3 Energy Stocks That AI is Loving in July

Stocks to buy

Lately, I’ve been spending a few hours each day conducting macro market research with various artificial intelligence (AI) tools. I’ve researched different sectors of the market to be able to get a broad overview of the current market, and without a doubt, one of the sectors that I like the most is the energy sector. The energy sector’s significance lies in the fact that energy is a consistent, necessary component of human survival. With OpenAI’s ChatGPT assisting, I’ve found that there are a few high-potential energy stocks to take advantage of soon. Many of these stocks are at an incredible discount and have the potential for great returns. 

In a conversation with ChatGPT, I asked for some promising energy stocks to invest in during the month of July. It has thrown me a few interesting choices, but let’s take a brief look at the most promising options:

ConocoPhillips (COP)

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ConocoPhillips (NYSE:COP) is a global energy company engaged in the exploration, production, refining and marketing of oil and natural gas. The company operates across the entire energy industry value chain, from resource extraction to processing and distribution. Despite the challenges it has faced in a volatile energy environment, ConocoPhillips has demonstrated strength in its’ financial earnings reports.

In Q1 2023, ConocoPhillips reported adjusted earnings of $2.38 per share, beating analysts expectations. Although the company’s total revenue declined compared to the previous year, it remains an attractive option for investors. However, it is important to note that some analysts’ earnings estimates have declined in recent months, indicating some concern about the company’s future performance.

In terms of stock performance, ConocoPhillips shares have experienced a decline in the last quarter and year-to-date. Despite this, ConocoPhillips remains a company with interesting investment potential. Wall Street experts estimate the price target for COP stock over the next 12 months at $134.00.

EOG Resources (EOG)

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Also on ChatGPT’s list of high-potential energy stocks is EOG Resources (NYSE:EOG). This company engages in the exploration, development, production and marketing of crude oil, natural gas liquids and natural gas.

EOG Resources has achieved impressive results in terms of financial performance and profit generation. During the last reporting period, the company earned adjusted net income of $1.6 billion and generated $1.1 billion of free cash flow, indicating its profitability and earning power. These positive financial results are complemented by EOG Resources’ declaration of a regular quarterly dividend and share repurchase.

EOG Resources overall production exceeded expectations, suggesting better-than-expected operating performance. In addition, the company was able to maintain its operating and depreciation, depletion and amortization costs below anticipated levels, indicating improved profitability and financial efficiency.

Plains GP Holdings (PAGP)

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Plains GP Holdings (NASDAQ:PAGP) is a company that owns a 14% interest in Plains All American Pipeline (NASDAQ:PAA). Both PAA and PAGP are engaged in the transportation, storage and marketing of crude oil, natural gas and natural gas liquids.

In the first quarter of 2023, both companies reported strong financial results, with net income of $422 million and adjusted EBITDA of $715 million. These impressive results were due to higher volumes of crude oil and natural gas liquids transported through their pipelines.

Despite macroeconomic uncertainty, both companies remain confident in their ability to deliver on their 2023 plan to focus on disciplined capital investments. They expect to generate $1.6 billion of free cash flow this calendar year, which will enable them to continue investing in their business and returning value to shareholders.

As of this writing, Gabriel Osorio-Mazzilli did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.

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