Vistra Stock Plummets Amid AI Efficiency Concerns: DeepSeek's Innovation Sparks Market Reassessment

Vistra: DeepSeek Sparks Undue AI Selling (Rating Upgrade) (NYSE:VST)

I outline key price levels to watch ahead of earnings as implied volatility spikes. Vistra Corp. (NYSE:VST) endured its worst single-day stock decline by lunchtime on Monday, January 27. The once hot-momentum AI play, driven by forecasts for intense data-center power demand in the years ahead, plunged following news of China's AI startup Freelance Financial Writer | Investments | Markets | Personal Finance | RetirementI create written content used in various formats including articles, blogs, emails, and social media for financial advisors and investment firms in a cost-efficient way. My passion is putting a narrative to financial data. Working with teams that include senior editors, investment strategists, marketing managers, data analysts, and executives, I contribute ideas to help make content relevant, accessible, and measurable. Having expertise in thematic investing, market events, client education, and compelling investment outlooks, I relate to everyday investors in a pithy way. I enjoy analyzing stock market sectors, ETFs, economic data, and broad market conditions, then producing snackable content for various audiences. Macro drivers of asset classes such as stocks, bonds, commodities, currencies, and crypto excite me. My thing is communicating finance with an educational and creative style. I also believe in producing evidence-based narratives using empirical data to drive home points. Charts are one of the many tools I leverage to tell a story in a simple but engaging way. I focus on SEO and specific style guides when appropriate. Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Vistra Stock Plunged Nearly 30% During Monday's AI Selloff -- What Comes Next?

Vistra (VST) shares fell nearly 30% on Monday as investors questioned whether artificial intelligence will require the huge amounts of computing power and electricity once expected. Chinese startup DeepSeek's newest open-source AI model has been found to perform nearly as well as models from American leaders like OpenAI and Google at a fraction of the cost. That has prompted concerns among Vistra investors that the big U.S. tech companies developing cutting-edge AI may not need as much power as previously anticipated. Shares of the nuclear power company, which more than tripled last year to post the second-biggest gain in the S&P 500, were off to another good start in 2025 amid the optimism about AI-related demand. The stock gave back all its early-year gains today, falling 28% to around $137. Below, we break down the technicals on Vistra's chart and identify crucial price levels that investors may be watching. Vistra shares have trended higher within an eight-month rising wedge, but staged a dramatic breakdown below the pattern's lower trendline during Monday's selloff in a move that could trigger short-term bearish sentiment. Moreover, the stock registered its highest daily trading volume since early May, indicating selling conviction by larger market players, such as institutional investors and hedge funds. Let's turn to Vistra's chart to identify support levels that could come into play amid further selling and also point out a potential bullish target if the stock resumes its longer-term uptrend and breaks above the rising wedge pattern. The first major lower level to watch sits around $107, a location on the chart where the shares may encounter buying interest near the prominent May peaks and nearby upward sloping 200-day moving average. Selling below this level could see the shares decline to the $85 level. Investors may look for entry points in this area near a trendline that links a range of comparable price points on the chart between June and August. Further downside opens the door for a retest of lower support around $72. The shares may attract buying interest in this region near a horizontal line that connects a series of highs and lows on the chart from late March to early September. To project a bullish target above the rising wedge, investors can use the measuring principle, a technique that analyzes chart patterns to forecast how a future directional move might play out. When applying the tool to Vistra's chart, we calculate the percentage change between the rising wedge's two trendlines and add it to the pattern's upper trendline value. For example, we add 140% to $200, which projects a bullish target of $480, a location where investors who use technical analysis may look for exit points. The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.