Have you ever wondered how the massive boom in artificial intelligence could actually lift stocks in the old-school oil sector? It sounds counterintuitive at first, right? But when you dig into it, the connection becomes crystal clear—AI needs enormous amounts of power, and that power hunger is starting to ripple through the energy world in ways many investors haven’t fully appreciated yet.
Recently, a seasoned market watcher highlighted one particular company in the oilfield services space as a standout opportunity heading into 2026. She sees it as undervalued, fundamentally strong, and perfectly positioned to ride some powerful tailwinds that go beyond traditional oil prices. In my view, this kind of insight is exactly what separates casual observers from those who spot real value early.
A Closer Look at This Underrated Energy Play
The company in question is the world’s leading oilfield services provider, a giant that’s been around for decades but is now evolving in smart ways. Shares have already started the year strong, climbing noticeably and hitting levels not seen in over a year. Yet, despite that momentum, the stock remains well below its historical peaks—down substantially from highs set more than ten years ago.
What catches my attention here isn’t just short-term news flow, though current events in global oil politics are certainly helping. Instead, it’s the broader structural shifts that could drive sustained growth. Think about it: every new data center, every expansion in cloud computing, every advance in generative AI requires reliable electricity. And in many cases, natural gas and other hydrocarbons are stepping in to fill the gap while renewables scale up.
The Macro Backdrop: Power Demand Meets Energy Reality
Let’s step back for a moment. The explosion in data centers isn’t slowing down anytime soon. Tech giants are pouring billions into new facilities, and those buildings guzzle power like nothing else. Grid infrastructure in many regions is already strained, and quick fixes often involve natural gas plants. This translates directly into higher activity for companies that help extract and produce energy efficiently.
In addition, ongoing repairs and upgrades to aging power grids worldwide add another layer of demand. It’s not glamorous, but it’s essential. And perhaps the most interesting aspect is how this ties into international markets, where much of the growth potential lies.
Organic growth for the industry should pick up this year and continue improving. It’s all connected to rising power needs—from AI buildouts to basic infrastructure fixes.
I’ve found that these kinds of macro trends often create multi-year opportunities, especially when the market hasn’t fully priced them in yet. U.S. shale production might be maturing and slowing its torrid pace, but that just shifts focus overseas, where national oil companies and majors are planning significant spending increases.
Regions like the Middle East, for instance, are expected to boost capital expenditures meaningfully. When integrated oil companies partner with top-tier service providers, the benefits flow through quickly. And in this space, one name consistently stands out as the go-to expert.
Company-Specific Strengths That Stand Out
Beyond the favorable industry winds, this particular player has been making internal moves that deserve more credit. Management has focused relentlessly on profitability, streamlining operations, and building differentiators that peers struggle to match.
One area that really intrigues me is their push into digital technologies. They’re not just drilling holes anymore—they offer sophisticated software and AI-driven tools that help clients produce more with less. This creates efficiency gains for customers, which in turn gives the company pricing leverage and stickier relationships.
- Leading market position with consistent double-digit growth potential
- Heavy exposure to international markets, which make up the vast majority of revenue
- Expanding digital platform generating recurring income streams
- Recent acquisition bringing cost synergies and less cyclical exposure
- Committed to returning substantial capital to shareholders
That digital segment alone has grown into something substantial, delivering nearly a billion dollars in trailing recurring revenue. It’s synergistic with core operations, helping drive margins higher over time. Add in the integration of a complementary business bought recently, and you get hundreds of millions in expected cost savings.
Shareholder-friendly policies round out the picture. Expect billions in combined buybacks and dividends this year, building on already strong returns from prior periods. When companies generate free cash flow and give much of it back, that’s usually a good sign they’re confident in the outlook.
Valuation: Why It Still Looks Attractive
Here’s where things get really interesting from an investment standpoint. Despite all these positives—the macro tailwinds, the internal improvements, the cash returns—the stock trades at multiples that seem almost too modest.
We’re talking mid-teens price-to-earnings and less than nine times enterprise value to EBITDA. For a industry leader with growth drivers in place, that strikes me as reasonable, if not outright cheap. Especially when you consider shares sit meaningfully below levels from just a couple years ago.
You get exposure to international recovery, digital advantages, acquisition benefits, and generous capital returns—all at compelling valuations with room for mean reversion higher.
In my experience, markets sometimes take time to recognize turnarounds or new growth chapters. But when they do, the re-rating can be powerful. This feels like one of those setups where patience could pay off handsomely.
Of course, energy investing always carries risks. Geopolitical tensions, commodity price swings, and regulatory shifts can impact sentiment quickly. Yet the underlying demand story—tied to electrification, digital transformation, and basic infrastructure needs—appears durable.
How This Fits Into a Broader Portfolio
If you’re building a diversified portfolio for the coming years, having some exposure to energy makes sense to me. Not just for inflation protection or commodity cycles, but because of these emerging linkages to technology megatrends.
This stock offers a way to play that theme without betting purely on volatile crude prices. The international tilt provides geographic diversification, while digital initiatives add a growth overlay reminiscent of tech names—but at far lower multiples.
Perhaps most appealing is the balance: defensive qualities from essential services, offensive potential from secular demand growth, and direct cash returns to owners. It’s the kind of profile that can perform across different market environments.
Looking ahead to the rest of 2026 and beyond, I suspect more investors will connect these dots. As earnings reports highlight accelerating international activity, expanding margins, and robust free cash generation, attention should follow.
For now, though, the opportunity remains under the radar for many. That’s often where the best returns start—from ideas that aren’t yet consensus. Whether this becomes a core holding or a tactical position depends on your goals, but the setup certainly merits a closer look.
At the end of the day, investing rewards those who see connections others miss. The bridge between cutting-edge AI and traditional energy infrastructure might just be one of those overlooked links right now. And companies positioned squarely on that bridge could deliver rewarding journeys for patient shareholders.
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