SLB is the world’s premier oilfield-services company as measured by market share. While the industry is largely fragmented, SLB holds the first or second competitive position in many of the differentiated oligopolies in which it operates. Also known as Schlumberger, the company was founded in 1926 by Conrad and Marcel Schlumberger. Today, it’s most known as a global industry leader in innovation, while it focuses its strategy on its three growth engines: core, digital, and new energy businesses. Over three-fourths of its revenue base is tied to international markets, while the company boasts nearly $3 billion in digital-related revenue.

Energy and Material stocks are sleepy no more. The war in Iran and the simultaneous race to advance AI have created an enormous need for energy and materials. Demand is up and so is attention on the stocks that supply the power and the materials needed. First, oil and energy companies have benefited from the effort to hedge against oil-supply constraints due to the war and the intermittent closures of the Strait of Hormuz. Year to date, the price of oil has swung from $60 to $110 and is now at around $78. The elevated prices have contributed to the profits of oil and energy companies as they race to accommodate demand. At the same, materials and energy are needed to fuel the growing appetite of AI. Companies involved in the many tiers of AI development are investing in the future by building energy and data storage facilities, as well as the semiconductors and subcomponents that are needed for parts. Argus has a Market-Weight rating on the Energy sector, which comprises 4% of the S&P 500. The sector is the best performing in the S&P 500, up 30% versus 13% for the S&P 500. Meanwhile, we have an Over-Weight rating on the Materials sector, which makes up just 2% of the S&P 500. The Materials sector is also outperforming, up 15%. We just highlighted the Energy and Materials sectors in our monthly webinar, including our stocks that stand to benefit from the above forces. For this week's list, we present the BUY-rated stocks discussed during the webinar.

SLB is one of the world's leading oilfield services companies, supplying technology, information solutions, and integrated project management services that optimize reservoir performance. It employs approximately 109,000 people in more than 100 countries. SLB supplies a wide range of products and services, including seismic testing; formation evaluation; well testing and directional drilling; well cementing and stimulation; artificial lift and well completions; and consulting, software, and information management. It operates in nearly all major oilfield services markets and typically generates higher returns on investment than peers. In 2024, the company generated 19% of its revenue from the U.S. and 81% from international markets. Additionally, the company is a component of the S&P 500.

The major indices are mixed at midday on Tuesday, with the Nasdaq extending losses. Chip stocks in South Korea tumbled overnight and that negative sentiment has spilled over to U.S. trading. Adding some perspective, the semiconductor SOX sub-index is up 52% year-to-date. In the past month, it has slid 17%. Much of the concern centers around consolidation in future chip orders ahead of possible future AI consolidation. Crude oil is at $81 per barrel. The yield on the 10-year note is at 4.62%.