The past year has not been kind to the shares of ConocoPhillips (COP -1.08%). The share price has fallen around 22% or so, which is twice the drop of the broader energy sector, using Energy Select SPDR ETF (XLE -1.21%) as an industry proxy. That divergence might lead some investors to wonder what’s wrong with ConocoPhillips right now. The answer is that the stock and business aren’t the same thing.

What does ConocoPhillips do?

ConocoPhillips is what is known as an independent energy producer. Essentially, all it does is drill for oil and natural gas. This means it operates in the upstream of the broader energy sector. Energy prices are highly volatile and often move very quickly because of geopolitical news and supply/demand changes. That can lead to swift swings in the sales and earnings of companies like ConocoPhillips.

That’s the big story today, with energy prices hitting a bit of a weak patch after soaring coming out of the height of the coronavirus pandemic. Simply put, ConocoPhillips’ income statement results are a bit weak right now. The company’s adjusted earnings per share tallied up to $1.42 in the second quarter of 2025 versus $1.98 in the same quarter of 2024. In some ways, it makes sense that investors are downbeat on the stock.

However, it is important to note that this type of earnings volatility is perfectly normal for ConocoPhillips’ business. It is just how the energy industry works. To highlight that, the company’s realized price per barrel of oil equivalent (BOE) in the second quarter of 2025 was 19% lower than it was in the second quarter of 2024. That was almost entirely out of the company’s control (hedging can sometimes soften the impact of commodity price swings).

Data by YCharts.

ConocoPhillips is executing well as a business

To be fair, ConocoPhillips is not a stock that a conservative investor will probably want to buy. A better option in the energy patch would be a pipeline operator like Enterprise Products Partners, which is a toll-taker paid to move oil and natural gas. With revenue and earnings tied to energy prices, only more aggressive types will want to buy ConocoPhillips.

And ConocoPhillips happens to be a fairly well-run business. The best example of that is the company’s dividend history. While the dividend has gone up and down over time, the company has paid a dividend consistently for decades. That speaks to a business that is being operated at a high level despite the fact that its top and bottom lines can be volatile at times.

More specific to today, ConocoPhillips is seeing some notable operating success that is being overshadowed by energy price moves. For example, ConocoPhillips completed its acquisition of Marathon Oil in late 2024, expanding its business. The integration effort has been outdistancing the company’s own expectations. There was a 25% uplift in the new resources added versus projections. A 100% increase in cost synergies over expectations. And the company has been able to ink 25% more asset sales than projected, and more quickly than forecast, as ConocoPhillips looks to use the deal to refocus around its best assets.

Basically, ConocoPhillips is doing a pretty good job right now. In fact, despite the revenue and earnings hit caused by lower energy prices, the company actually increased production 3% year over year in the second quarter of 2025.

ConocoPhillips could be a good way to get direct energy exposure

All in, ConocoPhillips as a business is doing just fine. When oil prices recover, as they always have before, it will likely be in a better position to benefit than it was a year ago. The stock, however, is a different story, since investors are focusing on revenue and earnings, which are inherently volatile and relatively weak at the moment. That’s what’s wrong with the stock, even though there’s really nothing wrong with the business. If you are looking for energy exposure, however, ConocoPhillips’ business could make it an interesting stock to dig into.

QSM Asset Management disclosed a new position in Rio Tinto Group on Thursday, purchasing 174,700 shares for an estimated $11.5 million during the third quarter.

What Happened

According to a filing with the Securities and Exchange Commission released on Thursday, QSM Asset Management initiated a new position in Rio Tinto Group (RIO -0.30%), acquiring 174,700 shares. The estimated value of the transaction, calculated using the average price during the quarter ended September 30, was $11.5 million. This stake represents 8.2% of the fund’s reportable assets at the end of the quarter.

What Else to Know

Top holdings after the filing:

• NYSE:ZBH: $12.9 million (9.2% of AUM)
• NASDAQ:INTC: $12.2 million (8.7% of AUM)
• NASDAQ:VTRS: $11.6 million (8.3% of AUM)
• NYSE:RIO: $11.5 million (8.2% of AUM)
• NYSE:PFE: $11.3 million (8.1% of AUM)

As of Thursday morning, RIO shares were priced at $68.90, up 4.5% over the year ending and lagging the S&P 500 by about 9 percentage points over the same period.

