Rising Energy Demand Signals Continued Growth Potential for Select Stocks, Analyst Advises Investors

Picking stocks is a lot like shopping for the best deals at the grocery store—you want to find quality items that don’t break the bank. That’s why it’s important to look at companies that offer good value and have strong potential to grow your money over time.

Why Energy and Tech Stocks Matter for Investors

Energy and technology are two big parts of the stock market. When these sectors do well, it can boost your portfolio, like adding strong players to a sports team. But when they struggle, it can drag down your returns. Knowing which companies are smart buys can help you stay ahead.

Bull Case: Reasons to Be Excited

• APA Corp.: This oil and gas company is good at keeping costs low while making more oil. It has a 20% free cash flow yield, which means it brings in a lot of cash for each dollar it earns. It also has oil fields in several places, making it less risky if one area has trouble.
• EOG Resources: EOG is known for being efficient and careful with money. It has little debt, which helps it handle tough times. With more power needed for things like artificial intelligence, demand for what EOG produces could rise.
• Qualcomm: This tech company makes chips for phones and new gadgets. It’s growing fast, especially in cars and the “Internet of Things,” where devices talk to each other. Qualcomm is also one of the cheapest semiconductor stocks compared to its profits.

Bear Case: Reasons to Be Cautious

• APA Corp.: The stock hasn’t done much this year, only up 2%. Most analysts think you should just hold it, not buy more.
• EOG Resources: Even though it’s a favorite on Wall Street, the stock has dropped over 14% this year. If energy prices fall or demand doesn’t pick up, EOG could struggle.
• Qualcomm: The stock is already up 24% in six months. If the tech sector cools off or growth slows, there’s a risk it could drop.

Extra Perspective: What History Tells Us

Historically, energy stocks can swing up and down a lot. For example, in 2022, the energy sector was the best performer in the S&P 500, rising over 50% while most other sectors fell (source). But in other years, energy has lagged behind. This shows that timing and careful research are key.

Tech stocks like Qualcomm can also be volatile. According to a McKinsey report, the semiconductor industry has seen big ups and downs, but long-term demand is expected to keep growing as more devices get connected around the world.

Investor Takeaway

• Look for companies with strong cash flow and low debt—these often weather storms better.
• Diversify: Don’t put all your money in one sector. Mix energy, tech, and other areas to lower risk.
• Watch earnings and news. Sometimes, a good report can boost a lagging stock, like APA’s recent jump.
• Be patient. Both energy and tech can be bumpy rides, but picking quality companies and holding for the long run can pay off.
• Always do your own homework and check multiple sources before buying any stock.

For the full original report, see CNBC