Energy businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Their momentum is also rising as lower interest rates, as well as AI energy needs, have incentivized higher capital spending. As a result, the industry has posted a 37.1% gain over the past six months, beating the S&P 500 by 29.1 percentage points.
Nevertheless, investors must be mindful as the cycle can unexpectedly turn. When this inevitably happens, only the elite companies will survive and ultimately thrive. With that said, here are two resilient energy stocks at the top of our wish list and one we’re swiping left on.
One Energy Stock to Sell:
Solaris Energy Infrastructure (SEI)
Market Cap: $4.36 billion
After acquiring Mobile Energy Rentals in 2024 to enter the distributed power market, Solaris Energy Infrastructure (NYSE: SEI) leases mobile power equipment and provides logistics services for oil and gas well completion.
Why Is SEI Not Exciting?
- Smaller revenue base of $692.1 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Gross margin of 40.6% reflects its high production costs and unfavorable asset base
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
At $76.80 per share, Solaris Energy Infrastructure trades at 55.3x forward P/E. Read our free research report to see why you should think twice about including SEI in your portfolio.
Two Energy Stocks to Buy:
Diamondback Energy (FANG)
Market Cap: $55.18 billion
Sporting one of Wall Street's most memorable ticker symbols, Diamondback Energy (NASDAQ: FANG) drills for and produces oil and natural gas from underground rock formations in the Permian Basin of West Texas and New Mexico.
Why Are We Backing FANG?
- Market share has increased this cycle as its 42.9% annual revenue growth over the last ten years was exceptional
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 80.2%
- FANG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Diamondback Energy is trading at $197.03 per share, or 9.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Chord Energy (CHRD)
Market Cap: $7.89 billion
Holding the largest acreage position in the Williston Basin, Chord Energy (NASDAQ: CHRD) drills for and produces crude oil, natural gas liquids, and natural gas in North Dakota's Williston Basin.
Why Is CHRD a Top Pick?
- Market share has increased this cycle as its 21.8% annual revenue growth over the last ten years was exceptional
- Economies of scale give it some operating leverage when demand rises
- Robust free cash flow margin of 22.3% gives it many options for capital deployment
Chord Energy’s stock price of $140.10 implies a valuation ratio of 7.6x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
