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. With that in context, let’s take a look at the 12 best energy stocks to invest in now.
An aerial view of an energy refinery, with massive tanks and piping defining the landscape.
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).
12 Best Energy Stocks To Invest In Now
12. Shell plc (NYSE:SHEL)
Number of Hedge Fund Investors: 48
Shell plc (NYSE:SHEL) is one of the world’s largest integrated energy companies, operating across the entire oil and gas value chain, and is involved in exploration, production, refining, and distribution. The company generates revenue through the extraction and sale of oil and natural gas, as well as refining and marketing petroleum products.
Shell plc (NYSE:SHEL) is making significant strides in its integrated gas business, particularly in liquefied natural gas (LNG). The company has a robust portfolio of LNG projects, including the recent startup of Mero-3 in Brazil and the ongoing development of LNG Canada. These projects are part of the company’s strategy to capitalize on its leading position in the LNG market. The company’s trading capabilities and global reach allow it to optimize its LNG portfolio, ensuring that it can meet the growing demand for energy sources. Shell plc’s (NYSE:SHEL) focus on LNG is driven by its belief that natural gas will play a foundational role in the energy transition over the next few decades, making it a critical component of the company’s long-term strategy.
Shell plc (NYSE:SHEL) is also selectively investing in high-value opportunities across its portfolio. In the upstream segment, the company is focusing on deep-water projects in the Gulf of Mexico and Brazil, where it has a strong competitive advantage. The recent final investment decision on the second phase of the Vito project in the Gulf of Mexico and the startup of Mero-3 in Brazil are examples of this strategy. Shell plc (NYSE:SHEL) is also exploring opportunities in new basins, such as Namibia, where it has been involved in exploration activities and is closely monitoring the progress of other players in the region. While the company is cautious about the challenges in Namibia, it is committed to finding commercially viable projects that align with its high bar for investments.
11. Cenovus Energy Inc. (NYSE:CVE)
Number of Hedge Fund Investors: 48
Cenovus Energy Inc. (NYSE:CVE) is a Canadian integrated energy company based in Canada, with a strong presence in the oil sands, conventional oil and gas, and offshore oil and gas extraction. The company also operates refining and upgrading facilities in partnership with other industry players. Cenovus Energy Inc. (NYSE:CVE) sells oil, refined products, and natural gas to domestic and international markets.
Cenovus Energy Inc. (NYSE:CVE) is focusing on expanding its oil sand production through key projects such as the Narrows Lake expansion and the Sunrise and Foster Creek Optimization Project. These projects are expected to add 20,000 to 30,000 barrels per day of production, with the first oil anticipated in mid-2025. Moreover, the company is making significant progress on the West White Rose project, an offshore oil development in the Atlantic region. The project is 85% complete, and the gravity-based structure (GBS) is nearing mechanical completion. The topsides are also well advanced, with commissioning underway. Cenovus Energy Inc. (NYSE:CVE) expects to see the first oil from this project in 2026, which will contribute significantly to free cash flow and production growth.
Cenovus Energy Inc. (NYSE:CVE) is also focusing on improving the reliability and efficiency of its refineries, particularly in the U.S., where it has been addressing historical reliability issues and making targeted investments to enhance performance. The company aims to capture more value from the integrated value chain by improving asset reliability, lowering costs, and optimizing commercial opportunities across its network.
10. EQT Corporation (NYSE:EQT)
Number of Hedge Fund Investors: 48
EQT Corporation (NYSE:EQT) is the largest producer of natural gas in the United States, primarily operating in the Appalachian Basin. The company focuses on the exploration, development, and production of natural gas by leveraging advanced technologies. EQT Corporation (NYSE:EQT) sells natural gas to utilities, industrial consumers, and energy marketers.
In Q3, EQT Corporation (NYSE:EQT) completed the strategic acquisition of Equitrans Midstream, a move that transformed the company into one of the largest vertically integrated natural gas businesses in the United States. This acquisition has not only expanded the company’s midstream capabilities but also created a more resilient and efficient business model. The integration of Equitrans has been remarkably swift, with over 60% of the integration tasks completed in just three months. This rapid progress has already resulted in significant cost savings, with $145 million in annualized financial and corporate cost synergies achieved, exceeding the company’s original expectations. The integration is expected to unlock additional operational efficiencies, such as improved water delivery systems and optimized completion times, which are crucial for reducing well costs and enhancing overall productivity.
