Texas-based power producer Vistra Corp. reported its steepest decline since February 2021 as investors retreat from bets on an AI-driven surge in electricity demand. According to Bloomberg, the company's stock dropped 1.6% on Friday, June 7, reversing earlier gains, and is on track for a 14% loss this week. 

This decline follows a significant rally over the past year, surpassing even Nvidia Corp.'s performance, fueled by predictions of increasing energy needs for AI data centers.

Recent actions by investors to sell off their shares for profit have contributed to a wider market decline, impacting Vistra Corp. and other power producers like Constellation Energy Corp. and companies that make related equipment. 

It takes a long time for energy consumption to increase, which is making some investors impatient as they analyze current financial performance reports, leading them to sell their stocks.

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Vistra Corp Power Producer

Vistra's stock surge was driven by its status as an independent power producer selling electricity at market rates and its substantial nuclear generation capacity. 

However, shares began to tumble after the company announced expansion of natural gas capacity in Texas. Analysts attributed the sell-off to interest in a Texas loan program that could lead to a surge in power generation capacity, potentially depressing prices.

Despite the recent downturn, Wall Street remains optimistic about Vistra, with 10 out of 11 analysts rating the stock a buy and an average price target suggesting a 25% increase over the next year. 

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