Ray Dalio’s Bridgewater cut stake in dividend stock by 59%

Bridgewater Associates, the hedge fund founded by billionaire Ray Dalio, made a sharp move in Q3 of 2025 by cutting its stake in Vistra Corp by nearly 59%.

According to its most recent 13F filing, the fund reduced its position from 817,614 shares to just 338,335 shares.

That’s a drop of 479,279 shares, leaving Bridgewater with roughly $66.3 million in Vistra stock, or 0.26% of the total portfolio.

The timing stands out. Vistra (VST) stock had climbed over 650% over three years as demand for electricity from AI data centers sent power prices soaring.

But by the time Bridgewater filed its updated holdings, shares had pulled back about 25% from September highs to $164.

Why Bridgewater trimmed its position

Hedge funds like Bridgewater Associates don’t explain their moves in regulatory filings, so we’re left connecting the dots.

The most obvious reason: profit-taking.

• When a stock rockets 650% in three years, even the most bullish investors eventually lock in gains.
• Vistra’s valuation had stretched to nearly 37 times earnings at its peak, expensive even for a company riding the AI infrastructure wave.

Volatility could be another factor. Despite strong fundamentals, Vistra shares swung wildly throughout 2025.

The company operates in wholesale power markets, where prices fluctuate with weather, natural gas prices, and grid demand.

Bridgewater may have also rebalanced the portfolio, given Vistra’s spectacular run. Notably, the hedge fund reduced its Nvidia stake by 65%, indicating a broader shift in its tech and infrastructure exposure.

Vistra focuses on growth

While Bridgewater was selling, Vistra’s management team was building.

• Vistra operates one of the largest power generation fleets in the U.S., with roughly 40,000 megawatts of capacity.
• That’s enough to power about 20 million homes.
• The fleet includes natural gas, nuclear, coal, solar, and battery storage facilities spread across 18 states and Washington, D.C.

Nuclear power has become Vistra’s secret weapon. The company owns the country’s second-largest fleet of nuclear plants, and in January, it signed a landmark 20-year deal with Meta Platforms to supply 2,600 megawatts of carbon-free nuclear power.

CEO Jim Burke called the Meta agreement “a major milestone” and noted the deal ensures the Comanche Peak nuclear plant will operate through at least the 2050s.

Referring to nuclear’s 24/7 availability and zero-carbon profile, Burke said:

Major acquisitions expand footprint

Beyond the Meta Platforms deal, Vistra has been on an acquisition spree.

In October 2025, the company closed on seven natural gas plants from Lotus Infrastructure Partners for $1.9 billion. Those assets add approximately 2,600 megawatts of capacity across PJM, New England, New York, and California.

Then, in early 2026, Vistra announced plans to acquire Cogentrix Energy‘s ten natural gas plants for $4.7 billion.

Vistra also committed to developing two new gas-fired units in West Texas, totaling 860 megawatts, with expected completion in early to mid-2028.

CFO Kris Moldovan told investors the Lotus assets alone should contribute roughly $270 million in adjusted EBITDA in 2026, with potential upside from operational synergies.

The company is also exploring nuclear uprates, which could add about 600 to 700 megawatts of additional capacity at existing plants starting in the early 2030s.

Power demand should accelerate

Vistra’s aggressive expansion comes as electricity demand surges across the U.S., driven primarily by AI data centers, crypto mining operations, and industrial electrification.

• In the ERCOT market covering most of Texas, weather-normalized load growth hit roughly 6% year-over-year.
• Meanwhile, the PJM market spanning the Mid-Atlantic and Midwest saw load growth of 2% to 3%.
• This surge in demand is already driving higher utilization rates at Vistra’s combined-cycle gas plants.
• Capacity factors have climbed from the low 50% range to the high 50s in recent years, with the potential to reach the mid-80% range as consumption continues to rise.

Strong financial outlook ahead

Despite Bridgewater’s cautious stance, Vistra’s management team raised guidance for 2025 and provided strong outlooks for 2026 and 2027.

• The company now expects 2025 adjusted EBITDA between $5.7 billion and $5.9 billion, with adjusted free cash flow before growth between $3.3 billion and $3.5 billion.
• For 2026, Vistra projects adjusted EBITDA of $6.8 billion to $7.6 billion and adjusted free cash flow before growth of $3.925 billion to $4.725 billion.
• Looking further out, the company introduced an adjusted EBITDA midpoint range for 2027 of $7.4 billion to $7.8 billion.
• With roughly 70% of expected generation for 2027 already hedged, management expressed confidence in the forecast.

Vistra offers a growing dividend yield

Vistra continues returning significant capital to shareholders while funding growth projects.

Since implementing its capital return plan in Q4 of 2021, Vistra has returned over $6.7 billion through share repurchases and common stock dividends.

Management expects to return at least another $2.9 billion through 2027, including a recently authorized $1 billion share buyback program.

The company has reduced shares outstanding by approximately 30% since November 2021, repurchasing roughly 165 million shares at an average price below $34 per share. Shares currently trade around $194.

According to data from Tikr.com, between 2025 and 2027, Vistra is forecast to increase:

• Revenue from $19.7 billion to $24.4 billion.
• Free cash flow from $3 billion to $4.8 billion.
• Annual dividend per share from $0.92 to $1.03.

Vistra’s forward dividend yield is just 0.6%, but the company has raised its dividend for six consecutive years.

With a payout ratio of less than 12%, Vistra can easily grow its annual dividend while heavily investing in capital expenditures.

Is Vistra stock still undervalued?

Bridgewater’s decision to trim its stake doesn’t necessarily mean Vistra is a bad investment.

Hedge funds sell for many reasons, including portfolio rebalancing and locking in profits after massive runs.

The fundamentals supporting Vistra remain intact.

The company has locked in long-term contracts with major customers, expanded its generation capacity, and positioned itself to benefit from accelerating electricity demand driven by the buildout of AI infrastructure.

Shares trade at roughly 14x projected 2027 earnings, which is reasonable, considering growth estimates.

Given consensus price targets, Vistra stock trades at a 45% discount in January 2026. For those bullish on AI infrastructure and willing to stomach volatility, Vistra offers direct exposure to one of the decade’s most compelling investment themes.