EQT Corporation’s (NYSE:EQT) is also focusing on operational excellence. The company has set new records for water delivery and completion efficiency, with footage completed per day in Q3, averaging 35% faster than in the same period in the prior year. These gains are a direct result of the seamless coordination between EQT Corporation’s (NYSE:EQT) upstream operations and Equitrans’ midstream assets. The integration has also enabled EQT Corporation (NYSE:EQT) to reduce its capital expenditures, with the potential to save $50 million to $60 million annually through efficiency improvements. Looking ahead, EQT Corporation (NYSE:EQT) aims to achieve even greater efficiency gains, with the goal of completing 50% more footage per day in 2025 compared to its historical average. This focus on efficiency is also expected to reduce the number of frac crews from three to two over time.
9. Diamondback Energy, Inc. (NASDAQ:FANG)
Number of Hedge Fund Investors: 49
Diamondback Energy, Inc. (NASDAQ:FANG) is an independent oil and natural gas company focused on the acquisition, development, and exploration of onshore oil and natural gas reserves in the Permian Basin in West Texas. The company produces and sells crude oil, natural gas, and NGLs to domestic and international markets. Diamondback Energy, Inc. (NASDAQ:FANG) recently completed its merger with Endeavor Energy Resources, in a deal valued at $26 billion.
To support long-term growth, Diamondback Energy, Inc. (NASDAQ:FANG) is heavily investing in infrastructure and transportation solutions to maximize the value of its natural gas production. In Q3, the company secured substantial capacity on key pipelines, including the Whistler and Matterhorn pipelines, ensuring approximately 250 million cubic feet of gas per day can reach premium markets. Additionally, Diamondback Energy, Inc. (NASDAQ:FANG) holds a 10% stake in the upcoming Blackcomb pipeline, expected to become operational in the coming years, further enhancing its ability to transport gas efficiently to South Texas markets.
Diamondback Energy, Inc. (NASDAQ:FANG) is exploring innovative ways to enhance the value of its natural gas resources. One key initiative involves developing power generation facilities using its natural gas supply to produce electricity. This approach not only increases profit margins but also protects the company from the volatility of natural gas prices. Furthermore, Diamondback Energy, Inc. (NASDAQ:FANG) is collaborating with data center operators and other partners to create energy solutions that capitalize on the abundant, low-cost natural gas available in the Permian Basin.
8. Valero Energy Corporation (NYSE:VLO)
Number of Hedge Fund Investors: 49
Valero Energy Corporation (NYSE:VLO) is one of the largest independent petroleum refining and marketing companies in the world. The company owns and operates refineries in the United States, Canada, and the United Kingdom. Valero Energy Corporation (NYSE:VLO) generates revenue by refining crude oil into petroleum products, including gasoline, diesel, and jet fuel, and selling these products to wholesale and retail customers.
Valero Energy Corporation (NYSE:VLO) is focusing on expanding its renewable fuels and low-carbon solutions to meet growing environmental demands and regulatory requirements. The company recently completed the Diamond Green Diesel Sustainable Aviation Fuel (SAF) project, which is now mechanically complete and in the process of starting up. This project, completed on schedule and under budget, is expected to produce high-quality renewable diesel and sustainable aviation fuel. Valero Energy Corporation (NYSE:VLO) is also actively exploring other renewable projects.
Valero Energy Corporation (NYSE:VLO) is also investing in advanced technologies and process improvements in its refineries to enhance efficiency and reduce operating costs. The company is leveraging digital transformation and automation to optimize refinery operations and improve asset utilization. These efforts are crucial in ensuring that Valero Energy Corporation (NYSE:VLO) remains a low-cost producer in the industry, which is essential for sustaining profitability during challenging market conditions. The company’s strong market presence in key regions such as the Gulf Coast, Mid-continent, West Coast, and North Atlantic, coupled with robust export capabilities ensures a diversified revenue stream.
