2 Hidden AI Stocks to Buy in the S&P 500 Sell-Off

Core Viewpoint - The recent market correction has led to a sell-off in AI-related stocks, driven by profit-taking, competitive concerns, and valuation issues, making it prudent to focus on companies with secure market positions and attractive valuations for potential investment opportunities [1]. Group 1: Vistra (VST) - Vistra has been a strong performer in the S&P 500, prompting profit-taking among investors, yet it remains an attractive stock to consider for purchase [3]. - The company has significantly increased its generating capacity, particularly in nuclear and renewable energy, following the acquisition of Energy Harbor and a 15% interest in Vistra Vision, leading to a notable growth in nuclear capacity by 169% from 2,400 MW to 6,448 MW [4][5]. - The demand for nuclear-powered electricity is rising, especially among hyperscaler data centers, as it provides a reliable, carbon-free power source essential for supporting AI growth [6][7]. - Vistra is actively engaging with major hyperscalers for potential deals, which could enhance its market position and value, trading at 19 times estimated 2025 earnings [8]. Group 2: Vertiv (VRT) - Vertiv, led by former Honeywell CEO David Cote, is well-positioned in the data center equipment market, competing effectively against larger companies [9]. - The company is experiencing strong demand, with organic sales increasing by 18% in 2024 and a 30% rise in orders, resulting in a backlog of $7.2 billion [10]. - The current dip in Vertiv's share price presents a favorable entry point, with the stock trading at less than 24 times the midpoint of management's 2025 earnings expectations, while the company is projected to grow earnings at a 25% annual rate over the next few years [11].