Is SLB (SLB) Quietly Recasting Its Energy Moat Through AI Deals And New US Capacity?

• SLB has recently agreed to expand its Shreveport, Louisiana facility with a US$30 million investment and 600 additional jobs, while also signing a collaboration with Shell to co-develop digital and AI tools for upstream energy operations using its Lumi™ data and AI platform.
• Together, these moves highlight how SLB is tying advanced manufacturing capacity to AI-enabled software partnerships, aiming to deepen its role across both physical infrastructure and digital workflows in the energy sector.
• We’ll now examine how SLB’s US$30 million Shreveport expansion shapes its existing investment narrative around digital growth and diversification.

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SLB Investment Narrative Recap

To own SLB, you have to believe its mix of traditional oilfield technology, higher margin digital offerings, and low carbon initiatives can offset cyclical swings in upstream spending. The Shreveport expansion and Shell AI collaboration reinforce the digital and infrastructure angle, but they do not materially change the key near term catalyst of digital adoption or the biggest risk from potential cuts in global upstream budgets and broader macro volatility.

The Shell collaboration around Lumi data and AI is most relevant here because it directly supports SLB’s push into higher margin, recurring digital workflows across subsurface, well construction, and production. If operators keep prioritizing efficiency and production optimization, this sort of AI tooling could help soften revenue cyclicality and partially counter risks from shorter cycle spending pullbacks and integration challenges elsewhere in the portfolio.

Yet investors should still weigh how quickly digital and AI can offset any renewed pressure on upstream spending and cash flows...

Read the full narrative on SLB (it's free!)

SLB's narrative projects $38.7 billion revenue and $4.9 billion earnings by 2028. This requires 2.9% yearly revenue growth and roughly an $0.8 billion earnings increase from $4.1 billion today.

Uncover how SLB's forecasts yield a $45.31 fair value, a 12% upside to its current price.

Exploring Other Perspectives

Fourteen members of the Simply Wall St Community currently see SLB’s fair value anywhere between US$36 and about US$90 per share, underscoring very different expectations. Against that backdrop, the key risk many may be watching is whether a downturn in global upstream spending could curb SLB’s ability to turn its expanding digital and AI pipeline into more stable earnings, so it is worth examining several of these viewpoints side by side.

Explore 14 other fair value estimates on SLB - why the stock might be worth 11% less than the current price!

Build Your Own SLB Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your SLB research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free SLB research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate SLB's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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