Artificial intelligence is quietly turning data centers into some of the world’s biggest power users. Over the past year, these facilities used roughly 448 trillion watt‑hours of electricity, putting their energy needs in the same league as major economies.
That level of demand is not a one‑off event. Data centers are expected to need about 935 trillion watt‑hours by 2030, close to 3% of global electricity use. Put differently, if data centers were counted as a single country, their power demand would rank around sixth worldwide.
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Chevron’s (CVX) energy role fits directly into this picture. The company has secured a 20‑year contract to supply power for Microsoft’s (MSFT) estimated $7 billion data center project. This agreement ties CVX’s future cash flows to long‑lasting digital infrastructure rather than short‑cycle demand.
The real question for investors is whether a deal of this size and length can change the way Chevron’s growth, stability, and valuation are seen over the coming years.
Chevron’s Power Deal Numbers
Chevron explores for crude oil and natural gas, refines fuels, produces chemicals, and markets lubricants across multiple regions. Based in Houston, Texas, its operations cover upstream production, downstream refining, chemicals, and a growing focus on power‑linked energy solutions.
On June 22, the stock delivered a year‑to‑date (YTD) gain of 15.6% alongside a 52‑week performance increase of 19.97%.
www.barchart.comAt roughly $345.8 billion in market value, the shares trade at 26.73 times trailing earnings and 11.07 times cash flow, compared with sector medians of 14.90 times and 6.68 times. Those numbers show investors are currently willing to pay a premium for Chevron’s earnings and cash‑flow profile.
CVX offers a forward annual dividend of $7.12 per share, which works out to a yield of 4.10%. That payout adds a steady income stream on top of the share price moves.
The latest reported quarter, released in March 2026, showed earnings of $1.41 per share, coming in 53.26% above Wall Street expectations. This result points to stronger profitability than analysts had modeled.
The same March 2026 report showed sales of $48.607 billion, up 3.70% from the prior year period, indicating that revenue is still growing even without aggressive expansion. Net income for March 2026 was $2.21 billion, down 20.22% year-over-year (YOY), which signals that margins faced some pressure despite the higher sales.
The balance sheet stayed large during that March 2026 period. Its total assets stood at $329.551 billion, up 1.71%. CVX also reported total liabilities of $140.180 billion, an increase of 6.33% from a year earlier, pointing to some additional leverage and funding being used to support operations and projects.
Chevron’s Long-Term Power Moves
Chevron just signed a 20-year agreement to supply natural-gas-fired power to Microsoft for a planned West Texas data center, giving CVX a direct role in this fast-growing buildout. The project, called Project Kilby, is planned for Reeves County, Texas, with power generation set right at the data center site. First electricity is targeted for 2028.
At full buildout, the facility is expected to reach about 2.67 gigawatts of capacity. That is enough power to match the usage of roughly two million homes. Most of the output will come from gas turbines supplied by GE Vernova (GEV). Caterpillar (CAT) will also provide turbines, supporting steady and reliable power generation.
Chevron expects to make a final investment decision by the end of this year. That step will help set capital commitments and the project timeline. Microsoft is also planning about $190 billion in capital expenditures this year, up 61% from 2025. That spending shows the size of its data center expansion plans and gives Chevron a way to tie future cash flows to long-life infrastructure demand.
Away from Texas, Chevron also confirmed an oil discovery at the Bandit prospect in the Gulf of Mexico. The well sits in Green Canyon Block 680, about 125 miles south of the Louisiana coast, with Occidental as operator.
That discovery could be tied back to a nearby Occidental-operated facility and surrounding infrastructure, giving Chevron another path to future production and cash flow. Taken together, the Microsoft power contract and the Bandit discovery show Chevron adding long-duration, asset-backed cash flow sources.
Analysts Lens on Chevron
The next set of numbers is due on August 7, and expectations are clearly elevated. For the quarter ending June 2026, the average earnings estimate stands at $6.23 per share. That compares with $1.77 in the same quarter a year earlier and implies a projected YOY growth rate of 251.98%.
One way to see the confidence of the market is examination of the outlook of single‑stock calls. Morgan Stanley’s Devin McDermott, writing in early 2026, kept an “Overweight” rating on Chevron but trimmed the price target to $174 from $180. That move looked cautious at the time but the stock now trades above that level, which shows sentiment has strengthened since.
The broader view from Wall Street lines up with this picture. A group of 26 analysts has landed on a “Moderate Buy” consensus rating for CVX. The average price target is $215.60 points to a 22.27% upside from current levels.
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www.barchart.comConclusion
Chevron’s 20‑year commitment to power Microsoft’s $7B West Texas data center makes it clear where CVX wants a big chunk of its future cash flows to come from. The stock now sits between its traditional oil and gas business and a growing role in round‑the‑clock data center power. With that mix in place, the outlook leans more toward a steady move higher over time than a pullback, especially if the Microsoft project hits its milestones and demand for data center electricity continues to rise.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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