Chevron and Microsoft: Gas for the AI Boom
Nothing is currently driving the economy and the stock market more than the AI boom. Chevron also wants to participate in this as much as possible. Chevron is primarily known as an oil and gas company. The company produces crude oil and natural gas, processes both in refineries, and sells fuels, lubricants, and petrochemical products. While it does not want to become a traditional utility, it still aims to link its gas business to the growing energy needs of AI infrastructure. To that end, it is working with Microsoft on a mega-deal.
The US energy company is set to supply Microsoft with electricity for a planned data center in West Texas over a 20-year period. To this end, a 2.67 GW power plant is to be built next to the data center. This could supply power to around 1 million households. Initially, the electricity will not be fed into the public grid but will be provided directly to Microsoft’s cloud and AI infrastructure. According to Chevron, the project will primarily rely on brackish water and treated formation water for its water needs. A final investment decision is expected by the end of 2026.
For Chevron, the agreement represents another step into the business of generating its own electricity. The power plant is to be powered primarily by natural gas from the Permian Basin, where significant quantities of gas are available at low cost. The project will primarily use gas turbines from GE Vernova, supplemented by equipment from Solar Turbines, a Caterpillar subsidiary. The first electricity delivery could take place in 2028.
Zefiro Methane Benefits Indirectly from the AI Boom
So drilling for oil and gas continues in the US, yet there are huge issues with old wells. Nationwide, there are millions of abandoned or orphaned oil and gas wells, some of which were never properly plugged. Methane can leak from them—a greenhouse gas that, in the short term, has a significantly greater impact on the climate than CO₂. It becomes particularly problematic when gas enters the soil, groundwater, or buildings. The consequences range from environmental pollution to safety risks for residents. In the state of Pennsylvania alone, there are believed to be more than 350,000 old wells. The state is therefore accelerating remediation efforts and, according to its own figures, has plugged around 300 abandoned wells since Governor Josh Shapiro took office. However, the ratio of 300 to 350,000 illustrates just how great the challenge is.
This is precisely why Zefiro Methane’s stock is so interesting. The company has focused on monitoring, remediating, and permanently plugging abandoned oil and gas wells. According to the company, its subsidiary Plants & Goodwin has plugged approximately 200 wells since 2023. Over the past twelve months, more than 400 inspected wells have been added.
The market potential is enormous. According to estimates, there are around 2.2 million abandoned wells in the US, of which more than 1 million are said to require monitoring. Total costs for inspection and remediation are estimated at USD 400 to 600 billion. The issue was even addressed a few weeks ago on the ProSieben show "Galileo" Link.
Operationally, Zefiro is gaining momentum. In the third quarter of fiscal year 2025/26, revenue rose by more than 50% year-over-year to approximately USD 11 million. In addition, with the acquisition of assets from Viking Well Service, the company expanded its presence into five additional states, including Michigan, Illinois, and Indiana. The acquisition added rigs and specialized equipment and is expected to generate at least USD 10 million in additional annual revenue. This enables Zefiro to serve new regions and expand its position, particularly in the Appalachian Basin and the Midwest.
The latest news flow also underscores the growing order backlog. Zefiro secured four new corporate clients from the energy sector, including three publicly traded companies. The work involves the closure of production, storage, injection, and salt wells, initially primarily in Ohio and partly in Indiana. At the same time, the company began initial work under a three-year Construction Manager at Risk contract in Ohio, which is expected to generate approximately USD 19.6 million in revenue through May 2029. In addition, the company secured three additional projects from the Ohio Department of Natural Resources to decommission 12 abandoned wells and 1 water well. According to the company, these contracts have a total value of approximately USD 2.4 million and are funded by the US infrastructure program.
Given its growth and prospects, Zefiro—with a market cap of about CAD 70 million—appears to be anything but overvalued. If the company continues to step on the gas operationally, it can really only be a matter of time before the stock takes off.
https://youtu.be/nNodjcqNJMM?si=OHX05QBFlwErdiW3
Siemens Energy: Spin-off to Focus More on the AI Boom?
While Zefiro is indirectly benefiting from the AI boom and is still a hidden gem, Siemens Energy is among the stars. According to a report in “Manager Magazin,” the group is considering spinning off its “Transformation of Industry” (ToI) division to focus even more strongly on its core business. Among other things, the division develops and manufactures industrial compressors, steam turbines, energy storage systems, and hydrogen electrolysers. In the first half of 2025/26, TI generated approximately EUR 2.7 billion in revenue. Relative to the group’s total revenue of about EUR 20 billion, this represents a share of around 13.5%. The division employs approximately 17,000 people worldwide. Siemens Energy merely confirmed that the portfolio is regularly reviewed to ensure the best strategic and financial positioning. No decision has been made as of yet.
One possible structure apparently under consideration is to initially divest approximately 60% of the shares via a spin-off or initial public offering (IPO) and retain 40% within the group. The rationale is the assumption that TI could invest, grow, and achieve higher profitability more easily outside the group. Internal scenarios are said to project revenue of EUR 10 to 11 billion and earnings of EUR 1.6 to 1.8 billion for 2031. However, this is an optimistic scenario, and fresh growth capital would be needed.
Analysts at Jefferies would welcome the spin-off. Siemens Energy could focus more strongly on gas turbines and energy grid technology, where the potential is greater. In addition, the dividend could rise more sharply. The analysts reaffirm their “Buy” recommendation for Siemens Energy stock. They estimate the fair value at EUR 215. Yesterday, the share was trading at around EUR 160.
The AI boom is likely to continue electrifying the stock market. But after the sharp price increases, investors should keep a close eye on valuations. Siemens Energy is one of the big beneficiaries. However, the stock has already performed well and will not forgive any mistakes. Zefiro Methane is a hidden gem. The problem of abandoned and orphaned wells is enormous and offers the company equally enormous opportunities. Drilling is set to continue due to the AI boom. Chevron is benefiting from its natural gas business but remains heavily dependent on the oil price.
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