Patrick Bilo @13heimdall: "Those who've followed me for..."

Germany

Those who've followed me for a while already know: I like a coherent story, a clear development arc, and a compelling vision for the future. Schlumberger offers all of that. Here's the story: $SLB (SLB Ltd) (formerly Schlumberger): From Wireline Pioneer to AI Infrastructure Player History: SLB's roots go back to 1912/1926 (Conrad & Marcel Schlumberger, Paris); in 1927 the first electrical well log was recorded in Alsace – still the foundation of the wireline business today. Over decades, SLB grew into an integrated oilfield services group (2010: acquisition of Smith International). The 2022/2025 rebrand to "SLB" signaled a broader positioning as an energy technology company. 2023: formation of the OneSubsea JV (SLB holds 70%) and the acquisition of ChampionX (~$7.8bn) to strengthen production chemicals and artificial lift. FY2024 revenue: $36.29bn, net income $4.46bn, ~111,000 employees. Current situation (as of close, July 24, 2026): The stock trades around $52.4 (52-week range: $31.64–$58.82) after jumping roughly 11% on July 24 — driven by strong Q2 numbers and positive reception of the data center alliance. Market cap ~$78.4bn, P/E ~22–23. Analyst consensus price target: ~$61.8 (range $54–$71). Q2 2026: revenue $8.97bn (+3% QoQ, +5% YoY), adjusted EPS $0.55 (consensus: $0.51), free cash flow $716m. Net income of $786m was still 22% below the prior-year period — the reason: the Middle East (65% of regional revenue), hit by the ongoing conflict there. Other regions more than offset the decline. Guidance: Q3 +3–4% sequentially, Q4 revenue above $10bn, both assuming a gradual Middle East recovery. No 2027 guidance yet; risk of renewed escalation: up to $150m lower quarterly revenue. At the same time, Brent crude has risen roughly 30% within a month, briefly topping $100 (Middle East escalation, concerns over the Strait of Hormuz). Ahead of the results, several analysts (including Barclays, Morgan Stanley, BofA) had cautiously trimmed price targets — the earnings beat has, at least for now, pushed back on that skepticism. New segment: AI data center infrastructure The most strategically interesting growth area sits outside the oil cycle. SLB is applying its expertise in modular, prefabricated construction (honed in oilfield work) to data centers: since April 2024, it has already shipped more than 1.3 gigawatts of modular infrastructure for data center projects. Nvidia partnership (expanded March 2026): SLB serves as the design partner for Nvidia's modular "DSX" AI factories and is co-developing an "AI Factory for Energy" running on SLB's Delfi and Lumi platforms. Liberty Energy alliance (July 14, 2026): SLB provides modular infrastructure, Liberty Energy provides power generation and behind-the-meter solutions — power supply independent of grid connection, a key bottleneck in AI data center build-out. Numbers: Data Center Solutions revenue grew 33% QoQ and 80% YoY in Q2, targeting an annualized run rate above $2bn by end of 2027. Digital annual recurring revenue has already crossed $1bn (+15% YoY). Strategically significant: this business follows the logic of global AI build-out rather than the oil investment cycle — per CEO Le Peuch, a growing decoupling. Relative to the overall group ($36bn annual revenue), the segment is still small and lacks a multi-year track record. OneSubsea: a run of deepwater awards In parallel, major deepwater contracts are piling up: Petrobras (Brazil, Atapu/Sépia pre-salt fields, Búzios), Equinor (Norway, Fram Sør), BP (Gulf of America, Thunder Horse), and CNOOC (China, Kaiping 18-1). Management says final investment decisions in deepwater are up roughly 30% — multi-year, high-margin projects that improve earnings visibility. Capital returns & ChampionX Q2 dividend: $0.295/share (yield: ~2.25%). Q2 buybacks: $648m (executed before the rally, i.e. at lower prices). 2026 target: at least $2.4bn in buybacks, over $4bn in total shareholder returns. ChampionX increasingly contributes more stable, less cyclical revenue from production chemicals and artificial lift. Risks Heavy dependence on the Middle East (65% of regional revenue) Oil price ambivalence: a high price isn't automatically positive if it stems from supply disruptions Data center segment still small/young, targets unproven No 2027 guidance yet — mid-term statements remain intentions, not commitments Bottom line SLB is at an inflection point: the cyclical core business remains Middle East-dependent, but OneSubsea (deepwater) and, above all, the new AI data center business (Nvidia, Liberty Energy) are creating two growth lines with a different, structurally expanding logic. Whether this thesis holds will only become clear over the coming quarters — particularly whether the Middle East recovery plays out as planned and whether the data center business converts its high growth rates into meaningful group-level revenue. Not investment advice. As of July 24, 2026. $SPX500, $NSDQ100

Not investment advice. The author may have financial interests in the mentioned instruments.

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SLB Ltd

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