Why Powell Industries (POWL) and Vistra Corp (VST) Are Up 7% Today
Electrical power stock Powell Industries (Nasdaq: POWL) and nuclear power play Vistra Corp (NYSE: VST | VST Price Prediction) are on fire, gaining anywhere between 7% and 8% in today’s trading session. Investors may have spotted a buying opportunity after…
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Electrical power stock Powell Industries (Nasdaq: POWL) and nuclear power play Vistra Corp (NYSE: VST | VST Price Prediction) are on fire, gaining anywhere between 7% and 8% in today’s trading session. Investors may have spotted a buying opportunity after both stocks were swept up in the wave of selling pressure in recent weeks and months. Powell Industries is also a play on data centers, which is where the AI magic takes place, making it susceptible to the same volatility as the rest of the sector.
With tariff optimism now in the air, POWL and VST could be benefiting from these tailwinds. Both stocks are also dividend payers, adding incentives for investors to snatch up more shares now that market sentiment has shifted positive.
Potential Buying Opportunity
Powell Industries stock has shaved off 20% of its value year-to-date. Investors might believe that the selling has been overdone as the stock was punished during the stock market rout. Powell pays an annual dividend of $1.07 per share for a modest dividend yield of 0.65%. Powell generates its revenue by selling electric power to utilities as well as oil and gas companies while data centers are a small but growing piece of the pie.
As companies continue to pour capex into AI and data centers, Powell Industries has the potential to benefit as it ensures that the power to those facilities is secure. While data centers may not be the individual catalyst for today’s gains, the potential of this business could be alluring as smoke clears from the tariff-related selling.
Wall Street analysts have been making moves on Vistra Corp stock. Wolfe Research has reportedly tweaked its price target to $154 from $193 per share. Morgan Stanley has an overweight rating on Vistra Corp stock but recently revised its price estimate downward to $172 per share. Goldman Sachs reportedly considers the stock a neutral bet. Nuclear power stocks like Vistra have been vulnerable to the whims of the AI sector because of their role in delivering power to massive AI data centers. This makes the sector more volatile than it would likely otherwise be. Today AI is a tailwind, but tomorrow it could become a headwind again on economic uncertainties.
Volatile Future
With the tariff situation improving, utility stocks are benefiting from their role in AI-powered data center growth. These utility stocks are anything but boring due to their role in AI and data center expansions. As a result, investors may experience more volatility than they signed up for in Powell Industries and Vistra Corp, but at least there are dividend checks coming in the mail.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
