Schlumberger NV

SLB and Venezuela's state-run PDVSA signed a contract last week granting the U.S. company access to coveted oilfield data and allowing it to organize and upgrade PDVSA's vast but outdated databases following years of neglect and a recent cyberattack. Many details of the contract, including duration and payment mechanism, remain unknown, but SLB will be able to use new technology, including artificial intelligence, to expand, modernize, and make Venezuela's oil data reliable again. Venezuela has not published routine oil statistics in more than a decade, and the latest annual bulletin released by the oil ministry was in 2015; except for limited production data reported monthly to OPEC, the lack of information has become a major obstacle to promoting oilfields for investment. PDVSA has managed to patch its main applications since it was the target of a ransomware attack last year that knocked down applications and key contract administration software, but it needs to migrate systems, particularly its geological and production databases, to new providers and implement modern tracking tools. Venezuela's oil ministry confirmed last week that an agreement with SLB had been signed with PDVSA to modernize exploration and production.

SLB has received a contract from Brunei Shell Petroleum to assist in restoring production from shut-in wells in multiple offshore fields. The agreement covers multiple disciplines and services, aiming to improve recovery from mature assets through an integrated execution model, though financial terms were not disclosed. SLB will provide subsurface evaluation, candidate selection, engineering, offshore execution, project management, intervention operations, monitoring, metering, and marine logistics under a single framework. This marks the first time BSP uses an integrated production restoration model, following a well, reservoir, and facility management methodology. BSP operates over 200 offshore installations connected by more than 5,000 kilometers of pipeline.

SLB reported second-quarter results that exceeded Wall Street expectations, with revenue of $8.97 billion beating analyst estimates of $8.68 billion and adjusted earnings per share of $0.55 surpassing the $0.52 consensus. The 4.5% year-on-year revenue decline was offset by broad-based international growth and a rebound in North American operations, while operating margin narrowed to 13.3% from 14.3% a year earlier. CEO Olivier Le Peuch highlighted higher offshore activity in Latin America, Europe, Africa, and Asia, along with increased U.S. land demand, though Middle East operations remained constrained by ongoing conflict. During the earnings call, analysts pressed management on the pace of Middle East recovery, the durability of the exploration cycle, offshore growth prospects for 2027, the economics of the new Data Center Solutions business, and revenue potential in Venezuela. The company noted that Data Center Solutions is capital-light with strong free cash flow despite lower margins, and it is preparing to scale operations in Venezuela with contracts secured for 2027.

SLB shares climbed last week after the oilfield services leader reported higher-than-expected sales and profits. Revenue rose 5% year over year to $8.97 billion in the second quarter, while adjusted earnings reached $0.55 per share, topping Wall Street estimates of $0.52. CEO Olivier Le Peuch cited the Middle East conflict as driving customers to prioritize energy security and production capacity expansion. The company is also expanding into artificial intelligence, with data center revenue soaring 80% and on pace to surpass a $1 billion annualized run rate by the end of 2026.

SLB announced an alliance with Liberty Energy to deliver modular behind-the-meter power solutions for AI-driven data centers, while its OneSubsea joint venture secured a multi-well subsea EPC contract from Eni for Phase 3 of the Baleine project offshore Côte d'Ivoire. The company's narrative projects $42.2 billion in revenue and $5.6 billion in earnings by 2029, requiring 5.5% annual revenue growth and a $2.3 billion earnings increase from $3.3 billion today. A Kuwait Oil Company seven-year Ahmadi Innovation Valley agreement reinforces SLB's push into AI, industrial IoT, and production optimization. Analysts' cautious view assumes about 3% annual revenue growth and roughly $4.8 billion in earnings by 2029. SLB's fair value estimate stands at $61.39, representing a 30% upside to its current price.

