Better-Than-Anticipated Results Lifted Vistra Corp. (VST) in Q2

ClearBridge Investments, an investment management company, released its “ClearBridge Mid Cap Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Following the soft start to the year, the midcap fund rebounded in the second quarter, driven by demand for AI and a low-quality rally, which enabled the growth stocks to overcome the tariff-led uncertainty. The strategy failed to outpace the benchmark, despite strong absolute returns, due to limited exposure to several of the rally’s leading participants. However, the firm is optimistic about the ability of the mid-cap growth universe to offer attractive long-term compounders. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, ClearBridge Mid Cap Growth Strategy 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 -6.68%, and its shares gained 129.83% of their value over the last 52 weeks. On August 27, 2025, Vistra Corp. (NYSE:VST) stock closed at $194.60 per share, with a market capitalization of $65.934 billion.

ClearBridge Mid Cap Growth Strategy stated the following regarding Vistra Corp. (NYSE:VST) in its second quarter 2025 investor letter:

"Our top contributors were broadly dispersed across IT, consumer discretionary and utilities. M-merchant power producer and utility company Vistra Corp. (NYSE:VST) made gains following a string of better-than-anticipated results by leading AI developers and IT stocks, easing investors’ concerns about a potential slowdown in AI demand and data center buildouts and pointing to continued increases in power demand as they come online. Ultimately the AI ecosystem remains short power and Vistra is among the best positioned to deliver it at a meaningful premium to prevailing prices."

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 Meridian Hedged Equity Fund's views on the company. 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.