What Happened?
A number of stocks jumped in the afternoon session after crude oil pushed back above $100 a barrel, with Brent near $111 and WTI close to $108.
The move followed fresh comments from President Trump that "the Clock is Ticking" for Iran, a drone attack on the UAE's Barakah nuclear plant over the weekend, and the continued closure of the Strait of Hormuz, a chokepoint that normally carries about 20% of the world's oil. The Energy Select Sector SPDR Fund (XLE) gained roughly 2.4%, with Exxon, Chevron and ConocoPhillips leading.
Supply data added to the squeeze: U.S. crude inventories fell 4.3 million barrels in early May, dropping below the five-year average, while natural gas futures jumped. The risk for investors remained symmetrical as any de-escalation could reverse the move just as quickly.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Oilfield Services company Helix Energy Solutions (NYSE: HLX) jumped 3.5%. Is now the time to buy Helix Energy Solutions? Access our full analysis report here, it’s free.
- Oilfield Services company Atlas Energy Solutions (NYSE: AESI) jumped 3.6%. Is now the time to buy Atlas Energy Solutions? Access our full analysis report here, it’s free.
Zooming In On Atlas Energy Solutions (AESI)
Atlas Energy Solutions’s shares are extremely volatile and have had 33 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock gained 5.7% on the news that the company reported mixed first-quarter results that beat Wall Street's revenue and profitability estimates but missed on earnings per share.
For the quarter, Atlas generated revenue of $265.6 million, exceeding analyst expectations of $256.7 million, even as sales declined 10.8% year over year. The company's Adjusted EBITDA—a key measure of cash flow—came in at $28.4 million, also beating estimates.
However, the company reported a GAAP loss of $0.38 per share, which was wider than the loss analysts had anticipated. Investors appeared to focus on the better-than-expected revenue and EBITDA, along with a positive free cash flow of $3.78 million, a significant improvement from a loss of $59.84 million in the same quarter last year.
Atlas Energy Solutions is up 102% since the beginning of the year, and at $19.63 per share, has set a new 52-week high. Investors who bought $1,000 worth of Atlas Energy Solutions’s shares at the IPO in March 2023 would now be looking at an investment worth $1,158.
ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.
Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.
