We recently published a list of Billionaire David Tepper’s Top 10 Stock Picks. In this article, we are going to take a look at where Vistra Corp. (NYSE:VST) stands against other billionaire David Tepper’s top stock picks.

David Alan Tepper, born on September 11, 1957, is an American billionaire hedge fund manager, businessman, and sports team owner. He is the founder and president of Appaloosa Management, a global hedge fund based in Miami Beach, Florida. Beyond finance, Tepper owns the Carolina Panthers of the National Football League (NFL) and Charlotte FC of Major League Soccer (MLS). Tepper grew up in Pittsburgh, Pennsylvania, earning a bachelor’s degree in economics from the University of Pittsburgh in 1978. He later pursued a Master of Science in Industrial Administration (MSIA) from Carnegie Mellon University in 1982. His connection to the university remained strong, culminating in a $67 million donation in 2013, after which the Tepper School of Business was named in his honor.

Over his career, Tepper has accumulated numerous accolades, cementing his status as one of the most successful hedge fund managers in the world. In 2018, he secured third place on Forbes’ list of the highest-earning hedge fund managers with $1.5 billion in annual earnings. He was repeatedly listed among Forbes’ top 25 highest-earning hedge fund managers in 2013 and 2016. A 2010 New York magazine profile described Tepper as the object of “hero worship” within the financial industry, where one investor famously referred to him as “a golden god.” His aggressive and unfiltered approach earned him a unique reputation, with plans to eventually convert his hedge fund into a family office.

Outside of finance and sports ownership, Tepper’s career includes a series of formative positions that shaped his reputation and investment philosophy. After earning his economics degree, he worked as a credit analyst at Equibank in Pittsburgh before enrolling at Carnegie Mellon. Post-MBA, he joined Republic Steel’s treasury department in Ohio and then moved to Keystone Mutual Funds in Boston. In 1985, Goldman Sachs recruited him for its newly formed high-yield credit group in New York City. Tepper quickly rose to head trader within six months, playing a crucial role in the firm’s recovery after the 1987 stock market crash by purchasing bonds from weakened financial institutions. Known for his blunt market commentary, he advised against fear-driven investment decisions during economic turbulence, famously dismissing extreme market predictions and championing the adaptability of markets and people alike.

Appaloosa Management, founded by Tepper in early 1993 after leaving Goldman Sachs, has become synonymous with high-stakes investing in distressed companies and volatile markets. Based initially in Chatham, New Jersey, the firm was established as an employee-owned investment management company with a sharp focus on distressed debt. From its inception, Appaloosa Management has specialized in investing across public equity and fixed income markets on a global scale. The firm built a reputation for its bold, contrarian investment strategy, particularly in volatile and high-risk sectors.

Appaloosa Management quickly gained recognition, generating a 61% return in 2001 through distressed bond investments, and in 2005, pivoted to lucrative opportunities in S&P stocks. Tepper’s hedge fund became known for profiting from “dicier” companies, with notable gains from MCI, Mirant, Conseco, and Marconi. In 2009, Appaloosa made about $7 billion by purchasing distressed financial stocks like Bank of America at just $3 per share during the market crash, with $4 billion going directly to Tepper’s personal wealth, making him the top-earning hedge fund manager that year.

Throughout the 1990s, Appaloosa Management earned recognition as a niche junk bond investment boutique, distinguishing itself by targeting undervalued, distressed corporate debt that other investors tended to avoid. As the hedge fund industry evolved in the 2000s, so did Appaloosa’s role and reputation, becoming widely regarded as one of the premier hedge funds in the world, known for its aggressive, high-reward investment tactics. Its core strategy continued to focus on distressed securities, but it also expanded its portfolio to include opportunities in equities and other financial instruments, consistently generating strong returns through bold market bets.

As of its most recent 13F filing for the fourth quarter of 2024, Appaloosa Management’s top ten holdings account for 66.75% of this portfolio, which reflects the firm’s high-conviction, opportunistic investment strategy, a hallmark of David Tepper’s approach.

Our Methodology

We searched through Appaloosa Management’s Q4 2024 13F filings to identify the top stocks in its portfolio. The resultant stocks are then compiled in the ascending order of the fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included hedge fund sentiment regarding each stock using data from 1009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

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Vistra Corp. (NYSE:VST)

Number of Hedge Fund Holders as of Q4: 120

Appaloosa Management’s Equity Stake: $372.25 Million

Vistra Corp. (NYSE:VST), a leading integrated retail electricity and power generation company, delivered a strong financial and operational performance for 2024, driven by its diverse portfolio that spans natural gas, nuclear, coal, solar, and battery storage facilities. Following its series of acquisitions in 2024, Vistra now stands as the second-largest competitive nuclear operator in the United States. For the quarter ending December 2024, the company reported a net income of $490 million. Over the full year, the company generated $4.56 billion in cash flow from operations, with net income from ongoing operations reaching $2.93 billion. Its ongoing operations adjusted EBITDA totaled $5.66 billion, surpassing the midpoint of its initial guidance by $856 million.

Reaffirming its financial strength and growth outlook, Vistra Corp. (NYSE:VST) provided 2025 guidance projecting ongoing operations adjusted EBITDA between $5.5 billion and $6.1 billion, with adjusted free cash flow before growth expected to range from $3.0 billion to $3.6 billion. The company reported securing hedging coverage for nearly all of its anticipated generation volumes for 2025 and about 80% for 2026, demonstrating a disciplined risk management approach.

Meanwhile, Vistra Corp. (NYSE:VST) made headlines earlier this month by officially withdrawing a 2020 proposal to redevelop part of the retired Morro Bay Power Plant at 1290 Embarcadero into a large-scale battery energy storage system. The initial proposal, which would have transformed a 22-acre portion of the site into a battery storage facility capable of powering about 450,000 homes, was expected to generate an estimated $4.8 million in annual property tax payments for San Luis Obispo County if fully funded. However, in March 2025, the City of Morro Bay formally requested a transfer of the property into city ownership. In response, Vistra declined the request in its April letter and withdrew its development application, asking the city to halt further processing of the proposal. While the future of the Morro Bay site remains uncertain, Vistra reaffirmed its commitment to exploring opportunities that align with its corporate objective.

Carillon Eagle Mid Cap Growth Fund stated the following regarding Vistra Corp. (NYSE:VST) in its Q3 2024 investor letter:

“Vistra Corp. (NYSE:VST) is an integrated retail electricity and power generation company. As an independent power producer (IPP), Vistra primarily generates revenue from selling its generated power at the prevailing market price. As a result of recent growth in future power demand, the company’s shares have soared on investors’ expectations for future power prices. The potential for Vistra to announce future power purchase agreements (PPAs) with large technology companies in order to satisfy the extraordinary power requirements of these companies’ artificial intelligence (AI) endeavors, in a similar manner to some of Vistra’s closest IPP peers, has also provided a tailwind for the stock.”

Overall, VST ranks 5th on our list of billionaire David Tepper’s top stock picks. While we acknowledge the potential of these stock picks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than VST but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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