Company Overview

Company Snapshot

• Rio Tinto produces and sells iron ore, aluminum, copper, minerals, and related products.
• The company operates a vertically integrated mining and processing model, generating revenue from commodity extraction, processing, and global distribution.
• It serves industrial manufacturers, construction firms, technology companies, and energy producers worldwide.

Rio Tinto Group is a leading global mining company with a diversified portfolio across iron ore, aluminum, copper, and minerals.

Foolish Take

QSM Asset Management’s new $11.5 million stake in Rio Tinto Group is part of the fund’s growing exposure to commodity-linked value plays. The position—representing 8.2% of the firm’s portfolio—adds to a broader bet on natural resources this past quarter, alongside bolstered holdings in Diamondback Energy (FANG) and Occidental Petroleum (OXY). Together, these moves suggest that QSM believes energy and materials producers remain undervalued relative to fundamentals.

Meanwhile, Rio’s stock has surged more than 30% since late June. The firm’s Pilbara operations posted their second-highest third-quarter shipments since 2019, climbing 6% from the second quarter. The company also reaffirmed full-year production guidance, and in a statement, CEO Simon Trott touted back-to-back quarterly production records in Rio’s bauxite business and at the Oyu Tolgoi mining site in Mongolia.

For long-term investors, Rio’s combination of strong free cash flow, modest valuation, and a dividend yield of about 5.5% offers both income and inflation protection. QSM’s inclusion of Rio Tinto within a portfolio of high-quality cyclicals seemingly underscores its conviction in commodity producers amid broader economic uncertainty.

Glossary

Asset Management: Professional management of investments on behalf of clients or institutions.
Position: The amount of a particular security or asset held by an investor or fund.
Stake: The proportion of ownership or interest held in a company or asset.
Holding: A specific security or asset owned within an investment portfolio.
Reportable AUM: Assets under management that must be disclosed in regulatory filings, often above a certain threshold.
AUM (Assets Under Management): The total market value of investments managed by a fund or asset manager.
Quarterly Pricing: The average price of a security over a specific three-month financial reporting period.
Vertically Integrated: A business model where a company controls multiple stages of production and distribution within its industry.
Dividend Yield: Annual dividends paid by a company expressed as a percentage of its share price.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Pfizer. The Motley Fool recommends the following options: short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.

If there is one thing that investors need to understand about the energy sector, it is that oil and natural gas prices are inherently volatile. But there’s a somewhat counterintuitive takeaway here. Sometimes the best investment opportunities arise when business in the oil space isn’t going so well.

Which is why investors might want to buy ConocoPhillips (COP -2.80%) today. Indeed, the company’s successful business overhaul is so obvious that it is hard not to notice (at least partly because the company is so happy to point it out).

Not such a great quarter for sales and earnings

ConcoPhillips’ earnings in the second quarter of 2025 weren’t great when you compare it to the same quarter in 2024, with a drop from $1.98 per share last year down to just $1.56 this year. But that doesn’t even do justice to the energy company’s earnings decline, since pulling out a one-time gain in the second quarter of 2025 drops the total down to $1.42 per share. That’s the worst quarterly earnings outcome in over a year and down sequentially from even the first quarter.

But that’s kind of how things go in the energy sector, where oil and natural gas prices drive the top and bottom lines of the income statement. In fact, it isn’t even remotely unusual for ConocoPhillips’ earnings to be volatile from quarter to quarter. That said, the energy sector is, generally, not in the best place today relative to the highs achieved in the price rebound coming out of the coronavirus pandemic.

For example, ConocoPhillips’ share price has fallen around 25% from its late 2022 highs. For comparison, Brent Crude, a key international oil benchmark, and West Texas Intermediate Crude, a key U.S. oil benchmark, have both lost about a third of their value over the same span. This could actually be a good time for more aggressive investors to consider buying ConocoPhillips.

An obvious reason to like ConocoPhillips

Assuming you can stomach the uncertainty of a commodity-based business like ConocoPhillips, there are good things happening at the company. Notably, it has been integrating the acquisition of Marathon Oil and executing above expectations. For example, it added 25% more resources than projected when the deal was inked. Despite that, it also managed to reduce the number of rigs it was operating on the added properties by 30%. All in, it was able to double the business synergies it projected, saving $1 billion in costs annually. And management managed to set up $2.5 billion in dispositions in nine months, when it had previously been looking to shed $2 billion in assets over a two-year period.

