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NOV Stock Gains 32% in Six Months: Should Investors Hold or Move On?
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Key Takeaways
NOV shares gained 31.5% over the past six months, outperforming its sub-industry, sector and key peers.
NOV sees demand rising from a new energy equipment cycle, with subsea backlog extending into 2028.
NOV faces risks from Middle East disruptions, tariff costs, inflation pressures and higher capital spending.
Over the past six months, NOV Inc.’s (NOV - Free Report) shares have risen 31.5% compared with gains of 24.1% for the Mechanical and Equipment Oil and Gas sub-industry and 22.4% for the broader oil and energy sector. During the same time period, the stock outperformed its competitors, USA Compression Partners, LP (USAC - Free Report) and Oil States International, Inc. (OIS - Free Report) , which gained 15.1% and 21.8%, respectively.
NOV, USAC, OIS’ Six-Month Stock Performance
Image Source: Zacks Investment Research
NOV is one of the leading equipment and technology providers that serves a wide range of energy companies across 61 countries and is focused on delivering long-term, above-average returns. The company leverages its scale, proprietary technologies and manufacturing model, which is less asset-intensive than many of its peers to support oil, gas and renewable energy development.
With broad capabilities across drilling, completion and production, NOV continues to advance automation, predictive analytics and maintenance technologies that improve efficiency and lower environmental impact. Over the past six months, shares of the company have risen leaving investors wondering whether the recent positive trend will continue or whether NOV is due for a pullback. Before we dive into how investors should react, let us take a quick look at its current standing and outcomes.
What Is Working in Favor of NOV Stock?
Positioned for a Potential Multi-Year Upcycle in Energy Investment: NOV’s management believes the industry is entering a new capital equipment cycle driven by energy security concerns, production-restoration needs and renewed offshore investment. The company expects higher demand for drilling, completion, production and offshore equipment as operators increase spending after years of underinvestment. This creates a favorable long-term backdrop for NOV's equipment portfolio.
Strong Offshore Exposure With Growing Backlog: NOV's subsea flexible pipe business has become a major growth engine. Strong demand has extended backlog visibility into 2028, prompting the company to approve a $200 million capacity expansion in Brazil. Offshore production equipment bookings remained healthy, supported by large subsea and FPSO-related projects. This segment benefits from improving deepwater economics and increasing offshore development activity worldwide. Within the mechanical and equipment sub-industry, peer companies like USA Compression and Oil States International are also benefiting from the rising demand due to new deepwater projects.
Evidence of Operational Improvement and Cost Discipline: The company has reduced global headcount by about 8%, exited more than 40 facilities, established shared-service capabilities in India and invested in IT systems to improve efficiency. Management expects these cost-out initiatives to increasingly offset tariff and inflationary pressures beginning in the second half of 2026, supporting margin expansion over time.
Positive 2026 Earnings Estimates: The Zacks Consensus Estimate for NOV’s 2026 earnings is pegged at 85 cents per share, indicating 37.1% year-over-year growth. NOV’s peer companies also have a positive outlook for their 2026 earnings estimates. The Zacks Consensus Estimate for USA Compression and Oil States International indicates expected year-over-year earnings growth of 19.8% and 40.5%, respectively.
NOV’s Earnings Estimate
Image Source: Zacks Investment Research
What’s Causing the Pressure on NOV Stock?
Significant Exposure to Geopolitical Risk in the Middle East: The first quarter results were materially affected by the conflict in the Middle East, which management said reduced revenues by about $54 million and EBITDA by about $32 million. Logistics disruptions, delayed customer inspections, suspended projects and higher freight costs all negatively impacted operations. Management acknowledged that conditions remain fluid and that future performance depends heavily on how the situation evolves.
Margins Are Being Pressured by Tariffs & Inflation: NOV reported that first-quarter margins were negatively affected by roughly $30 million of increased tariff costs year over year, along with higher raw material, freight and medical costs. While management expects cost savings to eventually offset some of these pressures, tariffs are expected to remain a meaningful expense going forward. Persistent inflation could continue to weigh on profitability.
Capital Spending Is Increasing: NOV plans to invest between $340 million and $370 million in capital expenditures during 2026, including a $200 million expansion of its subsea flexible pipe manufacturing facility in Brazil. While this investment reflects management’s confidence in long-term offshore demand, it also raises near-term financial and execution risks. Higher capital spending can temporarily reduce free cash flow and limit financial flexibility. Large-scale expansion projects are vulnerable to construction delays, cost inflation, supply-chain disruptions and slower-than-expected demand growth. If offshore activity or energy investment levels fail to meet expectations, returns from these investments could fall short, potentially weighing on profitability and shareholder returns.
Earnings Revisions: The Zacks Consensus Estimate for NOV’s 2026 earnings has been revised downward by about 2.3% over the past 30 days.
NOV’s EPS Revision Trend
Image Source: Zacks Investment Research
Final Words on NOV Stock
NOV stock stands out, backed by its recent outperformance against the broader industry, sector and peer companies —USAC and OIS. The company continues to benefit from offshore and deepwater exposure, growing subsea backlog and improving operational efficiency. Its leadership in drilling automation, production technologies and offshore equipment positions it well to capitalize on a potential multi-year energy investment cycle. Expectations for solid earnings growth in 2026 highlight the company’s long-term potential.
However, NOV remains exposed to geopolitical disruptions in the Middle East, while persistent tariff and inflation pressures continue to weigh on margins. Rising capital expenditures increase execution risk and constrain free cash flow. Recent downward earnings estimate revisions suggest that near-term operating conditions remain challenging. Considering these factors, existing investors may benefit from maintaining their positions in the Zacks Rank #3 (Hold) company.
