Will Saudi Aramco and Other Oil Majors Continue to Shine After Stellar Q2 Results?

Will Saudi Aramco and Other Oil Majors Continue to Shine After Stellar Q2 Results?

Oil giant Saudi Aramco (The Saudi Arabian Oil Company) recently reported impressive second-quarter results, thanks to soaring energy prices. Aramco’s Q2 net income surged 90% to $48.4 billion, fueled by higher crude oil prices, increased volumes, and solid refining margins. Free cash flow grew 53% to $34.6 billion and helped Aramco declare a dividend of $18.8 billion for the second quarter. Like Aramco, oil majors like ConocoPhillips (COP), Exxon Mobil (XOM), and Chevron (CVX) also posted strong Q2 results. Despite concerns about the decline in energy prices over recent days amid fears of an economic slowdown, Wall Street analysts remain bullish on the prospects of oil companies.  

Rich with cash from higher energy prices, Saudi Arabia is ramping up its investments in U.S. stocks. As per an SEC filing, The Public Investment Fund, Saudi Arabia’s sovereign wealth fund, invested more than $7 billion in shares of several U.S. companies in the second quarter. The list includes Amazon (AMZN), Microsoft (MSFT), Advanced Micro Devices (AMD), Alphabet (GOOGL), Starbucks (SBUX), Walmart (WMT), Home Depot (HD), JPMorgan Chase & Co. (JPM), and NextEra Energy (NEE).

The Public Investment Fund, which as per Reuters has assets under management of nearly $620 billion, is diversifying its investments to lower its dependence on oil.