Vistra Is Up 720% in 5 Years. Is There Still Time to Buy This AI "Picks and Shovels" Stock?

When a stock surges more than eightfold in just five years, it's understandable that some investors wonder if they've missed the party. When the name in question is a utility stock, that wonderment is probably heightened because "conventional wisdom" says utility stocks aren't supposed to notch gains like that.

But that's exactly what Vistra (NYSE: VST) did. Proving that the artificial intelligence (AI) trade often acts as a rising tide that lifts even boring boats, Vistra is up a staggering 720% over the past five years. Nearly all of that bullishness was accrued before the start of 2026. This year, Vistra stock is down about 3% amid a somewhat volatile half-year of trading.

This utility stock has been fueled by the AI boom. It may have more upside ahead. Image source: Getty Images.

That may be more of a sign that the utility is taking a well-deserved break than that its bull run is over. Vistra still commands a prominent position in two marquee data center markets, suggesting the utility may have the energy to drive more long-term upside.

Vistra at the right place at the right time

Vistra's ascent into the pantheon of story stocks is all the more remarkable when considering it's the entity that emerged from the bankruptcy of Energy Future Holdings a decade ago. Today, Vistra has a dominant market position in the power generation fleet industry, positioning it to capitalize on the AI power boom.

Hyperscalers, such as Meta Platforms, are taking notice. So are well-known professional investors. The point is that many market participants now view Vistra and a small number of its competitors not as stodgy utilities, but rather as key purveyors of AI infrastructure. That status is great when the AI trade is working, but that trade gives and takes away. With AI stocks taking a breather, Vistra is following suit. The stock is off about 4.5% over the past three months.

That's a minor "dip" in the context of its five-year run, but it may be a reason for long-term investors to put Vistra on their watch lists. Near-term stock headwinds aren't altering projections that hyperscalers will spend $700 billion this year. Nor does Vistra's recent sluggishness change the fact that hyperscalers ink long-term contracts with the company, providing investors with coveted revenue clarity.

Another point to consider: While Vistra is seemingly joined at the hip with the AI trade, there's more to the story, and that "more" can defray some AI-related risks. For example, Vistra is seen as a beneficiary of increased demand for electric vehicles, oilfield electrification, and the return of more manufacturing jobs to the U.S.

Dividend growth potential

In utilities-sector terms, Vistra's dividend yield of nearly 0.6% is below average, but yield doesn't tell the entire story. This is a company with blue chip dividend stock potential because it's expected to return $3 billion combined this year and in 2027 across buybacks and dividends.

Vistra is already proving to be a dividend growth powerhouse. It initiated that payout in 2019 at $0.50 a share, and it's nearly doubled since then.

Additionally, the utility has investment-grade credit ratings from Fitch and S&P, and its cash-flow trajectory supports reinvestment in the business. So even if Vistra needs to tap capital markets, it can do so cost-effectively. It probably doesn't need to over the near term due to strong capital allocation practices and cash flow, which should be music to the ears of long-term investors.

Todd Shriber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms, S&P Global, and Vistra. The Motley Fool has a disclosure policy.