My Portfolio Is Getting Some ‘Energy’
I’m getting into these two familiar oil and gas stocks amid an uncertain market.
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AI-related stocks and neocloud providers had a bit of a rebound this week after the tech-heavy Nasdaq sold off by more than 4% last week. This was the worst weekly performance for the Nasdaq since June. Stellar results from Space Exploration Technologies Corp. (SPCX) after the bell on Tuesday should set a positive tone for the Nasdaq in early trading today.
Average 30-year mortgage rates near 7.5% continue to play havoc with an already moribund housing market. Pending home sales just came in near the lowest levels in a quarter of a century. Housing starts fell over 5% month-over-month in September as they did in August.
Higher interest rates are doing no favors for other purveyors of high-ticket items. General Motors’ (GM) stock fell 7% in trading on Tuesday even as the company posted Q3 results that beat both the top- and bottom-line consensus. Weak forward guidance around vehicle sales were the main culprit behind the decline. Oil fell some on Tuesday, on the latest rumors around a potential deal with Iran. At this point, I just consider this noise until proven otherwise. Negotiations have developed into a “Waiting for Godot” scenario.
I’m Turning to Energy Stocks
That said, I do want to circle back to couple of large oil services stocks I have highlighted a few times in 2026. They are one of the few pockets of value I am finding in this overbought market. I will start with Halliburton (HAL). The company reported Q3 results before the bell on Tuesday. Both top and bottom-line numbers slightly beat expectations.
The company recently signed memorandums of understanding with two Brazilian based energy companies to pursue oil and gas development opportunities in Venezuela. A country that could be a huge new market over time. The company is also getting more involved in building natural gas plants to supply the demand being driven as massive AI data centers get constructed across the globe. The stock remains reasonably value at 14-times earnings with a just over two percent dividend yield.
Halliburton’s results probably bodes well for SLB N.V. (SLB), previously known as Schlumberger, when it reports third-quarter numbers shortly. The oil services company has been busy lately signing a contract to help develop energy resources in Venezuela. SLB also signed significant contracts in Oman and Saudi Arabia in September.
Finally, the company spent just over $4 billion at the end of August to purchase thermal management and heat exchange technologies company Kelvion from Apollo Global Management (APO). This acquisition will greatly expand SLB’s footprint into data center infrastructure.
Both of these energy services names should benefit immensely once hostilities in the Middle East finally end. They should garner plenty of additional work to restore production in the region. As well as to rebuild inventories and strengthen energy security. This should drive multi-year demand growth for oilfield services. I also think over time that AI will eventually make exploration much more efficient and productive, which could unlock additional demand for the services that Halliburton and SLB provide. Both stocks have options that are very liquid against their equities, making it easy to accumulate a position via covered call orders.
At the time of publication, Jensen was long HAL and SLB