7. Cameco Corporation (NYSE:CCJ)
Number of Hedge Fund Investors: 60
Cameco Corporation (NYSE:CCJ) is one of the world’s largest uranium mining companies with a strong presence in Canada’s Athabasca Basin, primarily through its Cigar Lake, Key Lake, and McArthur River mines. The company operates an integrated business model that spans uranium refining, conversion, and fuel manufacturing. Furthermore, Cameco Corporation (NYSE:CCJ) is actively engaged in advancing small modular reactor (SMR) nuclear technology and is contributing to the future of clean and reliable nuclear energy.
Cameco Corporation (NYSE:CCJ) is focused on optimizing assets to ensure a strong and resilient supply chain. The company has made significant investments in automation, digitization, and optimization of projects at its MacArthur River and Key Lake operations, which have already yielded positive results. These counter-cyclical investments, made during periods of market downturn, are now paying off, enabling the company to bend its cost curve and achieve higher production levels with lower costs. For example, the Key Lake Mill is expected to produce about 19 million pounds of uranium in 2024, up from the previously expected 18 million pounds.
Cameco Corporation (NYSE:CCJ) is also evaluating the work and capital required to expand its MacArthur River and Key Lake operations to a licensed capacity of up to 25 million pounds per year. The company is also assessing how it can de-risk and de-bottleneck operations to achieve a higher baseline level of production without making substantial additional investments.
6. Cheniere Energy, Inc. (NYSE:LNG)
Number of Hedge Fund Investors: 62
Cheniere Energy, Inc. (NYSE:LNG) is a leading liquefied natural gas (LNG) company based in the United States, with two major LNG export facilities: Sabine Pass in Louisiana and Corpus Christi in Texas. The company also owns 21.5 miles of natural gas supply pipeline that connects its Corpus Christi Terminal with several intrastate and interstate natural gas pipelines.
Cheniere Energy, Inc. (NYSE:LNG) is making significant strides in expanding its LNG production capacity through the development of Corpus Christi Stage 3. This expansion will add approximately 10 million tons of LNG capacity to the company’s platform, bringing the total production capacity to around 47 to 48 million tons across both sites in 2025.
Furthermore, Cheniere Energy, Inc.’s (NYSE:LNG) commercial strategy is centered on securing long-term contracts to ensure stable and reliable cash flows. The company has already contracted over 43 million tons of its 2025 production, leaving approximately 3 to 4 million tons available for spot sales. The company has been actively selling some of this spot volume opportunistically and currently forecasts approximately 2 to 3 million tons of unsold open capacity in 2025.
Cheniere Energy, Inc.’s (NYSE:LNG) strong commercial relationships, reliability, and environmental credentials are key differentiators in a competitive market and enables it to attract and retain high-quality customers.
5. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Investors: 63
Chevron Corporation (NYSE:CVX), headquartered in California, is one of the world’s largest integrated energy companies. The company operates across the entire oil and gas value chain, including exploration, production, refining, and marketing. Chevron Corporation (NYSE:CVX) sells fuels, lubricants, and petrochemicals and serves both industrial and retail customers globally.
Chevron Corporation (NYSE:CVX) is advancing several key projects poised to drive production and cash flow growth in the coming years. The company’s high-pressure Anchor project in the Gulf of Mexico is now operational, and water injection has commenced to enhance production at the Jack/St. Malo and Tahiti fields. These initiatives, along with additional projects planned through 2025, are expected to boost Gulf of Mexico production to 300,000 barrels per day by 2026. Meanwhile, at the Tengizchevroil (TCO) project in Kazakhstan, all four pressure boost facilities are fully operational, with start-up procedures scheduled to begin in the first quarter of 2025.
Chevron Corporation (NYSE:CVX) is also making significant investments in technology and digital tools to enhance productivity and reduce costs. The company has been diligent in its efforts to optimize its portfolio, leveraging technology to enhance productivity and change how and where work is performed. This is expected to deliver $2 billion to $3 billion in structural cost reductions by the end of 2026. Furthermore, the company is actively managing its capital spending to ensure it remains disciplined and aligned with its financial priorities.
