Top Pick of the Week: One Layer Deeper
I went looking for an AI utility play. My research led me to an oil and natural gas producer instead.
One of my favorite parts about investing has nothing to do with buying stocks.
It’s asking questions.
The market has a funny way of rewarding curiosity.
You start researching one company, which leads you to another industry, which leads you to an entirely different investment idea you never expected to find.
Sometimes the best opportunities aren’t hiding in plain sight. They’re hiding just one question beyond where everyone else stops looking.
That’s exactly what happened to me this week.
I wasn’t looking for an oil and gas company.
I was looking for another way to invest in artificial intelligence.
More specifically, I wanted to find a utility company.
The logic seemed straightforward.
Artificial intelligence is driving an explosion in data centers.
Data centers consume enormous amounts of electricity. If electricity demand continues to grow over the next decade, utility companies should be among the biggest beneficiaries.
On paper, the thesis made perfect sense.
So I started researching and I found a lot of businesses I genuinely admired.
Companies with predictable cash flows. Strong balance sheets. Long operating histories. The kind of businesses I’d be happy to own for years.
There was just one problem.
Many of them already looked fairly valued.
The opportunity wasn’t as compelling as I had hoped.
That’s when I stopped asking one question.
→ “Who delivers the electricity?”
And started asking another.
→ “Where does the electricity come from?”
That single question completely changed where my research led me.
Instead of following the AI story directly, I followed the energy behind it.
Not to another utility, but to one of the largest independent oil and natural gas producers in the United States.
A company that Morningstar currently estimates is trading at roughly 20% below its fair value.
A company that gives investors exposure to both traditional energy demand and one of the fastest-growing themes in the market.
The growing energy needs of artificial intelligence.
That’s why this week’s Top Pick of the Week is Devon Energy Corp. DVN 0.00%↑ .
Here’s the setup →
What Is Devon Energy Corp?
Unlike many of the companies I’ve written about recently, Devon Energy Corp. DVN 0.00%↑ isn’t building artificial intelligence, it isn’t designing semiconductors, it isn’t manufacturing servers, and it isn’t constructing data centers.
Instead, DVN produces something every one of those businesses depends on before any of them can do what they’re designed to do.
→ Energy.
DVN is one of the largest independent oil and natural gas producers in the United States, with operations spanning some of the country’s most productive shale basins, including the Permian, Eagle Ford, Anadarko, and Bakken.
Following its merger with Coterra, the company will also expand its footprint into the Appalachian Basin, strengthening its exposure to natural gas.
At the end of 2025, the company reported approximately 2.4 billion barrels of oil equivalent in proved reserves and produced roughly 840,000 barrels of oil equivalent per day.
About 73% of that production came from oil and natural gas liquids, while the remaining 27% came from natural gas.
Those numbers matter because they tell us what kind of business DVN has become.
This isn’t a small exploration company hoping to strike its next big discovery.
It’s an established producer with diversified operations, high-quality assets, and a meaningful position across several of North America’s most important energy regions.
Oil continues to fuel transportation, manufacturing, and industrial activity around the world.
Natural gas plays a different, but increasingly important role.
It has become one of the primary fuels used to generate electricity in the United States, providing reliable, dispatchable power whenever homes, businesses, manufacturers, and data centers need it.
That diversification gives DVN exposure to multiple sources of long-term energy demand.
That’s what caught my attention because I was searching for the businesses making artificial intelligence possible.
The Hidden Layer
Artificial intelligence has become one of the defining investment themes of this decade.
Mention AI, and most investors immediately think of companies like NVIDIA NVDA 0.00%↑ , Microsoft MSFT 0.00%↑ , Alphabet GOOGL 0.00%↑ , Amazon AMZN 0.00%↑ , or Broadcom QCOM 0.00%↑ .
That makes sense.
They’re building the chips, software, cloud infrastructure, and platforms driving the next generation of technology.
However, every major investment theme creates an ecosystem.
The companies making headlines are rarely the only ones benefiting.
Sometimes the most interesting opportunities exist one layer deeper.
That realization completely changed the way I approached my research.
Instead of asking which companies were building artificial intelligence...I started asking what artificial intelligence needed before it could exist.
The answer wasn’t another semiconductor.
It was electricity.
Every AI model has to be trained.
Every prompt has to be processed.
Every cloud server has to stay online.
Every data center has to operate twenty-four hours a day.
None of that happens without power.
That part of the story is obvious.
The better question is this:
→ “Where does that electricity come from?”
