A Confluence of Positive Developments Lifted Vistra Corp. (VST) in Q2

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equity markets rebounded in the quarter, rising 23% from intra-period lows to close at record highs. The fund gained 4.86% (net) in the quarter compared to the S&P 500 Index’s 10.94% return and its secondary benchmark, the CBOE S&P 500 Buy/Write Index’s 1.90% return. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, Meridian Hedged Equity Fund highlighted stocks such as Vistra Corp. (NYSE:VST). Vistra Corp. (NYSE:VST) is an integrated retail electricity and power generation company. The one-month return of Vistra Corp. (NYSE:VST) was -2.96%, and its shares gained 123.94% of their value over the last 52 weeks. On August 25, 2025, Vistra Corp. (NYSE:VST) stock closed at $190.08 per share, with a market capitalization of $64.403 billion.

Meridian Hedged Equity Fund stated the following regarding Vistra Corp. (NYSE:VST) in its second quarter 2025 investor letter:

"Vistra Corp. (NYSE:VST) is a U.S. power producer operating a balanced portfolio of nuclear, natural gas, and renewable assets, with a strong retail electricity business. We believe Vistra is uniquely positioned to benefit from surging electricity demand driven by AI data centers and broader electrification trends. In our view, the company operates one of the most attractive generation portfolios in the country, combining reliable nuclear assets with efficient natural gas plants in the tightest power markets, supporting our view that Vistra can earn outsized margins as demand outpaces new supply.

The quarter’s strong stock performance resulted from a confluence of positive developments for the company, including a strengthening secular tailwind, another value accretive acquisition, and regulatory clarity in Texas that could pave the way for a major data center deal. Management reported better-than-expected earnings, guiding to materially higher 2026 EBITDA, and continued its aggressive share buyback program, reinforcing our thesis of multiple avenues to value creation. "

Vistra Corp. (NYSE:VST) is in 28th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 111 hedge fund portfolios held Vistra Corp. (NYSE:VST) at the end of the second quarter, which was 102 in the previous quarter. While we acknowledge the potential of Vistra Corp. (NYSE:VST) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Vistra Corp. (NYSE:VST) and shared the list of best performing utilities stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.