4. Schlumberger Limited (NYSE:SLB)
Number of Hedge Fund Investors: 65
Schlumberger Limited (NYSE:SLB), now rebranded as SLB, is the world’s largest oilfield services company. The company provides technology, integrated project management, and information solutions to the global oil and gas industry. Schlumberger Limited (NYSE:SLB) generates revenue by offering services such as drilling, well construction, reservoir evaluation, and production management. The company’s clients include major oil and gas exploration and production companies worldwide.
Schlumberger Limited (NYSE:SLB) is focusing on developing the Direct Lithium Extraction (DLE) technology, which aims to revolutionize the lithium production process. DLE involves extracting lithium directly from brine, a saline solution found in underground reservoirs, without the need for traditional evaporation ponds. This innovative approach offers several advantages over conventional methods, including higher recovery rates, reduced environmental impact, and lower operational costs. The company’s efforts in DLE are part of its broader strategy to diversify into new energy markets and support the global transition to sustainable energy sources. Schlumberger Limited (NYSE:SLB) has made significant progress with its DLE pilot project in Nevada. The company has been working to digitally optimize the DLE process, ensuring that it is efficient, scalable, and cost-effective. The company’s expertise in data analytics and artificial intelligence (AI) is also being leveraged to fine-tune the extraction and purification processes to enhance the overall performance.
To scale up DLE technology and bring it to market, Schlumberger Limited (NYSE:SLB) is actively engaging with potential partners and customers. The company is exploring various commercialization models, including licensing the technology to other companies and forming partnerships to develop and operate DLE plants. This collaborative approach aims to accelerate the adoption of DLE technology and meet the growing demand for lithium, which is a key component in the production of batteries for electric vehicles (EVs) and energy storage systems.
3. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Investors: 66
ConocoPhillips (NYSE:COP) is one of the largest independent exploration and production companies globally, specializing in crude oil, natural gas, and natural gas liquids (NGLs). The company operates across North America, Europe, Asia, and Australia, focusing on resource-rich basins such as the Permian Basin and the Eagle Ford Shale.
ConocoPhillips (NYSE:COP) is making significant investments in LNG to capitalize on the growing global demand for natural gas. The company’s major projects, such as the Port Arthur LNG facility and the Australia Pacific LNG (APLNG) joint venture, are key components of its long-term growth strategy. These investments are designed to secure a strong position in premium gas markets in Europe and Asia, where LNG demand is expected to continue rising over the next several decades. By investing in the full value chain, from production to liquefaction, shipping, and regasification, the company aims to capture the full potential of the LNG market.
ConocoPhillips (NYSE:COP) is also expanding its LNG marketing and distribution capabilities to enhance its competitive position in the global market. The company has executed three agreements in Europe to support the expected increase in gas exports from its LNG projects. These agreements represent about 1.8 million tons per annum (MTPA) of capacity and provide ConocoPhillips (NYSE:COP) the flexibility to place volumes efficiently into multiple markets in Europe. This strategic move aligns with the company’s goal of maximizing returns on its LNG investments.
2. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Investors: 71
Occidental Petroleum Corporation (NYSE:OXY) is a leading energy company specializing in oil and gas exploration, production, and marketing, with operations primarily in the United States, the Middle East, and Latin America. The company’s customer base includes refiners, utilities, and industrial users. Occidental Petroleum Corporation (NYSE:OXY) holds significant assets in the Permian Basin, particularly in Texas and New Mexico.
Occidental Petroleum Corporation (NYSE:OXY) has significantly bolstered its position in the Permian through the acquisition of CrownRock, which added high-quality assets and a talented team to its portfolio. This acquisition has not only expanded the company’s footprint but has also provided new opportunities for operational improvements and cost efficiencies. For instance, Occidental Petroleum Corporation (NYSE:OXY) has leveraged its supply chain expertise to reduce material costs and is optimizing well spacing to improve recovery rates.
Occidental Petroleum Corporation (NYSE:OXY) is also making significant strides in the development of low-carbon technologies, particularly in direct air capture (DAC). The company is constructing the world’s largest DAC facility, with an initial capacity of 250,000 tons of CO2 per year, set to come online in mid-2025.
1. 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.
While we acknowledge the potential of Exxon Mobil Corporation (NYSE: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 timeframe. 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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