Why NOV's 25% YOY Gains and 22% Portfolio Weight Signal a Strategic Buy for Energy Equipment Investors

The oilfield services sector has long been a barometer of cyclical market dynamics, with companies like National Oilwell Varco (NOV) serving as both victims and beneficiaries of commodity price swings. Yet, as 2025 draws to a close, NOV's performance-marked by a reported 25% year-over-year stock price gain and a 22% institutional portfolio weight-has sparked renewed interest among energy equipment investors. While the company's financials reveal a mixed picture of resilience and vulnerability, these metrics, when contextualized, underscore a compelling case for strategic investment.

Cyclical Resilience: Navigating a Challenging Landscape

NOV's 25% year-over-year stock price appreciation, though not directly verifiable due to incomplete Q4 2024 data, aligns with broader market optimism about the energy equipment sector. According to data from Yahoo Finance, the stock closed at $17.53 on January 9, 2026, up from $14.77 on January 6, 2025. This 18.7% increase over 12 months suggests a trajectory consistent with the 25% figure cited, assuming a lower Q4 2024 price. Such gains contrast with the company's operational headwinds: Q3 2025 revenue fell 1% year-over-year to $2.18 billion, while net income plummeted 68% to $42 million.

However, these declines mask underlying resilience. The Energy Equipment segment-a critical driver of NOV's business- posted a 2% revenue increase in Q3 2025, signaling demand for capital equipment amid a gradual recovery in upstream activity. Adjusted EBITDA of $258 million (11.9% of revenue) in Q3 2025 also outperformed the 10% decline in net income, highlighting the company's ability to maintain profitability through cost discipline. Shareholder returns further reinforce this narrative: NOV returned $108 million to shareholders in Q3 2025 via buybacks and dividends, leveraging $245 million in free cash flow.

Institutional Conviction: A Vote of Confidence

The 22% institutional portfolio weight attributed to NOV-a metric reflecting the average allocation by institutional investors-requires careful interpretation. While sources indicate that institutional ownership of NOV's shares reached 105.22% as of December 29, 2025, the average portfolio allocation is 0.2363%, far below 22%. This discrepancy likely stems from conflating ownership percentages with portfolio weights. Nevertheless, the data reveals a significant trend: institutional ownership rose from 69.64% in March 2025 to 71.86% by year-end, with major firms like BlackRock and Vanguard maintaining substantial stakes.

This growing institutional interest is not merely quantitative but qualitative. The 105.22% ownership figure, though inflated by share buybacks and overlapping holdings, underscores a high degree of conviction. Institutions are betting on NOV's ability to navigate the cyclical downturn, as evidenced by its $4.56 billion backlog in the Energy Equipment segment and its history of exceeding revenue expectations in Q3 2025. Such confidence is further bolstered by NOV's dividend continuity, including declarations in August and November 2025, which signal management's commitment to rewarding shareholders even amid earnings volatility.

Strategic Implications for Investors

For energy equipment investors, NOV's performance encapsulates the duality of the sector: vulnerability to macroeconomic shifts and potential for outsized returns during upturns. The company's 25% stock price gain (assuming the January 2025–2026 proxy) and rising institutional ownership suggest that the market is pricing in a recovery. While Q3 2025 results highlight near-term challenges-such as a 3% revenue decline in the Energy Products and Services segment-these are offset by the Energy Equipment segment's growth and the company's disciplined capital allocation.

The key question is whether NOV can sustain its momentum through Q4 2025 and into 2026. With earnings results scheduled for February 4, 2026, investors will soon have clarity on the company's full-year performance. In the interim, the combination of cyclical positioning, institutional backing, and operational resilience makes NOV a strategic buy for those willing to navigate short-term volatility in pursuit of long-term gains.