The global Floating Production Systems market is projected to grow from $16.15 billion in 2025 to $28.09 billion by 2035, at a CAGR of 5.69%, according to SNS Insider. The FPSO segment held the largest share in 2025 at about 49% of market revenue, while the Spar Platforms segment is expected to grow fastest at 7.08% CAGR. Deep-water applications accounted for roughly 42% of revenue in 2025, and the ultra-deep-water segment is forecast to expand at 7.03% CAGR. National oil companies contributed around 41% of market revenue in 2025, with offshore contractors projected to grow at the highest CAGR of 7.64%. North America led with nearly 29% of global revenue in 2025, while Asia Pacific is anticipated to grow at the fastest rate of 7.58% CAGR.

SLB shares drew attention after the company announced a new alliance with Liberty Energy to supply modular infrastructure and integrated power generation for data centers serving AI and high performance computing. The most widely followed narrative points to a fair value around $61.39, compared with SLB's last close at $47.54, suggesting the stock is undervalued. This valuation is grounded in detailed long-term earnings and cash flow assumptions, supported by double-digit year-over-year growth in SLB's digital business, notably the DELFI platform. However, the narrative faces pressure from potential declines in global upstream spending and the risk that the ChampionX integration delivers slower or smaller cost synergies.

SLB announced that its OneSubsea joint venture has been awarded a major multi-well engineering, procurement, and construction contract by Eni for Phase 3 of the deepwater Baleine project offshore Côte d'Ivoire. SLB OneSubsea will deliver complete subsea production systems for 13 wells. The contract supports Eni's efforts to advance the complex deepwater project efficiently while contributing to the long-term development of offshore resources in Côte d'Ivoire. In pre-market trading on NYSE, SLB shares rose 0.93 percent to $48.20.

Wolfe Research initiated coverage of three major oilfield services companies, assigning Outperform ratings to SLB and Baker Hughes while rating Halliburton at Peer Perform. Analyst Carlos Escalante said the industry faces a selective capital cycle favoring international exposure. On SLB, Wolfe set a $62 price target, citing margin upside from the ChampionX integration and growth in digital and data center business lines, which doubled from fiscal 2024 to 2025 and is expected to grow 13-15% annually over the next decade. Baker Hughes received a $70 price target, with Wolfe saying its free cash flow trajectory is being mispriced at an oilfield services multiple and its Industrial and Energy Technology business is set to exceed 50% of EBITDA for the first time. The pending $13.6 billion Chart Industries acquisition was flagged as a key catalyst. Halliburton was seen as largely macro dependent, carrying the largest North America exposure of the large-cap oilfield services group.

SLB shares have fallen 23% from their recent high amid a crash in oil prices, but the oilfield services company is being touted as a top buy on the dip. Brent crude, which surged to $138 per barrel earlier this year after U.S. and Israeli strikes on Iran, has since plummeted to around $71 per barrel on hopes of a peace deal. SLB’s first-quarter revenue fell 11% sequentially and net income dropped 6% year over year to $752 million due to Middle East disruptions, though management views the impact as temporary and is preserving capacity for a rebound. The company points to a Final Investment Decision pipeline exceeding $100 billion in long-cycle deepwater projects, which supports pricing power and future revenue. With oil still above pre-conflict levels and supply rebalancing expected, SLB is positioned to benefit from sustained upstream investment.

SLB has signed a seven-year contract with Kuwait Oil Company to lead the Ahmadi Innovation Valley initiative, which includes a dedicated research and development facility focused on digital technology and deployment across Kuwait's energy sector. The company is also launching a major international innovation hub tied to this long-term collaboration in the Middle East. Over the seven-year timeframe, the scope and visibility of this agreement may influence how SLB allocates capital and engineering resources in the region. Investors can monitor how quickly the new research hub ramps up, the extent to which technology from the project is adopted across Kuwait, and whether similar contracts are announced in other Middle Eastern markets.

