We recently published a list of the 13 Best Energy Stocks to Buy Right Now. In this article, we are going to take a look at where Exxon Mobil Corporation (NYSE:XOM) stands against other best energy stocks.
The worldwide energy industry has recently been rattled by a combination of factors, including the trade war sparked by President Trump’s tariffs, the prospects of a global economic slowdown, and the sharp slump in crude oil prices. As a result, at the time of writing this piece, the overall energy sector has fallen by 4.64% since the beginning of 2025, compared to declines of almost 3.6% by the wider market.
The steep downturn in global crude prices has particularly hit hard, and there appear to be no signs of a reversal as of yet, since the supply is projected to increase while demand forecasts keep falling. The West Texas Intermediate (WTI) oil price fell to just over $57 a barrel earlier this week, a level it last hit during the peak of the COVID-19 pandemic in 2021. However, it has slightly recovered since then and is currently hovering just around the $61 mark, buoyed by hopes of a breakthrough in looming trade talks between the US and China. Still, the low prices and higher costs due to tariffs on steel and aluminum have pushed many American oil producers to put the brakes on drilling new wells.
However, the same cannot be said about natural gas and its liquified state, LNG, which has especially fared well under the Trump administration. On his very first day in office, the President ordered the resumption of LNG export approvals and has started rolling back environmental regulations that slowed projects. The United States is already the largest LNG exporter in the world, with a record 11.9 billion cubic feet per day of outflows in 2024. These numbers are now expected to receive a significant boost, as the US Energy Information Administration has forecasted the country’s LNG exports to 15.2 bcfd this year. Europe remains the top destination for American LNG, accounting for over 75% of total orders this year. The continent has had to rely significantly more on imported LNG and less on gas delivered via pipelines from Russia since the Putin government’s invasion of Ukraine in 2022.
The ongoing AI boom is also expected to be a significant growth factor for the natural gas industry, which has emerged as the leading contender to power its data centers. These energy-intensive facilities could consume as much as 9% of all energy generated in the US by 2030, and this energy needs to come from a relatively clean, flexible, and reliable source that is abundantly available in the form of natural gas. According to data from S&P Global Commodity Insights, if even a quarter of the projected data center load is supplied by gas-fired generation, this would translate to a 2% increase in total US gas demand in 2040.
The price of natural gas has more than doubled since March 2024, offering a significant lifeline for America’s oil and gas sector in the last quarter, especially with the plunging crude prices denting their profits.
Is Exxon Mobil Corporation (XOM) the Best Energy Stock to Buy Right Now?
Aerial view of a major oil rig in the middle of the sea, pumping crude oil.
Methodology:
To collect data for this article, we scanned Insider Monkey’s database of hedge funds’ stock holdings and picked the top 13 companies operating in the energy sector with the highest number of hedge fund investors in Q4 of 2024. The following are the Best Energy Stocks According to Hedge Funds.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. 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).
Exxon Mobil Corporation (NYSE:XOM) is one of the largest integrated fuels, lubricants, and chemical companies in the world. The company operates facilities and markets products around the globe and explores for oil and natural gas on six continents.
Exxon Mobil Corporation (NYSE:XOM) beat earnings expectations in Q1 2025, reporting an adjusted EPS of $1.76 against expectations of $1.74 as production growth and cost cuts offset the impact of falling oil prices. However, the tough market conditions took their toll, and the company’s profits declined by 6% YoY to $7.71 billion. Moreover, the oil and gas giant’s revenue of $83.13 billion fell short of forecasts by almost $3 billion. Exxon’s global production came in at 4.55 million barrels per day, an increase of 20% YoY, with a target to achieve close to 5.4 million boe/d in 2030. The company has also taken an impressive $12.7 billion of structural cost out of the business since 2019, which has helped improve its profitability. Exxon intends to continue this momentum and deliver $18 billion of cumulative savings through the end of 2030 versus 2019.
Exxon Mobil Corporation (NYSE:XOM) generated an industry-leading $13 billion in cash flow from operations in Q1, while its free cash flow came in at $8.8 billion. The company is renowned for its commitment to shareholders and distributed $9.1 billion in Q1 2025, comprising $4.3 billion in dividends and $4.8 billion in share repurchases. Exxon has raised its payouts for 41 consecutive years, putting it among the 11 Undervalued Dividend Aristocrats to Buy Now.
Overall, XOM ranks 3rd on our list of the best energy stocks to buy right now. While we acknowledge the potential of XOM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
