Investors are questioning the artificial intelligence trade that sent power stocks soaring last year, as the company viewed as best positioned to strike a data center deal still has not signed an agreement. Vistra Corp. was a darling of the S & P 500 in 2024, more than tripling in value to become one of the best performing stocks as investors expected the company’s nuclear and gas assets to benefit from the growing power demand of data centers. But Vistra’s stock fell more than 11% this week. Management was unable to tell shareholders the prospects for a near-term deal on the company’s fourth-quarter earnings call Thursday. Investor confidence in the Dallas-area company is fraying, Jefferies analyst Julien Dumoulin-Smith told clients in a note on Thursday. It has been nearly a year since Talen Energy touched off a race for power industry to secure deals with tech companies, after Amazon purchased a data center powered by the Susquehanna nuclear plant in Pennsylvania owned by Talen. The market has waited with growing impatience for Vistra to make a similar announcement, focusing on its nuclear assets such as the Comanche Peak plant outside Forth Worth, Texas. VST 1Y mountain Vistra, 1 year Vistra’s failure to secure a data center deal comes at a time when investors are already questioning how much power data centers will really consume. China’s DeepSeek AI laboratory rattled the market in late January, leading investors to worry that its R1 model may be cheaper and more energy efficient than U.S. competitors. Vistra shares tumbled more than 20% in February. Talen Energy has also cooled off, falling 5% this week and more than 6% in February after tripling in value in 2024. Jefferies still has the equivalent of a buy rating on Vistra with a price target of $167, suggesting 25% upside from Friday’s close. Street analysts are also bullish on Vistra with an average price target of $191, indicating 43% upside. ‘Clearly getting anxious’ Vistra CEO Jim Burke acknowledged investors’ frustration on the fourth quarter earnings call. The company is facing regulatory uncertainty on data center deals in the Texas and the PJM market that covers 13 states stretching from the Mid-Atlantic to the Midwest, Burke said. Vistra is in talks with regulators and communities who are worried about how locating data centers next to power plants will affect the electric grid, Burke said. These deals are complex and Vistra is focused on “putting points on the board” by striking a definitive agreement to boost shareholder confidence, the CEO said. “And that’s just not where we are yet on these deals, but we’re working hard to get there,” the CEO told investors on the earnings call. Burke, who’s worked at Vistra and its predecessor for 21 years, remains bullish on electric demand, with load growth diversified across industries. The Tulane graduate said AI data centers are “only one aspect of the growth” outlook, acknowledging investor anxiety over future demand. Angie Storozynski, analyst at Seaport Global Securities, pressed Burke on why discussions with regulators are still unresolved nearly a year after Talen’s Amazon announcement. The CEO said he was disappointed that talks had not progressed further. Talen ‘s deal with Amazon ran into trouble after the Federal Energy Regulatory Commission rejected a request to increase the amount of power dispatched from the Susquehanna nuclear plant to the Amazon data center. At the time, the FERC decision sent power stocks tumbling. But Talen CEO Mac McFarland maintained during his own company’s fourth-quarter earnings call this week that the U.S. is in the “early innings of the AI boom.” “That demand is going to possibly move around. But the demand is there. We are seeing no signs of slowing,” McFarland said. The Amazon data center campus is moving “full steam ahead” with the 300 megawatts that Susquehanna is allowed to deliver. Storozynski also pushed Talen CEO Mac McFarland on why his company has not announced any deals beyond the Amazon agreement: “We’re clearly getting anxious,” the analyst said on the earnings call held with analysts and shareholders. McFarland said the absence of new deals across the industry is not a sign of waning demand. “There is an appetite and it will take time” to reach agreements, the CEO said. Data center developers’ interest in natural gas is growing as nuclear deals face scrutiny from regulators, he added. “Gas deals are what’s going to fill the gap,” he said. Nuclear power deals “have the carbon-free aspect them, but gas is going to have to fill the gap.” Wall Street analysts have an average price target of $270 on the Houston-based power provider, implying 30% upside from Talen’s close Friday.