The dispositions are a special consideration. ConocoPhillips isn’t looking to get big for the sake of getting big. It is attempting to optimize its portfolio of assets so it can focus on only its best properties. That, in turn, should help to improve profitability over the long term. To be fair, even the best properties won’t change the variability in energy prices. But wider profit margins means the company will make more money when times are good and have more downside leeway when times are bad. ConocoPhillips isn’t hiding its success, it is proudly telling investors all about what it has achieved. In other words, there are obvious improvements taking shape at the business.

This is the setup for better performance in the future

To state the obvious again, as an energy company, energy prices are going to dictate ConocoPhillips’ financial results. Conservative investors looking for consistent earnings or reliable dividends (the company pays a dividend regularly, but the amount of the dividend is highly variable) probably shouldn’t buy the stock.

But if you are looking for direct exposure to energy prices, ConocoPhillips could be a solid choice given management’s efforts to overhaul the business. When commodity prices take off again, the upgrades made to the portfolio will help supercharge ConocoPhillips’ financial results. And Wall Street will almost certainly reward the stock for that.

Chevron’s stock declined sharply this week before paring back losses, as mounting concerns about volatility in the global oil markets spooked traders.

Another group of worried market watchers? Tech companies, big and small.

Casual observers sometimes wonder why technology stocks—often seen as disconnected from the oil industry—sometimes react sharply to oil price movements and related news.

But the two sectors are much more connected than you might realize. That link largely stems from the broader economic signals these markets send and the intertwined nature of global supply chains.

When oil prices rise, fears of inflation and slower economic growth often intensify, leading investors to reassess their positions across sectors.

Tech stocks, which are sensitive to macroeconomic trends and interest rates, can react as part of a risk-off adjustment. Conversely, falling oil prices may signal a more supportive environment for growth, prompting gains in technology shares.

Additionally, some technology firms are directly affected by energy prices through their supply chains: manufacturers rely on transportation and electricity, like companies making data centers or rockets. That makes their costs responsive to oil fluctuations.

Investor sentiment also plays a role, because a sharp move in oil markets can serve as a proxy for economic stability, influencing valuations across all sectors, including high-growth tech companies.

This interconnectedness underscores how macroeconomic developments ripple across the markets, blurring traditional sector boundaries and emphasizing the importance of a holistic view when analyzing stock movements.

Why did Chevron wobble and will that shakiness spread?

Chevron’s drop mirrored other fluctuations in the market.

The energy giant’s shares dropped due to a combination of geopolitical tensions, varying supply levels, and uncertain demand forecasts that have left investors cautious about near-term earnings prospects.

Analysts cite ongoing geopolitical tensions in key oil-producing regions, along with an uncertain outlook for global economic growth, as contributing factors to the market turbulence. Investors worry that these factors could pressure crude prices, which would in turn impact Chevron’s revenue and dividend stability.

Or to put it in Wall Street bro speak:

“Chevron Corporation (NYSE:CVX) stock came under pressure from a combination of uncertainty in oil markets; an announcement of higher than expected supply growth from OPEC+ (the Organization of the Petroleum Exporting Countries, plus 10 other oil-producing countries),” Carillon Eagle Growth & Income Fund wrote to investors in its second quarter 2025 investor letter.

“And investor positioning around Chevron’s pending acquisition of a global independent energy company. The OPEC+ announcement weighed on all energy stocks,” it said.

Translation: Traders are worried about a new deal they made, a spike in supply from OPEC, and a general uneasiness about the energy sector in general.

Speaking of the energy sector …

Despite Chevron’s strong earnings earlier this year, the energy sector’s overall uncertainty continues to weigh on stock performance, with some analysts warning that volatility could persist until the geopolitical and economic landscape stabilizes.

But trading in the energy markets remains robust. In the trading week that ended August 29, 2025, the energy sector was the best-performing sector in the U.S. market, with the Morningstar US Energy Index rising 2.41%. The sector’s strong performance contrasted with a small decline in the broader market. 

That bullish performance also made Chevron’s weak performance a standout. And a standout is not what you want to be for several reasons, including the risk of short selling, dragging down your trading partners, and a broader selloff from investors.

Last week it was Chevron that was a bellwether. Let’s see this week which sector receives tech’s scrutiny.