At the end of May 2, 2025, the Global Energy Sector is undervalued by 13.1%, compared to 5.3%of the general market. The current fall in the energy sector is mainly attributed to the current trade war caused by the rates of President Trump and its consequence planned for world economic slowdown. In addition, world prices for the crude crown have fallen a lot since last month, with the gross price of West Texas Intermediate (WTI) that is currently around the $ 56 mark, a level it last reached during the Covid-19 Pandemic in 2021.
The crude thing was a new success this weekend after Opec+ stunned the market, announcing a larger increase in production than expected in June. This follows a similar increase announced in May and indicates a strong investment of the group’s efforts to defend raw prices. It seems that Saudi Arabia has adopted a low -priced strategy, with the aim of disciplinary members overproductive members such as Kazakhstan and Iraq. This could also be part of Riyadh’s efforts to build good relationships with Donald Trump, who has recently called on the kingdom to increase production in order to reduce prices. Given the high market volatility, it is not surprising that short vendors increased their bets on oil and gas stocks in March, with a short interest in the energy sector reaching 2.58% compared to 2.52% in February.
That said, while oil can have a bleak perspective, there are other sectors within the energy business that seem very promising right now. A significant growth engine in the world energy industry is the boom of continuous AI and its hungry data centers. According to the International Energy Agency, the demand for the global electricity of the data centers is established more than twice the 2030 to the 945 hours of Terawatt (TWH), slightly more than all the consumption of electricity in the current Japan. The increase in AI is also remodeling U.S. electric markets, as according to Bnef, the country’s data center demand is expected to increase from 3.5% of total electricity demand to 8.6% by 2035.
Big Tech seems to have jumped to the IA boom, with the commitments of investing hundreds of billions of dollars to build data centers and to ensure their energy supply. In fact, this strategic movement has injected a new life to sectors such as Nuclear, which has regained its point after several technological giants met outside the Ceraweek Conference in March and has signed a commitment to support the goal of triple at least the world’s nuclear energy capacity by 2050.
That said, there has been recent concerns that the power demand required by the balloon data center industry could have been overestimated, which led to a number of energy actions that recorded significant falls not so long ago. However, the most recent results than expected of cloud companies and the AIs of some American technology giants suggest that these fears may have been overwhelmed. Realtors commercial executives have stated that, while there has been a pause at some CAPEX in the Data Center, it is likely to be temporary, with hundreds of billions of dollars yet to spend.
Devon Energy Corporation (DVN): Between the undervalued energy actions to buy according to the coverage funds
A group of Hazmat’s technicians who inspect a natural gas storage tank.
To collect data from this article, we sought companies that operate in the energy sector with P/E relations below 15 from the closing of May 2, 2025.Then we identified companies that have obtained substantial returns for the last five years, in order to eliminate potential value traps. In the end, we have selected companies with the largest number of coverage fund holders in the database of Monkey Insider, from the fourth quarter of 2024. Then The most undervalued energy actions according to the coverage funds.
At Insider Monkey, we are obsessed with the stocks that cover the funds. The reason is simple: our research has shown that we can overcome the market by imitating the best stock options for the best coverage funds. The strategy of our quarterly bulletin selects 14 stocks of small layers and large layers each quarter and has returned 275% since May 2014, surpassing its reference point at 150 percentage points (Check out more details here)).
Coverage bottom number: 55
Ratio P/E Forward from May 2: 7.93
Devon Energy Corporation (NYSE: DVN) is an independent energy leading company dedicated to finding and producing natural and oil gas, with operations focused on the coast in the United States.
Devon Energy Corporation (NYSE: DVN) had a strong quarter of 2024 as a $ 1.16 adjusted EPS with expectations of $ 1. The company’s income also increased by 6.22% to $ 4.4 billion, exceeding estimates of about $ 155.3 million. Devon’s oil production reached a maximum of 398,000 BPD during the quarter, while its global production reached 848,000 BOE/D. Such strong performance helped the Williston Basin Business contribution, which Devon acquired from Grayson Mill Energy in a $ 5 billion agreement last year.
Devon Energy Corporation (NYSE: DVN) has invested a lot in growing its scale in several North -American oil and gas production basins to reduce costs and improve their capacity to produce free cash flows. As a result, the company reported $ 3 billion in free cash flow last year, with the aim of generating an additional $ 1 billion by the end of 2026. The oil and gas producer aims to achieve it reducing the costs of perforation and completion and improving operating margins. DVN also returned $ 2 billion to their shareholders by 2024 and is now aimed at a 70% cash return payment in current prices.
Generally, DV occupies 8th place In our list of the most undervalued energy shares to buy according to the coverage funds. Although we recognize the potential of DVN as an investment, our conviction lies in the belief that the actions of the AI have a greater promise to obtain higher returns and to do it in a shorter period. There is an AI stock that increased since the beginning of 2025, while the popular AI actions lost around 25%. If you are looking for a stock of Ia more promising than DVN but you are quoting less than five times, see our report on this Ia stock cheap.
