Vistra Soars 15% on 20-Year Nuclear Power Deal with Meta
The agreement secures a major source of zero-carbon power for Meta's growing data center needs and locks in long-term revenue for Vistra's nuclear assets.
Shares of Vistra Corp. (VST) surged more than 15% in Tuesday trading after the power generation company announced a landmark 20-year power purchase agreement (PPA) with Meta Platforms (META) to supply zero-carbon nuclear energy.
The deal, a significant endorsement of nuclear power's role in the energy-hungry digital economy, sent Vistra's stock climbing to an intraday high of $150.60, adding over $7 billion to its market capitalization. The agreement is designed to power Meta's expanding data center operations, which require vast and reliable sources of electricity to support artificial intelligence and other advanced technologies.
Under the terms of the agreement, Vistra will provide a substantial portion of the output from its nuclear power facilities to Meta. According to a joint press release, the deal helps secure the long-term viability of Vistra's nuclear fleet while providing Meta with a stable, 24/7 source of clean energy.
This PPA is one of the largest of its kind and represents a strategic move for both companies. For Vistra, an integrated power company with a portfolio of natural gas, nuclear, solar, and battery storage assets, the 20-year contract provides a highly predictable, long-term revenue stream, de-risking a significant portion of its nuclear generation capacity from the volatility of wholesale power markets.
The market's enthusiastic reaction reflects the financial security the deal provides. Investors have increasingly prized long-duration contracts that offer clear earnings visibility. The agreement with a counterparty of Meta's caliber validates Vistra's strategy of leveraging its nuclear assets as a source of clean, reliable baseload power. Vistra currently operates the largest competitive nuclear fleet in the United States, including the two-unit Comanche Peak Nuclear Power Plant in Texas.
For Meta, the deal is a critical step in its efforts to decarbonize its operations and achieve its sustainability goals. Data centers, the backbone of the internet and AI revolution, are voracious consumers of electricity. As companies like Meta race to build out their computational infrastructure, securing sufficient clean energy has become a paramount strategic challenge. Nuclear power offers a carbon-free energy source that, unlike wind or solar, can operate continuously, making it an ideal solution for powering essential 24/7 digital infrastructure.
"This agreement with Vistra is an important step for us in supporting our data centers with new zero-carbon energy,” a Meta spokesperson was quoted as saying in media reports. The tech giant has been vocal about its need for new energy sources to meet its ambitious growth targets.
Vistra's stock has been a strong performer over the past year, nearly doubling from its 52-week low of $90.17 as investors recognize the value of its generation fleet in a power-constrained market. With a market capitalization now exceeding $52 billion, the company is a major player in the U.S. utility sector. The majority of Wall Street analysts remain bullish on the stock, with 19 of 22 analysts covering Vistra rating it as a 'Buy' or 'Strong Buy', carrying a consensus price target of $231.85.
The deal also has broader implications for the U.S. energy sector, potentially serving as a blueprint for future agreements between Big Tech and power generators. As the demand for AI continues to explode, the need for reliable, carbon-free power is expected to grow exponentially, placing a premium on existing nuclear assets and creating a strong incentive for the development of new nuclear technologies.