Here is Why Chevron (CVX) is a Favorite Among Hedge Funds

Chevron Corporation (NYSE:CVX) is the energy stock boasting the highest number of hedge fund investors at the end of Q1 2026 in the Insider Monkey database. The American oil major ended the first quarter with 103 hedge fund holders, with a total investment value of over $29.6 billion. This is up from 86 hedge fund investors with a cumulative investment of just under $26.3 billion in the previous quarter.

Notably, the coveted position of Hedge Funds’ Favorite Energy Stock had been held by ExxonMobil Holdings Corporation (NYSE:XOM) for many quarters now. However, America’s largest oil and gas company was finally overthrown by Chevron at the end of Q1 when its hedge fund investors fell to 94, down from 98 in the previous quarter.

Ken Fisher’s Fisher Asset Management held the largest stake in Chevron Corporation (NYSE:CVX) at the end of Q1, with a total value of around $2.76 billion. Berkshire Hathaway, one of the company’s most significant shareholders, slashed its stake in CVX by roughly 35% during the first quarter of the ongoing year. The decision came under the helm of the new CEO, Greg Abel, who capitalized on the soaring oil prices.

Photo by Luis Ramirez on Unsplash

Bull Case: 

Chevron Corporation (NYSE:CVX) comfortably exceeded Wall Street expectations and delivered its highest quarterly profit in at least six years in Q2 2026, lifted by the soaring energy prices amid the Middle East conflict. Even aside from this recent boost, Chevron remains a promising addition for any portfolio, thanks to its strong global presence, low-cost and long-lived assets, solid track record of dividend growth, and a high yield of 3.61%.

Importantly, Chevron also has less Middle East production compared to its peers, like Exxon or TotalEnergies. This significantly limits its exposure to the ongoing supply disruptions in the region while also allowing it to reap the benefits of the high oil prices. The company’s profits are also expected to receive a boost from its ongoing cost-cutting program, as it remains on track to deliver its $3 to $4 billion structural cost reduction target by the end of 2026. The second-largest US oil major revealed in its last earnings call that it expects its shale ​production costs to fall by 25% per barrel this year compared to 2025, thanks to efficiencies.

Moreover, Chevron’s recent acquisition of Hess has granted it access to the vast and low-cost assets in Guyana, while its dominant position as the largest foreign oil producer in Venezuela also adds to its appeal.

Bear Case: 

While Chevron’s Q2 results were exceptionally strong, they were supported by the extraordinary market conditions as a result of the US-Iran war. If a peace deal is achieved and global supplies return to normal, crude prices would fall and significantly impact the company’s upstream earnings and cash flow. Moreover, the energy giant’s refining margins would also take a hit in the event of a peace deal, leading to weaker downstream profits.

Additionally, while the $53 billion Hess acquisition has added Guyana’s world-class assets to Chevron’s portfolio, the long-term economics of the deal would look much less compelling in the event of a low-priced environment, especially as the world moves away from fossil fuels.

Conclusion:

Despite the fact that its impressive Q2 results may represent peak-cycle earnings rather than a new normal, Chevron Corporation (NYSE:CVX) presents a compelling investment case due to its strong fundamentals. These include its high-quality global asset base, rising production, robust balance sheet, efficient cost-cutting measures, and an attractive dividend yield, etc.

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Disclosure: None. This article is originally published at Insider Monkey.