View the Zacks #1 Rank List
Image: Shutterstock
NOV Stock Gains 32% in Six Months: Should Investors Hold or Move On?
Key Takeaways
Over the past six months, NOV Inc.’s (NOV - Free Report) shares have risen 31.5% compared with gains of 24.1% for the Mechanical and Equipment Oil and Gas sub-industry and 22.4% for the broader oil and energy sector. During the same time period, the stock outperformed its competitors, USA Compression Partners, LP (USAC - Free Report) and Oil States International, Inc. (OIS - Free Report) , which gained 15.1% and 21.8%, respectively.
NOV, USAC, OIS’ Six-Month Stock Performance
Image Source: Zacks Investment Research
NOV is one of the leading equipment and technology providers that serves a wide range of energy companies across 61 countries and is focused on delivering long-term, above-average returns. The company leverages its scale, proprietary technologies and manufacturing model, which is less asset-intensive than many of its peers to support oil, gas and renewable energy development.
With broad capabilities across drilling, completion and production, NOV continues to advance automation, predictive analytics and maintenance technologies that improve efficiency and lower environmental impact. Over the past six months, shares of the company have risen leaving investors wondering whether the recent positive trend will continue or whether NOV is due for a pullback. Before we dive into how investors should react, let us take a quick look at its current standing and outcomes.
What Is Working in Favor of NOV Stock?
Positioned for a Potential Multi-Year Upcycle in Energy Investment: NOV’s management believes the industry is entering a new capital equipment cycle driven by energy security concerns, production-restoration needs and renewed offshore investment. The company expects higher demand for drilling, completion, production and offshore equipment as operators increase spending after years of underinvestment. This creates a favorable long-term backdrop for NOV's equipment portfolio.
Strong Offshore Exposure With Growing Backlog: NOV's subsea flexible pipe business has become a major growth engine. Strong demand has extended backlog visibility into 2028, prompting the company to approve a $200 million capacity expansion in Brazil. Offshore production equipment bookings remained healthy, supported by large subsea and FPSO-related projects. This segment benefits from improving deepwater economics and increasing offshore development activity worldwide. Within the mechanical and equipment sub-industry, peer companies like USA Compression and Oil States International are also benefiting from the rising demand due to new deepwater projects.
Evidence of Operational Improvement and Cost Discipline: The company has reduced global headcount by about 8%, exited more than 40 facilities, established shared-service capabilities in India and invested in IT systems to improve efficiency. Management expects these cost-out initiatives to increasingly offset tariff and inflationary pressures beginning in the second half of 2026, supporting margin expansion over time.
Positive 2026 Earnings Estimates: The Zacks Consensus Estimate for NOV’s 2026 earnings is pegged at 85 cents per share, indicating 37.1% year-over-year growth. NOV’s peer companies also have a positive outlook for their 2026 earnings estimates. The Zacks Consensus Estimate for USA Compression and Oil States International indicates expected year-over-year earnings growth of 19.8% and 40.5%, respectively.
NOV’s Earnings Estimate
Image Source: Zacks Investment Research
What’s Causing the Pressure on NOV Stock?
Significant Exposure to Geopolitical Risk in the Middle East: The first quarter results were materially affected by the conflict in the Middle East, which management said reduced revenues by about $54 million and EBITDA by about $32 million. Logistics disruptions, delayed customer inspections, suspended projects and higher freight costs all negatively impacted operations. Management acknowledged that conditions remain fluid and that future performance depends heavily on how the situation evolves.
Margins Are Being Pressured by Tariffs & Inflation: NOV reported that first-quarter margins were negatively affected by roughly $30 million of increased tariff costs year over year, along with higher raw material, freight and medical costs. While management expects cost savings to eventually offset some of these pressures, tariffs are expected to remain a meaningful expense going forward. Persistent inflation could continue to weigh on profitability.
Capital Spending Is Increasing: NOV plans to invest between $340 million and $370 million in capital expenditures during 2026, including a $200 million expansion of its subsea flexible pipe manufacturing facility in Brazil. While this investment reflects management’s confidence in long-term offshore demand, it also raises near-term financial and execution risks. Higher capital spending can temporarily reduce free cash flow and limit financial flexibility. Large-scale expansion projects are vulnerable to construction delays, cost inflation, supply-chain disruptions and slower-than-expected demand growth. If offshore activity or energy investment levels fail to meet expectations, returns from these investments could fall short, potentially weighing on profitability and shareholder returns.
Earnings Revisions: The Zacks Consensus Estimate for NOV’s 2026 earnings has been revised downward by about 2.3% over the past 30 days.
NOV’s EPS Revision Trend
Image Source: Zacks Investment Research
Final Words on NOV Stock
NOV stock stands out, backed by its recent outperformance against the broader industry, sector and peer companies —USAC and OIS. The company continues to benefit from offshore and deepwater exposure, growing subsea backlog and improving operational efficiency. Its leadership in drilling automation, production technologies and offshore equipment positions it well to capitalize on a potential multi-year energy investment cycle. Expectations for solid earnings growth in 2026 highlight the company’s long-term potential.
However, NOV remains exposed to geopolitical disruptions in the Middle East, while persistent tariff and inflation pressures continue to weigh on margins. Rising capital expenditures increase execution risk and constrain free cash flow. Recent downward earnings estimate revisions suggest that near-term operating conditions remain challenging. Considering these factors, existing investors may benefit from maintaining their positions in the Zacks Rank #3 (Hold) company.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.