• Earlier this week, Chevron announced a 20-year agreement with Microsoft to develop Project Kilby, a roughly 2.7-gigawatt natural gas-fired power facility in West Texas dedicated to supplying electricity to a Microsoft-operated data center campus starting around 2028.
• The deal positions Chevron as an essential energy provider for AI and cloud infrastructure, adding a long-duration, data-center-linked revenue stream that sits alongside its traditional oil and gas operations.
• Next, we’ll examine how this long-term, AI-driven power agreement with Microsoft could influence Chevron’s existing investment narrative and risk profile.

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Chevron Investment Narrative Recap

To own Chevron, you need to believe its core oil and gas business can keep funding reliable dividends while selective expansions into power, LNG and chemicals support long-term cash generation. The 20‑year Microsoft power deal adds a contracted, data center linked revenue stream, but it does not remove the core near term catalyst of oil price driven cash flow, nor the key risk around high capex in large, long dated upstream projects.

Among recent announcements, Chevron’s Q1 2026 results showed net income of US$2,210 million on revenue of US$48,607 million, alongside continued buybacks and a 4 percent dividend increase. That context matters when thinking about Project Kilby, because the company is layering this long duration power agreement on top of an already capital intensive portfolio that includes the Permian, Gulf of Mexico and Hess assets, rather than replacing existing investment commitments.

Yet investors should be aware that heavy spending on large, long lived projects still leaves Chevron exposed to...

Chevron's narrative projects $202.0 billion revenue and $24.4 billion earnings by 2029.

Uncover how Chevron's forecasts yield a $216.04 fair value, a 25% upside to its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community span roughly US$167 to US$489 per share, showing how far apart individual views can be. Set those against Chevron’s continued reliance on capital heavy upstream projects and the new Microsoft power deal, and you can see why it pays to compare several different narratives about future cash flows and risk.

Explore 5 other fair value estimates on Chevron - why the stock might be worth over 2x more than the current price!

Reach Your Own Conclusion

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your Chevron research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Chevron research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Chevron's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.