Jim Cramer on Tesla and Other Stocks

6. Chevron Corporation (NYSE:CVX)

Number of Hedge Fund Holders: 64

Cramer, while visiting Chevron Corporation’s (NYSE:CVX) Anchor floating production unit (FPU), called the company big. He also remarked:

“CEO Mike Wirth… did not spend more than $5 billion on this thing [FPU] because fossil fuel powered cars will be a niche business.”

During the interview with Cramer, Mike Wirth, CEO, emphasized that the demand for electricity in the U.S. will keep rising, highlighting the necessity for various energy sources, including wind, solar, and natural gas. He also mentioned that despite the increasing popularity of electric vehicles, combustion engines continue to play a vital role and are still being produced in large quantities.

Cramer also mentioned that the company stagnates “because it’s hostage to oil and gas prices”. He went on to talk about the celebration of American ingenuity and said:

“… and it’s pretty darn hard to find a better example of that than Anchor, the gigantic floating oil platform in the Gulf of Mexico that I’m standing on right now… Anchor, this production unit that’ll be producing 75,000 barrels a day for years or even decades, given that there [is] more than 400 million barrels of oil beneath my feet… More important, it can maintain pressures of 20,000 pounds per square inch, which could unlock all sorts of offshore oil sites that were pretty much previously inaccessible.”

Chevron (NYSE:CVX) operates in the energy and chemicals sector both in the United States and internationally. The company focuses on the exploration, production, and transportation of crude oil and natural gas, as well as refining crude oil into various petroleum products and manufacturing renewable fuels and petrochemicals.

Chevron (NYSE:CVX) has strategically positioned itself to navigate various market conditions, including potential downturns. Its stress test showed that it can sustain its operations even if the price of Brent crude oil averages $50 from 2025 to 2027. Even in such a scenario, the company will be able to generate sufficient cash flow to support a capital program that emphasizes high-return projects, alongside a steadily increasing dividend, which has been a consistent feature for over thirty years.

Additionally, a key area of focus for the company is the Permian Basin, a region known for its rich oil reserves. The company aims for substantial production growth in this area, setting a target of nearly 4 million barrels of oil equivalent per day by 2027.