ExxonMobil (NYSE:XOM) is one of the top energy names in President Donald Trump’s financial disclosures from earlier this year. The stock is up about 27% so far this year. But does a presidential trade make it a buy today? Let’s break down what’s actually driving the stock.
Exxon benefits directly from rising oil prices amid the Iran war. Its upstream segment was projected to see a multibillion-dollar earnings lift for the second quarter compared to the first, driven almost entirely by higher realized prices rather than any change in production. That’s the logic behind buying an oil major right as a Middle East conflict escalates.
The Bull Case
Exxon’s balance sheet gives it room to lean into higher prices. Net debt relative to EBITDA sits under 1x, among the lowest in the industry, and the company is on pace to repurchase roughly $20 billion of stock this year. Guyana production just hit a quarterly record above 900,000 barrels a day, and the company has applied to drill dozens more wells there.
In the Permian Basin, Exxon is now the largest operator following its Pioneer acquisition and expects to roughly double output there by 2030. Longer term, natural gas tied to data center power demand is another growth lever bulls point to, with McKinsey estimating data centers could eventually account for more than a tenth of total U.S. power demand.
The Case for Caution
There’s a demand question sitting underneath the price spike. The IEA sees global oil demand softening this year, and even OPEC, which tends to run more optimistic, trimmed its own demand growth forecast. If the Iran-driven premium in oil prices fades if another ceasefire takes place, some of Exxon’s near-term earnings boost fades with it.
What Else Was in the Trade
Exxon wasn’t the only energy name in Trump’s portfolio. Chevron (NYSE: CVX) was another noteworthy name in the portfolio.
Chevron’s dividend yield runs meaningfully higher than Exxon’s, roughly 3.7% versus Exxon’s roughly 2.7%, and it just posted one of its stronger quarters, beating adjusted EPS estimates by about 45% on production that jumped 15% year over year after its Hess acquisition closed. Chevron returned billions to shareholders through buybacks and dividends in that same quarter, extending a streak of five-billion-dollar-plus shareholder payouts for 16 straight quarters.
The trade-off is integration risk and a richer valuation. Chevron is still digesting the Hess deal, carries exposure to politically volatile Venezuela, and trades at a higher earnings multiple than Exxon right now. Exxon counters with a longer dividend-growth streak, a lower net-debt-to-capital ratio, and the cheaper of the two earnings multiples. If the priority is maximizing current yield, Chevron is the stronger pick today. If the priority is balance-sheet strength and the cheaper entry point, Exxon still has the edge.
Clearbridge Dividend Strategy stated the following regarding Exxon Mobil Corporation (NYSE:XOM) in its Q1 2026 investor letter:
“We have focused our energy investments in our highest conviction ideas: Williams and Exxon Mobil Corporation (NYSE:XOM). ExxonMobil, however, as the largest private oil producer in the world, directly benefits from the events in the Persian Gulf. Higher oil prices will drive bumper earnings and cash flows, but that is not the only thing Exxon has going for it. Exxon’s robust production growth from low-cost basins will propel volume increases and margin expansion through the end of the decade. We have modestly trimmed our position as the stock has soared, but we maintain a significant investment in the company.”
Photo by Raymond Kotewicz on Unsplash
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