For the United States, the answer isn’t one energy source.
It’s a combination of natural gas, nuclear, hydroelectric power, wind, solar, and other renewables working together to support an increasingly complex electrical grid.
Natural gas remains one of the largest and most reliable sources of electricity generation because it can provide consistent, dispatchable power whenever demand increases.
As artificial intelligence continues expanding, so will the infrastructure supporting it.
More infrastructure requires more electricity and more electricity requires dependable sources of energy.
That’s where DVN entered my thinking.
Not because it’s an AI company and not because I believe artificial intelligence alone will determine its future.
The connection is much simpler than that.
→ If artificial intelligence increases electricity demand...and natural gas remains an important part of producing that electricity...then companies helping supply that fuel may benefit from a long-term trend extending well beyond traditional oil and gas demand.
That’s not a prediction.
It’s a thesis.
One built on asking one more question after everyone else believes they’ve already found the answer.
Why Devon Energy Caught My Attention
One of the biggest mistakes investors can make is falling in love with a theme.
The theme may be right.
The investment may not be.
I think that’s an important distinction.
Artificial intelligence is one of the most compelling long-term investment stories of our generation.
I don’t think that’s a controversial statement anymore. The amount of capital flowing into AI infrastructure, cloud computing, semiconductors, and enterprise software speaks for itself.
However, believing in a trend isn’t enough and the price you pay still matters.
That’s what surprised me during my research.
I expected to find compelling opportunities among utility companies.
The logic was sound, and many of the businesses I reviewed were exactly the kind of companies I’d be comfortable owning for years.
Strong balance sheets, predictable cash flows, and reliable businesses.
There just wasn’t enough of a discount to get me excited.
That’s an important lesson.
A great business doesn’t automatically make a great investment.
Valuation matters and sometimes the market recognizes a great business long before we do.
When that happens, future returns often depend less on the quality of the company and more on the price you paid to own it.
That’s why I changed my question.
Instead of asking:
“Who benefits from AI?”
I started asking:
“Where else might the market be looking?”
That shift led me away from the companies everyone was already talking about and toward an industry that wasn’t receiving nearly as much attention.
Energy.
That’s where DVN stood out.
Morningstar currently estimates the company is trading at roughly 20% below its fair value.
For me, that immediately made the story more interesting.
Here was an established company with diversified operations, meaningful exposure to both oil and natural gas, and what appeared to be an attractive valuation.
More importantly, it wasn’t dependent on a single outcome.
If AI continues increasing electricity demand, DVN could benefit from stronger long-term demand for natural gas.
If traditional energy demand remains resilient, the business continues serving the markets it already knows well.
I like investments with multiple paths to success. DVN appeared to offer exactly that.
Why Invest in DVN Right Now?
Finding a company you admire is only part of the equation.
Timing matters, valuation matters, and for me, technical analysis matters too.
The strongest investment opportunities often appear when multiple pieces of the puzzle begin fitting together at the same time.
That’s what I believe I’m seeing with Devon Energy Corp. DVN 0.00%↑ today.
Morningstar’s estimate of roughly a 20% discount to fair value first caught my attention because it suggested the market might be pricing the business more pessimistically than its long-term fundamentals justify.
Of course, valuation alone isn’t enough.
A stock can look cheap for months—or even years—if investors continue finding reasons to sell it.
That’s why I also pay attention to the chart.
When I’m evaluating a company, I ask myself a few simple questions.
Is the long-term trend improving?
Is momentum beginning to shift?
Is the stock showing signs of accumulation?
Is the broader sector becoming stronger?
Technical analysis doesn’t tell me what to buy.
It helps me decide when I want to buy it.
→ Fundamental analysis answers the question, “Is this a business I want to own?”
→ Technical analysis helps answer, “Is now the right time?”
I don’t need every signal to line up perfectly.
Markets rarely work that way, but when valuation, fundamentals, and technicals begin pointing in the same direction, my confidence usually increases.
That’s the combination that encouraged me to take a closer look at DVN.
Technical Analysis & Chart Markup
DVN is entering a breakout signaled by price closing above its 20-day SMA.
The TSI has curled & crossed and the MACD histogram flipped to the bullish side signaling the momentum is in favor here.
Current Price: $44.10
Sector: Energy XLE 0.00%↑
Sub-sector: Exploration & Production
Fair Value: $55 (20% discount here)
Entry Zone: $41-45
Stop Loss Zone: $39.50-40.00
In other words:
→ this is an amazing buy & hold opportunity to pick up shares of DVN, an undervalued / discounted dividend-paying stock to hold for the long-term, if not forever.