SLB has been awarded a seven-year contract by Kuwait Oil Company to develop and deploy advanced technologies under KOC's Ahmadi Innovation Valley program. The oilfield services company will work with KOC on nearly 100 projects focused on AI, production optimization, reservoir technologies, water management and energy transition, aiming to improve upstream operations and build local technical expertise. As part of the deal, SLB will build a dedicated innovation facility in Kuwait, with construction starting in 2026 and the center set to open in 2028. In pre-market activity on the NYSE, shares of SLB were up 0.58 percent, changing hands at $46.63, after closing Monday's regular session 1.32 percent lower.

SLB N.V. emerges as the stronger energy stock for 2026 compared to NOV, driven by its higher profitability, global scale, and attractive valuation. SLB generated $35.7 billion in revenue and $3.4 billion in net income in fiscal 2025, yielding a net margin of 9.4%, while NOV posted $8.7 billion in revenue and $145 million in net income with a 1.7% margin. SLB's free cash flow reached nearly $4.8 billion, far exceeding NOV's $864 million, and its forward price-to-earnings ratio of 21.2x is lower than NOV's 24.0x. Although NOV boasts a stronger balance sheet with a current ratio of 2.4x and lower debt, SLB's technology-driven model and diversified international operations position it for long-term growth. Both companies face cyclical energy sector risks, but SLB's scale and cash generation make it the preferred choice for most investors.

Stifel raised its price target on SLB N.V. to $64 from $61 and maintained a Buy rating on June 18, following the company's Digital Investor Day where it detailed its digital capabilities. Separately, on June 15, SLB launched the SLB Digital Marketplace, a curated destination to help energy companies discover and deploy AI agents, domain models, and digital applications within their existing environments. The marketplace extends SLB's open platform strategy to its Tela agentic AI assistant, allowing partners and customers to bring purpose-built digital capabilities through a single governed channel.

Goldman Sachs said artificial intelligence and digital technologies could significantly shorten development timelines and lower costs for new oil and gas projects. AI, high-performance computing, and digitalization could reduce the average development cycle for greenfield deepwater projects from about 12 years to seven years, with most of the time savings occurring before final investment decisions through faster exploration, appraisal, and engineering work. The improvements could lift the internal rate of return for a typical greenfield oil project to 19% from 15.5% by lowering capital spending, reducing operating costs, shortening development timelines, and increasing production, while project breakeven prices could decline by about 15%. Among oilfield services companies, TGS, Vallourec and SLB were identified as the strongest beneficiaries of increasing AI adoption, while companies focused on floating production storage and offloading vessels and pure subsea construction contractors are expected to benefit less because their operations remain constrained by fabrication capacity rather than digital workflows.

SLB has signed a long-term contract with Venezuela's state oil company PDVSA to support the revitalization and modernization of the country's oil and gas sector. The memorandum of understanding covers cooperation across exploration, field development, production, digital enablement, and workforce training and development. A key focus is the digital transformation of Venezuela's oil and gas sector, with SLB and PDVSA using connected data, predictive models, and AI-driven workflows to improve efficiency and fast-track decision-making. CEO Olivier Le Peuch stated that the partnership builds on SLB's nearly century-long presence in Venezuela and aims to strengthen operational excellence and develop local skills.

Jim Cramer said on Mad Money that SLB, formerly Schlumberger, is 'by far the best there is' in the oil services industry. Speaking after the company's investor day meeting in New York, Cramer highlighted SLB's rapidly growing digital business, which accounted for roughly 7% of revenue last year but carries higher margins than the rest of the company. He described it as a modern growth business within the 100-year-old institution, while also noting that peace prospects in the Middle East are putting pressure on crude prices.

