Core Insights - Chevron Corporation is expanding into the data center power market with plans for its first AI data center power project in West Texas, targeting a start-up in 2027 [1][8] - The proposed natural gas facility will generate 2.5 GW of off-grid power, with potential expansion to 5 GW [1][8] - Chevron is in exclusive negotiations with an undisclosed data center customer and expects to finalize investment decisions early next year [1][2] Chevron's Strategic Moves - As a major producer in the Permian Basin, Chevron aims to leverage its regional advantages to meet rising power demands from hyperscalers amid U.S. grid constraints [2] - The groundwork for this shift began in January 2025 through a partnership with Engine No. 1 and GE Vernova Inc., focusing on developing multi-gigawatt power plants co-located with data centers [3] Industry Trends - Other energy companies, such as Halliburton and Liberty Energy, are also expanding into data center services, indicating a broader industry shift towards new markets [4][5][6] - Halliburton has formed a joint venture with VoltaGrid to provide scalable power solutions for data centers, starting in the Middle East [5] - Liberty Energy is building a distributed power generation business and aims to exceed 1 GW of total generation capacity by 2027 [6] Financial Performance - Chevron's shares have increased approximately 18.6% over the past six months, outperforming the Oil/Energy sector's growth of 13% [7] - The stock is currently trading at a premium compared to the industry average in terms of forward price-to-earnings ratio and above its five-year mean [9] - The Zacks Consensus Estimate for Chevron's 2025 earnings has been revised upward by about 2% over the past 30 days [11]