Oil services as unappreciated AI plays
The guest argued that oil services companies represent an overlooked way to play the artificial intelligence theme due to their asset control and optimization potential.
The argument
While most investors are focused solely on semiconductor chips, oil services firms like Schlumberger control valuable physical assets and have significant AI integration potential. This sector has already begun outperforming the broader S&P 500.
The thesis, stress-tested
✓ What validates it
- ✓Schlumberger announces high-margin AI software contracts with major producers
- ✓Oil services sector continues outperforming the S&P 500
▸ Risks discussed
- ▸A sharp decline in crude oil prices dampening capital expenditure in oil services
- ▸AI integration benefits take longer to materialize in earnings
Hear it yourself
"I wanna start with what is it exactly that started last Friday because it certainly seems to be the beginning of something significant in the markets. Is this the market finally waking up to the Iran conflict, or is it a reaction to the jobs reports and maybe expectations of of rate cuts being harder to come by, or is it something else? And by all means, refer to the slide deck as we dive in. Sure. Yeah. It's it's definitely a fourth quarter two thousand twenty one redux where everybody's kind of been in a transitory trance. Inflation is transitory again, which we were in in the fourth quarter of two thousand twenty one."
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