Summary
SLB up 29.5% and Baker Hughes up 23.6% YTD in 2026, continuing to beat Big Tech by ~30%. However, SLB issued a negative Q1 preannouncement due to Red Sea logistics disruptions. Baker Hughes completed its ~$13.6B acquisition of Chart Industries, strengthening hydrogen and turbomachinery capabilities. SLB Q1 earnings April 24.
YTD Performance
- SLB: +29.5% in 2026
- Baker Hughes: +23.6% in 2026
- Both significantly outperforming Big Tech
- Energy Select Sector SPDR (XLE) outperforming Technology Select Sector SPDR (XLK) by ~30%
Sources:
SLB Q1 Headwinds
SLB issued a negative Q1 2026 preannouncement:
- Analysts expect adjusted EPS of $0.60, down 16.7% from $0.72 year-ago
- Geopolitical instability and logistical bottlenecks in the Red Sea delaying equipment deliveries
- Despite headwinds, analysts maintain “Strong Buy” consensus
- Average price target $56.43 (12.8% upside from current levels)
Sources:
- SLB’s Q1 2026 Earnings: What to Expect - Yahoo Finance
Baker Hughes Chart Industries Acquisition
Baker Hughes completed its ~$13.6B acquisition of Chart Industries in January 2026, significantly expanding:
- Hydrogen turbomachinery capabilities
- Gas turbine value chain
- LNG equipment and services
This positions Baker Hughes as a vertically integrated player across both traditional energy services and the hydrogen transition.
Performance Drivers
- International project awards and longer-cycle offshore work
- Higher-margin digital completions
- LNG, turbines, and subsea equipment backlogs robust
- Pricing power improving across the services sector
- Multi-year spending upswing driven by exploration renaissance + AI demand
Sources:
- The Global Energy Architect: A Deep-Dive Analysis of SLB - Financial Content
Our Thinking
The energy services outperformance continues, but SLB’s Q1 warning introduces a nuance: the Hormuz/Red Sea disruption hurts services companies in the short term by delaying deliveries, even as high oil prices boost their medium-term outlook. This creates a dip-buying opportunity that the market seems to recognize (hence the maintained “Strong Buy” rating).
Baker Hughes’s Chart Industries acquisition is a strategic play on the hydrogen-gas convergence. They now own critical hydrogen turbomachinery alongside their traditional gas turbine services. If hydrogen blending stays below 30% commercially through 2030, they still win on gas turbines. If hydrogen scales faster than expected, they win on H2 equipment. It’s a hedge.
The case for 20%+ revenue growth by 2027 remains plausible. The Red Sea disruption is a timing issue, not a demand issue.
Watch
- SLB Q1 earnings April 24 (key test of the multi-year growth case)
- Baker Hughes post-acquisition integration updates
- Red Sea logistics normalization timeline
- Whether Hormuz ceasefire eases delivery bottlenecks