Key Takeaways SLB trades at 10.28X EV/EBITDA, below the industry average and BKR but above HAL.SLB sees strong offshore demand, with $9B in subsea awards expected over two years.SLB forecasts a temporary slowdown in early 2026 despite $4B shareholder returns.SLB (SLB) is currently considered cheap on a relative basis, with the stock trading at a trailing 12-month enterprise value to earnings before interest, taxes, depreciation and amortization (EV/EBITDA) of 10.28X, representing a discount compared with th ...

Group 1: Energy Sector Performance - The energy sector is experiencing a significant rally, marking its eighth consecutive week of gains, a trend not seen in nearly two years [1] - SLB has secured a wave of international project awards and is benefiting from longer-cycle offshore work and higher-margin digital completions, indicating a multiyear spending upswing for service providers [2] - Baker Hughes is also witnessing strong demand in LNG, turbines, and subsea equipment, with robust backlogs and improving pricing power [2] Group 2: Major Players and Strategies - Exxon and Chevron, which together account for over 40% of the XLE's weight, are focusing their capital programs on complex, high-return projects that necessitate more engineering, equipment, and services [3] - This strategic shift is contributing to the outperformance of SLB and Baker Hughes compared to the supermajors [3] Group 3: Technology Sector Challenges - The technology sector, represented by XLK, has seen a slight year-to-date decline, raising concerns among investors about whether AI revenue will materialize quickly enough to justify cloud-era valuations [4] - There is a clear market rotation from speculative promise to tangible cash flow, favoring the energy sector over technology [4] Group 4: Market Implications - The ongoing success of the energy sector signals a broader market preference for tangible assets over digital hype, suggesting a shift in investment focus [5] - In 2026, industrial sectors, particularly energy, are expected to outperform technology in terms of financial returns [5]