NRG(NRG) The Motley Fool·2025-04-04 08:47Core Insights - David Tepper, a prominent hedge fund manager, is strategically adjusting his portfolio in the AI sector, showing a preference for Chinese companies over U.S. counterparts [1][5]. Group 1: Portfolio Adjustments - Tepper reduced his stakes in Amazon and Meta by nearly 19% and 21.6% respectively in Q4 2024 [3]. - Conversely, he increased his investment in Alibaba by 18.4% and acquired approximately 3.17 million additional shares of JD.com, raising his position by nearly 43.4% [4]. Group 2: Energy Sector Investments - Tepper significantly increased his holdings in Vistra and NRG Energy, boosting his stake in Vistra by 112.5% and in NRG Energy by 81.5% [6]. - Vistra is a leading integrated power provider in the U.S., serving around 5 million customers across 18 states, while NRG Energy provides energy to approximately 8 million residential customers and operates in 25 U.S. states and Canada [6][7]. Group 3: AI Growth Drivers - The investments in Vistra and NRG Energy are linked to the growth of data centers, which are crucial for AI development [7]. - U.S. energy demand for data centers is projected to nearly quadruple to 55 gigawatts by 2030, with Texas identified as the fastest-growing power market [8]. Group 4: Valuation and Growth Prospects - Both Vistra and NRG Energy have seen significant stock sell-offs, leading to attractive valuations, with Vistra's forward price-to-earnings ratio at 16.3 and NRG Energy at 12.8 [10]. - The demand for power is expected to rise due to the construction of new data centers, indicating strong growth prospects for these companies [11].