SLB Surges 4.15% on AI Launch and Expansion Hype: Is This the Start of a Bullish Run?

Summary
• SLB shares jump 4.15% to $39.89, hitting an intraday high of $39.895
• Company unveils Tela, an AI assistant to boost profitability, and announces a $30M Louisiana expansion
• Analysts highlight undervaluation at $39.89 vs. $45.31 fair value, despite 19.57% EPS drop expected

SLB’s 4.15% intraday surge has ignited investor fervor, driven by its AI-driven digital transformation and a $30 million expansion in Louisiana. The stock’s sharp rebound from a 15.9% slump has positioned it as a focal point in the energy sector, with technical indicators and options activity suggesting heightened short-term momentum. Traders are now weighing the sustainability of this rally against looming earnings risks and sector dynamics.

AI Launch and Expansion Fuel Short-Term Optimism
SLB’s 4.15% surge is directly tied to its launch of Tela, an AI assistant designed to enhance operational profitability, and a $30 million expansion in Louisiana’s Shreveport facility. The AI initiative aligns with broader industry trends toward digitalization, while the expansion—creating 600 jobs—signals long-term commitment to U.S. manufacturing. Additionally, recent insider buying by Stamos Capital Partners (121.4% stake increase) and a $1.14 annualized dividend (3.0% yield) have bolstered investor confidence. However, the stock’s 19.57% EPS decline in Q4 and flat year-to-date performance underscore near-term risks.

Energy Equipment Sector Gains Momentum as Halliburton Rises 2.64%
The Oil and Gas Equipment and Services sector has seen renewed interest, with Halliburton (HAL) rising 2.64% on strong demand for deepwater projects. SLB’s rally mirrors sector-wide optimism around AI integration and cost-cutting measures. However, SLB’s focus on digital infrastructure and geothermal partnerships differentiates it from peers like Halliburton, which remains anchored to traditional oilfield services. The sector’s 10-day average volume of 10.3 million shares suggests sustained institutional interest.

Options and Technicals: Capitalizing on SLB’s Bullish Momentum
• 200-day MA: $35.72 (below current price)
• RSI: 67.88 (overbought but not extreme)
• MACD: 0.656 (bullish), Signal: 0.449, Histogram: 0.207
• Bollinger Bands: Upper $38.69 (below current price), Middle $36.66, Lower $34.62
• 200D Support: $35.79–$36.00

SLB’s technicals suggest a continuation of its short-term bullish trend, with key resistance at $39.89 (intraday high) and support at $36.66 (middle Bollinger Band). The RSI’s 67.88 reading indicates overbought conditions but remains within a manageable range. For aggressive traders, the SLB20251219C39.5 and SLB20251219C40 options offer high leverage and liquidity.

SLB20251219C39.5 (Call, $39.5 strike, 12/19 expiry):
• IV: 32.20% (moderate)
• Leverage Ratio: 160.98% (high)
• Delta: 0.5887 (moderate sensitivity)
• Theta: -0.070357 (high time decay)
• Gamma: 0.182717 (high sensitivity to price changes)
• Turnover: 3,658 (high liquidity)
• Payoff at 5% upside ($41.88): $2.38/share
This contract balances high leverage with moderate delta, ideal for a 5% price move. The high gamma ensures responsiveness to further gains, while the moderate IV suggests reasonable cost.

SLB20251219C40 (Call, $40 strike, 12/19 expiry):
• IV: 32.22% (moderate)
• Leverage Ratio: 192.59% (very high)
• Delta: 0.4954 (moderate sensitivity)
• Theta: -0.067215 (high time decay)
• Gamma: 0.187317 (high sensitivity)
• Turnover: 143,498 (extremely liquid)
• Payoff at 5% upside ($41.88): $1.88/share
This option offers the highest leverage and liquidity, making it suitable for aggressive bulls. The moderate delta and high gamma position it to capitalize on continued momentum.

Action Alert: Aggressive bulls should consider SLB20251219C40 into a break above $39.89. Conservative traders may use SLB20251219C39.5 as a hedge against a pullback to $36.66.

Backtest SLB Stock Performance
The backtest of SLB's performance after a 4% intraday surge from 2022 to the present shows mixed results. While the 3-day win rate is 50.40%, the 10-day win rate is slightly lower at 48.20%, and the 30-day win rate is 50.00%. The maximum return during the backtest period was 0.51%, which occurred on day 54 after the event, indicating that while there is potential for gains, the overall performance is modest and the strategy may not consistently yield high returns.

SLB’s AI and Expansion Drive Rally—Watch $39.89 and Earnings Risks
SLB’s 4.15% surge is a testament to the market’s appetite for AI-driven energy solutions and strategic expansion. While technicals and options activity favor a continuation of the rally, investors must monitor the $39.89 intraday high and the $36.66 support level. The sector’s strength, led by Halliburton’s 2.64% gain, provides a tailwind, but SLB’s earnings report (projected 19.57% EPS drop) could introduce volatility. Aggressive traders should prioritize SLB20251219C40 for high-leverage exposure, while hedging against a potential pullback to $36.66. Watch for a break above $39.89 or a breakdown below $36.66 to confirm the next move.