We recently published a list of 12 Best Energy Stocks To Invest In Now. In this article, we are going to look at where Exxon Mobil Corporation (NYSE:XOM) stands against other best energy stocks to invest in now.
The rise of generative AI and quantum computing has sparked a technological revolution, but behind this growth lies an urgent challenge. As AI models grow more advanced, the data centers powering them are consuming unprecedented amounts of energy. Industry leaders are now faced with the dual challenge of meeting soaring demand while minimizing environmental impact. To meet the surging energy demands of AI, tech giants are turning to nuclear energy. Multi-billion-dollar deals have been signed to secure reliable and low-carbon energy sources.
At the same time, energy companies are positioning themselves as pivotal players in the evolving intersection of energy and AI infrastructure, emphasizing their capability to provide reliable, lower-carbon energy solutions. Major Oil and Gas companies are also advancing into the race to supply power for AI data centers, anticipating that tech companies will increasingly rely on natural gas to meet their growing energy demands. Exxon CEO Darren Woods stressed that decarbonized natural gas plants offer a quicker solution to meet tech companies’ energy needs compared to nuclear power, which involves lengthy development timelines.
2025 Oil Market Outlook: Prices to Fall
On December 18, CNBC reported that oil prices in 2025 are expected to decline due to a looming surplus in the global market, rather than any immediate actions by President-elect Donald Trump. As Trump prepares to assume office on January 20, 2025, the U.S., the world’s largest oil producer, continues to pump record amounts of crude, while demand from China, the world’s largest oil importer, slows amid economic headwinds.
Market analysts foresee U.S. crude oil prices averaging around $61 per barrel and Brent crude at $65 per barrel in 2025, according to forecasts from Bank of America and RBC Capital Markets. These projections represent a decline of over $8 from current levels. UBS presents a more moderate outlook, predicting Brent prices to average around $80 per barrel, supported by stronger demand and a narrower surplus.
While Trump has expressed a desire for lower energy prices, geopolitical factors could counteract his goals. If the Trump administration reinstates stricter measures on Iranian and Venezuelan oil exports, prices might rise instead of falling, according to Jorge Leon of Rystad Energy. However, any potential tariffs Trump may impose are unlikely to significantly impact global demand until 2026.
The evolving energy landscape is being shaped by the growing demands of AI infrastructure, advancements in cleaner energy solutions, and shifting global market dynamics. As tech giants increasingly turn to energy companies to meet their energy needs, companies are positioning themselves at the forefront of this transformation.
Our Methodology
To compile our list of the 12 best energy stocks to invest in now, we used Finviz and Yahoo stock screeners to find the 30 largest energy companies. Then we used Insider Monkey’s Hedge Fund database to rank 12 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Investors: 86
Exxon Mobil Corporation (NYSE:XOM), founded in 1870 and headquartered in Spring, Texas, is one of the world’s largest publicly traded energy companies. The company operates across the entire energy spectrum, from oil and gas exploration and production to refining and petrochemicals. Exxon Mobil Corporation (NYSE:XOM) serves global markets with a wide range of products, including fuels, lubricants, and petrochemicals.
Exxon Mobil Corporation (NYSE:XOM) is focusing on new technologies that have huge potential. The company has developed Proxxima, a revolutionary thermoset resin that is stronger, lighter, and more corrosion-resistant than conventional materials. According to Darren Woods, Chairman, and Chief Executive Officer of Exxon Mobil Corporation (NYSE:XOM), Proxxima has a total addressable market of 5 million tons per year and $30 billion by 2030, with applications in rebar, high-performance coatings, and lightweight applications for automobiles.
Exxon Mobil Corporation (NYSE:XOM) is actively advancing plans for its Gas-to-Energy Project in collaboration with the Government of Guyana. This initiative aims to utilize natural gas from the company’s offshore operations in the Liza Phase 1 and 2 fields. The project includes constructing a pipeline to transport approximately 50 million standard cubic feet of natural gas per day to onshore gas processing facilities. As of Q3, the company has completed the pipeline tie-ins, and once the government finalizes the associated power plant, the project will deliver electricity that is more affordable, cleaner, and highly reliable.
Overall, XOM ranks 1st on our list of best energy stocks to invest in now. While we acknowledge the potential of XOM to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.