Chips vs Oil Seesaw
Daniel Eilender@danieleilender
−4.2%
since Oct 13
The idea
I believe money keeps rotating between chip stocks and energy stocks, so rather than bet on one side I own both in roughly equal halves: chip designers, chipmakers, and equipment suppliers against oil producers plus a smaller slice of power companies selling to data centers. About 10% stays in cash. When one side runs far ahead of the other, the plan is to trim the winner and add to the side that lagged, letting the swing itself do the work instead of guessing which trend lasts.
What it owns
- Large integrated oil companies track crude prices and provide a steady counterweight when investors rotate away from semiconductor stocks. · Exxon Mobil CorporationIt produces oil and gas and follows crude prices, serving as a counterweight to semiconductor momentum., Chevron CorporationIt operates as a stable, dividend-paying oil producer that tracks energy prices independently of technology spending., ConocoPhillipsIt extracts oil and gas without refining operations, so its stock reacts directly to crude price movements.18%
- Companies designing chips for artificial intelligence and data centers capture the money flows that swing hard between tech and energy rotations. · NVIDIA CorporationIt designs artificial intelligence chips and represents the primary channel through which capital flows into the semiconductor side., Advanced Micro Devices, Inc.It designs artificial intelligence chips and competes directly with other major semiconductor designers for data center spending., Broadcom Inc.It designs custom chips and networking components for data centers, riding artificial intelligence spending alongside other chip designers.17%
- Toolmakers supplying factories rise and fall with capital spending on semiconductor manufacturing capacity. · ASML Holding N.V.It is the sole supplier of machines that print advanced chips, so its orders follow factory spending decisions., Lam Research CorporationIt makes etching equipment for chip factories, particularly memory facilities, so its performance follows semiconductor capital spending., Applied Materials, Inc.It supplies manufacturing tools to chip factories, so its revenue follows capital spending on semiconductor production capacity., KLA CorporationIt makes inspection equipment that chip factories use to monitor quality, so it gains when semiconductor manufacturers expand capacity.16%
- Smaller drillers and oilfield service companies swing more sharply with crude prices, amplifying the energy side of the rotation. · EOG Resources, Inc.It operates low-cost oil wells that stay profitable across price cycles, tracking crude movements rather than technology spending., Diamondback Energy, Inc.It drills primarily in the Permian Basin, making it a direct bet on American oil production and prices., SLB N.V.It provides drilling services and equipment to oil producers, gaining when energy companies spend more after oil prices rise., Occidental Petroleum CorporationIt produces oil with higher financial leverage than major competitors, so its stock amplifies swings in crude prices.15%
- Manufacturing capacity and memory pricing drive the chip side of the seesaw, moving sharply with demand for advanced semiconductors. · Taiwan Semiconductor Manufacturing CompanyIt manufactures the most advanced chips for major designers, so its performance tracks the overall chip cycle regardless of which designer leads., Micron Technology, Inc.It makes memory chips whose prices swing sharply with semiconductor demand, making it the most sensitive component of the chip side.12%
- Electricity producers benefit from growing power demand as data centers expand, independent of chip stock momentum. · GE Vernova Inc.It manufactures gas turbines and electrical equipment for power plants serving data centers, advancing on power infrastructure buildouts., Constellation Energy CorporationIt operates nuclear plants and provides consistent baseload power to data centers, moving on its own electricity supply story rather than chip stocks., Vistra Corp.It generates and sells electricity including growing volumes to data centers, advancing independently of semiconductor momentum.12%
- Cash10%