Exxon, Microsoft Join Forces to Increase Oil Output With Cloud Tech

By Anthony Summers
Senior Research Analyst

Digital Trends

Fun fact: The U.S. ended 2018 as the world’s top crude oil producer, shipping 11.99 million barrels per day (bpd) to surpass Russia and Saudi Arabia.

But this production growth hasn’t come without environmental costs. There were two major oil spills in the U.S. last year. And who can forget the 2017 Keystone XL pipeline fiasco in South Dakota?

Now one of the world’s largest tech companies is helping the world’s largest publicly traded oil and gas company “clean up” its act, spelling good news for shareholders.

Microsoft (Nasdaq: MSFT) and Exxon Mobil (NYSE: XOM) announced a groundbreaking pact late last month. Microsoft will use its Azure cloud computing product to collect data from Exxon’s wells in the Permian Basin, the nation’s largest shale field.

Exxon says the deal equates to the largest deployment of cloud technology in the oil space to date.

Microsoft’s cloud data, mobile apps and artificial intelligence (AI) algorithms will help Exxon detect leaks earlier, reduce repair times, make faster drilling decisions and monitor greenhouse gas emissions. They will also help Exxon meet its 2025 Permian production goal of 600,000 barrels of oil equivalent per day (a massive increase from its production of 190,000 bpd in the fourth quarter of 2018).

The partnership couldn’t have come at a better time for our readers. Just a few months ago, Emerging Trends Strategist Matthew Carr recommended dumping Facebook and Google… in favor of Microsoft.

Microsoft now controls 17% of the cloud market and is set to leap higher. Its flagship cloud product, Azure, saw a 76% sales increase last year.

Microsoft’s cloud revenue is even beating Amazon’s!

Matthew has praised Microsoft for its stealthy rise in the cloud computing sector.

Sure, the company is competing with other big tech giants like Apple and Amazon. But as Matthew has said, “Microsoft doesn’t need to steal market share from Amazon. It needs only to take it from smaller players.”

In fact, as far as technical analysis can show, Microsoft is a steal. Matthew describes it as “a megacap experiencing double-digit growth that’s undervalued compared with its peers.”

For example, Microsoft trades at 26 times earnings while one of its biggest competitors trades at a whopping 84 times earnings.

This makes Microsoft a cheaper play in the cloud services industry and proves you can still find high-quality stocks at a fair price in this market.

With 2019 U.S. oil demand expected to increase by 330,000 bpd to 20.81 million bpd, Microsoft and Exxon are positioned for a profitable year.

Not to mention, the deal with Exxon gives Microsoft a platform to expand its cloud and AI technologies, while proving it’s innovating now more than ever.

This is clearly a core tech stock for investors looking to shoot for the clouds.

Good investing,

Anthony