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Chevron's Pivot to Data Centers Signals a New Growth Frontier
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Key Takeaways
Chevron outlines first data center power project in West Texas targeting 2027 start-up.
CVX plans a 2.5 GW off-grid natural gas facility with potential expansion to 5 GW capacity.
HAL and LBRT also expand into data center power, highlighting wider industry shifts toward new markets.
Chevron Corporation (CVX - Free Report) is taking a pragmatic, returns-focused step beyond its traditional integrated oil operations by moving into the rapidly expanding data center power market. During its annual Investor Day, the company outlined plans for its first AI data center power project in West Texas, targeting a start-up in 2027. Chevron is in exclusive negotiations with an undisclosed data center customer and expects to reach a final investment decision early next year. The proposed natural gas facility will generate 2.5 GW of off-grid power, with room to scale up to 5 GW.
As one of the largest producers in the Permian Basin, an area known for natural gas volumes that often exceed pipeline capacity, Chevron aims to turn this regional advantage into a strategic opportunity. The project expands on the company’s existing strengths while addressing rising power demands from hyperscalers, especially as U.S. grid constraints become more pressing.
Chevron began the groundwork for this shift in January 2025 through a partnership with investment firm Engine No. 1 and GE Vernova Inc. (GEV - Free Report) , a manufacturer of natural gas turbines. The collaboration focused on developing multi-gigawatt power plants co-located with data centers, supported by seven American-made GE Vernova 7HA turbines intended to supply facilities across the Southeast, Midwest and West America.
Other Energy Companies Expanding Into Data Center Services
Chevron is not alone in this strategic evolution. A few oilfield service companies are capitalizing on the data center boom as well.
In mid-October 2025, Halliburton Company (HAL - Free Report) unveiled a joint venture with VoltaGrid, a leader in distributed energy technologies, to deliver scalable and sustainable power solutions for data centers worldwide, starting in the Middle East. The collaboration combines VoltaGrid’s advanced power generation systems with Halliburton’s global presence and multi-region expertise. Together, the partners intend to offer turnkey energy solutions tailored to meet the growing power demands of modern data centers.
Liberty Energy Inc. (LBRT - Free Report) has also begun expanding beyond traditional services by building a robust distributed power generation business. Its recent partnership with nuclear innovator, Oklo, underscores its ambition to supply large-scale, energy-intensive customers such as data centers. The company expects to exceed 1 gigawatt of total generation capacity by 2027, positioning itself firmly within the AI-driven power ecosystem.
The Zacks Rundown on Chevron
Shares of Chevron have gained around 18.6% in the past six months, outperforming the Oil/Energy sector’s growth of 13%.
Image Source: Zacks Investment Research
From a valuation perspective — in terms of forward price-to-earnings ratio — Chevron is trading at a premium compared with the industry average. The stock is also trading above its five-year mean of 11.86.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Chevron’s 2025 earnings has been revised about 2% upward over the past 30 days.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Chevron's Pivot to Data Centers Signals a New Growth Frontier
Key Takeaways
Chevron Corporation (CVX - Free Report) is taking a pragmatic, returns-focused step beyond its traditional integrated oil operations by moving into the rapidly expanding data center power market. During its annual Investor Day, the company outlined plans for its first AI data center power project in West Texas, targeting a start-up in 2027. Chevron is in exclusive negotiations with an undisclosed data center customer and expects to reach a final investment decision early next year. The proposed natural gas facility will generate 2.5 GW of off-grid power, with room to scale up to 5 GW.
As one of the largest producers in the Permian Basin, an area known for natural gas volumes that often exceed pipeline capacity, Chevron aims to turn this regional advantage into a strategic opportunity. The project expands on the company’s existing strengths while addressing rising power demands from hyperscalers, especially as U.S. grid constraints become more pressing.
Chevron began the groundwork for this shift in January 2025 through a partnership with investment firm Engine No. 1 and GE Vernova Inc. (GEV - Free Report) , a manufacturer of natural gas turbines. The collaboration focused on developing multi-gigawatt power plants co-located with data centers, supported by seven American-made GE Vernova 7HA turbines intended to supply facilities across the Southeast, Midwest and West America.
Other Energy Companies Expanding Into Data Center Services
Chevron is not alone in this strategic evolution. A few oilfield service companies are capitalizing on the data center boom as well.
In mid-October 2025, Halliburton Company (HAL - Free Report) unveiled a joint venture with VoltaGrid, a leader in distributed energy technologies, to deliver scalable and sustainable power solutions for data centers worldwide, starting in the Middle East. The collaboration combines VoltaGrid’s advanced power generation systems with Halliburton’s global presence and multi-region expertise. Together, the partners intend to offer turnkey energy solutions tailored to meet the growing power demands of modern data centers.
Liberty Energy Inc. (LBRT - Free Report) has also begun expanding beyond traditional services by building a robust distributed power generation business. Its recent partnership with nuclear innovator, Oklo, underscores its ambition to supply large-scale, energy-intensive customers such as data centers. The company expects to exceed 1 gigawatt of total generation capacity by 2027, positioning itself firmly within the AI-driven power ecosystem.
The Zacks Rundown on Chevron
Shares of Chevron have gained around 18.6% in the past six months, outperforming the Oil/Energy sector’s growth of 13%.
Image Source: Zacks Investment Research
From a valuation perspective — in terms of forward price-to-earnings ratio — Chevron is trading at a premium compared with the industry average. The stock is also trading above its five-year mean of 11.86.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Chevron’s 2025 earnings has been revised about 2% upward over the past 30 days.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.