SLB has launched the SLB Digital Marketplace, a platform enabling energy companies to find and deploy AI agents and digital tools directly into existing operations. The stock recently fell 4.45% in a single session, though it recorded a 7-day return of 14.12% and a 30-day return of 15.29%, with a year-to-date return of 19.63% and a one-year total shareholder return of 37.81%. Trading at $48.09, SLB is considered 21.7% undervalued based on a fair value estimate of $61.39, driven by strong adoption and double-digit year-over-year growth in its digital business, notably the DELFI platform. However, risks include potential weakening in global upstream spending and uncertainty around the ChampionX integration delivering expected cost and revenue benefits.

SLB and Nvidia have deepened their two-decade partnership by launching a joint AI Factory for Energy, with SLB selected as a modular design partner for Nvidia DSX AI factories. SLB CEO Olivier Le Peuch told CNBC on June 18, 2026 that the collaboration is being industrialized across SLB's Delfi and Lumi platforms, while the company's digital annual recurring revenue crossed $1 billion, up 15% year over year, and data center solutions grew 45% year over year. Autonomous drilling in Libya cut well time roughly in half, and automated footage reading rose 145% year over year. SLB shares trade at $48.28, down 11.48% over the past month, while Nvidia reported Q1 FY2027 revenue of $81.61 billion, up 85.2% year over year.

SLB posted a 40% gain over the last year, outpacing the S&P 500, even as its first quarter of 2026 was heavily disrupted by Middle East turmoil. Excluding a recent acquisition, revenue fell 7% year on year, adjusted EBITDA margin dropped 346 basis points to 20.3%, and free cash flow was slightly negative at negative $23 million. Management warned of an incremental earnings hit of $0.06 to $0.08 per share in the next quarter. The market appears to be looking through the short-term friction, betting that global energy security concerns will fuel a multi-year investment cycle, with management pointing to a positive outlook into 2027 and 2028. SLB is also building new growth engines, as its Digital division revenue grew 9% year on year and its data center solutions business surged 45%, expected to exit the year at a $1 billion run rate. However, the stock recently pulled back 5.16% to $50.33 after a U.S.–Iran peace agreement sent Brent crude down more than 5% to near $78 per barrel, and it has lagged peers BKR, HAL, and FTI, which gained 54%, 63%, and 90% respectively over the same period.

SLB has launched the SLB Digital Marketplace, a new platform offering around 200 digital products to help energy companies discover and integrate AI solutions. The marketplace includes Tela AI skills, agents, plugins, foundation models, data connectors, Delfi and Lumi SaaS applications, and workflow extensions from SLB and more than 30 partners. The open ecosystem aims to drive adoption of SLB's Delfi, Lumi, and Tela platforms, expanding revenue beyond traditional oilfield services. The launch aligns with the energy sector's shift toward agentic AI, positioning SLB at the center of the industry's digital evolution.

SLB announced plans to nearly double annual revenues in its digital business to as much as $2 billion by 2030. Digital business CFO Stephane Biguet said the company sees a path to approximately double current adjusted EBITDA for digital to $1.8 billion to $2 billion by 2030, with margins expanding to a range of 38% to 42% towards the end of the decade. SLB also expects annual digital spending to grow by an additional $10 billion by 2030 and is widening digital adoption by expanding connected equipment and data-led services, with about 35% of its electrical submersible pumps currently connected and monitored and a target to reach 60% by 2030. The company is pursuing growth by providing power equipment, turbines, and data solutions to data centers to tap into the AI infrastructure boom, and in March expanded its partnership with Nvidia to develop AI infrastructure and models for the energy sector.

Jim Cramer highlighted SLB, formerly Schlumberger, as a key source of insight into international oil production during a recent Mad Money episode. Cramer noted an upcoming analyst meeting by the oil service giant, emphasizing that no company knows more about whether countries and companies are stepping up drilling in places like Venezuela, the US, and Canada. He suggested that SLB's perspective could reinforce his view that inflation will decline. SLB was also the ninth-best performer in the S&P 500 in January, gaining 26%, and Cramer sees it as a potential beneficiary of increased drilling activity even if oil prices face pressure from Trump's policies.