Chevron's Pivot to Data Centers Signals a New Growth Frontier
Chevron Corporation CVX is taking a pragmatic, returns-focused step beyond its traditional integrated oil operations by moving into the rapidly expanding data center power market. During its annual Investor Day, the company outlined plans for its first AI data center power project in West Texas, targeting a start-up in 2027. Chevron is in exclusive negotiations with an undisclosed data center customer and expects to reach a final investment decision early next year. The proposed natural gas facility will generate 2.5 GW of off-grid power, with room to scale up to 5 GW.As one of the largest producers in the Permian Basin, an area known for natural gas volumes that often exceed pipeline capacity, Chevron aims to turn this regional advantage into a strategic opportunity. The project expands on the company’s existing strengths while addressing rising power demands from hyperscalers, especially as U.S. grid constraints become more pressing.Chevron began the groundwork for this shift in January 2025 through a partnership with investment firm Engine No. 1 and GE Vernova Inc. GEV, a manufacturer of natural gas turbines. The collaboration focused on developing multi-gigawatt power plants co-located with data centers, supported by seven American-made GE Vernova 7HA turbines intended to supply facilities across the Southeast, Midwest and West America.Other Energy Companies Expanding Into Data Center ServicesChevron is not alone in this strategic evolution. A few oilfield service companies are capitalizing on the data center boom as well.In mid-October 2025, Halliburton Company HAL unveiled a joint venture with VoltaGrid, a leader in distributed energy technologies, to deliver scalable and sustainable power solutions for data centers worldwide, starting in the Middle East. The collaboration combines VoltaGrid’s advanced power generation systems with Halliburton’s global presence and multi-region expertise. Together, the partners intend to offer turnkey energy solutions tailored to meet the growing power demands of modern data centers.Liberty Energy Inc. LBRT has also begun expanding beyond traditional services by building a robust distributed power generation business. Its recent partnership with nuclear innovator, Oklo, underscores its ambition to supply large-scale, energy-intensive customers such as data centers. The company expects to exceed 1 gigawatt of total generation capacity by 2027, positioning itself firmly within the AI-driven power ecosystem.The Zacks Rundown on ChevronShares of Chevron have gained around 18.6% in the past six months, outperforming the Oil/Energy sector’s growth of 13%.Image Source: Zacks Investment ResearchFrom a valuation perspective — in terms of forward price-to-earnings ratio — Chevron is trading at a premium compared with the industry average. The stock is also trading above its five-year mean of 11.86.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Chevron’s 2025 earnings has been revised about 2% upward over the past 30 days.Image Source: Zacks Investment ResearchThe stock currently carries a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chevron Corporation (CVX): Free Stock Analysis Report Halliburton Company (HAL): Free Stock Analysis Report Liberty Energy Inc. (LBRT): Free Stock Analysis Report GE Vernova Inc. (GEV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
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