its expanding data center operations over the next 20 years.

For those unfamiliar, this facility experienced a partial meltdown in 1979, which significantly slowed the adoption of nuclear energy in the U.S.

Additionally, on Wednesday, Amazon.com, Inc. (AMZN) announced a $500 million investment in nuclear energy. The agreement with Dominion Energy, Inc. (D) aims to explore the development of Small Modular Reactors (SMRs), regarded as a vital step in expanding nuclear power infrastructure. These advanced reactors are smaller, less expensive, quicker to construct, and can be located nearer to power grids.

In summary, AI is playing a crucial role in revitalizing the nuclear energy sector.

But this leads us to a significant question: Why focus on nuclear power?

Big Tech likely prioritizes clean energy sources. However, there is a challenge: Wind and solar power may not suffice.

AI data centers require a continuous, reliable power supply. This necessity calls for a base-load power source that can provide consistent electricity, regardless of weather or time of day.

Matthew Garman, CEO of Amazon Web Services (AWS), supports this view, stating:

We see the need for gigawatts of power in the coming years, and there’s not going to be enough wind and solar projects to meet that demand, making nuclear a compelling option.

The Emerging Leader in the S&P 500 for 2024

Here comes Vistra.

Vistra, based in Texas, is an integrated retail electricity provider and the largest electricity generator in the U.S., boasting a capacity of around 39 gigawatts from diverse energy sources including natural gas, nuclear, solar, and battery storage.

Earlier this year, Vistra finalized a $3.4 billion acquisition of Energy Harbor, establishing itself as the second-largest nuclear power provider in the country. The company also owns the Moss Landing Power Plant in California, known for having the world’s largest battery energy storage system.

Operating primarily in Texas allows Vistra to set prices based on market dynamics without being constrained by regulations.

Plugging into my strong Stock Grader system, I recommended Vistra to my premium subscribers back in March. Since then, its stock has surged 140%. With a Quantitative Grade of A, strong interest from institutional buyers is evident, suggesting sustained growth ahead.

The Future of AI and Energy

This highlights the reality that while NVIDIA remains a key player, it’s not the sole beneficiary of the current shifts in the market. AI’s expansion is unfolding rapidly, impacting numerous stocks positively.

Looking ahead, I anticipate a significant transformation in the AI sector.

As many individuals are…

Investors Should Watch for the Rise of Next-Gen AI Stocks

Many are still investing heavily in established “first generation” AI stocks like NVIDIA.

However, a shift is underway as “next-gen” AI stocks are poised to take prominence in the market.

These second-generation AI stocks represent smaller companies that are harnessing AI technology to create innovative business models or transform existing industries. This evolving landscape presents a unique opportunity for savvy investors.

Through a tool called my Stock Grader, I’ve identified six next-gen AI companies that are already making impactful changes in their sectors. This moment could be your chance to participate in a significant market transition that may generate substantial returns, starting with a modest investment.

I recently conducted a briefing that covers all critical details. It’s important to act promptly, as this briefing will be removed TONIGHT at midnight. Don’t miss out on the opportunity to learn more.

Click here to explore how you can benefit from the upcoming AI Boom and discover the names of these six next-gen AI companies.

Sincerely,

Source: InvestorPlace unless otherwise noted

Louis Navellier

Editor, Market 360

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Microsoft Corporation (MSFT), NVIDIA Corporation (NVDA) and Vistra Corp. (VST)