→ we can also position trade DVN back to true value and beyond and make massive gains.
→ if you’re an experienced, astute trader, you can write option contracts on DVN and do what you do and make exponential gains.
The Risks
Every investment comes with uncertainty.
DVN is no exception.
→ Unlike software companies that generate recurring subscription revenue, DVN operates in a cyclical business where earnings and cash flow are heavily influenced by commodity prices.
Oil prices fluctuate and natural gas prices fluctuate.
Economic slowdowns can reduce energy demand, while geopolitical events can cause sudden price swings in either direction.
→ Those risks are simply part of investing in the energy sector.
There’s also execution risk.
DVN still has to allocate capital wisely, control operating costs, integrate acquisitions successfully, and continue producing energy efficiently across its portfolio of assets.
Finally, while I believe artificial intelligence could become an important long-term driver of electricity demand, there’s no guarantee that every energy producer benefits equally.
Themes don’t play out in straight lines and markets don’t reward every company the same way.
That’s why I try not to build an investment thesis around a single narrative.
Instead, I look for businesses that can succeed for multiple reasons.
For me, that’s what makes DVN interesting.
Artificial intelligence isn’t the whole story.
It’s simply another reason to pay attention.
My Investment Thesis
One of the reasons I enjoy writing these Top Pick of the Week articles is that they force me to think beyond the obvious investment narrative.
It’s easy to follow headlines.
It’s much harder to understand what’s happening beneath them.
Artificial intelligence may become one of the defining technological shifts of our lifetime. Most investors naturally focus on the companies building the chips, writing the software, or operating the cloud infrastructure that powers it.
Those businesses deserve the attention they’re receiving.
However, I don’t think they’re the only opportunities worth studying.
Sometimes the market rewards investors who take one more step, who ask one more question, and who look one layer deeper.
That’s exactly what happened during my research.
I didn’t begin this article looking for an oil and natural gas producer.
I began by looking for a utility company.
That search led me somewhere I didn’t expect.
It led me to a business with diversified operations, meaningful exposure to both oil and natural gas, high-quality assets across some of North America’s most productive energy regions, and a valuation that Morningstar currently estimates is roughly 20% below fair value.
Just as importantly, it led me to a company that appears positioned to benefit from more than one long-term trend.
Traditional energy demand isn’t disappearing.
At the same time, the infrastructure supporting artificial intelligence is increasing the need for reliable electricity, creating another potential source of long-term demand for natural gas.
That doesn’t make DVN an AI stock and it doesn’t mean artificial intelligence alone will determine the company’s future.
It simply means I believe the market may be overlooking one part of the story.
That’s the kind of opportunity I enjoy researching most.
Not because I think I’ve found a hidden gem, but because I think asking better questions often leads to better investment ideas.
For me, Devon Energy Corp. DVN 0.00%↑ represents exactly that.
Final Thoughts
When I first started researching this week’s Top Pick, I thought I was writing an article about utility companies.
Instead, I ended up writing about curiosity.
I don’t think that’s a coincidence.
The longer I invest, the more convinced I become that curiosity is one of the most valuable assets an investor can have.
The market encourages us to chase headlines, to react to the latest news, and to buy whatever everyone else is talking about.
Sometimes that’s the right decision and often, it isn’t.
The investors I admire most rarely stop at the obvious answer.
They keep asking questions.
When everyone was talking about artificial intelligence, I asked what powers it.
When I started researching utility companies, I asked where their electricity comes from.
That single question changed where my research led me.
More importantly, it reminded me of something I never want to forget.
Great investing isn’t about finding all the answers.
It’s about asking better questions.
The best opportunities don’t always come from predicting the future.
Sometimes they come from looking one layer deeper.
This week, that led me to Devon Energy Corp. DVN 0.00%↑ .
Next week...who knows where curiosity will lead.
Know the Big Picture. Focus on the Edge. 👑
Stay one step ahead of the market.
Following a systematic approach, reading market structure, and staying disciplined compounds over time.
Let me know what you’re watching and thank you so much for reading! 🙌
-Nurse Jess 🤝
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Financial Disclaimer: This is not financial advice. All trades carry risk. Biotech stocks are highly volatile and speculative. Always do your own due diligence and consult with a financial advisor before making investment decisions.
👑 Question of the Week:
I started researching AI... and ended up investing in an oil and natural gas producer.
It happened because I asked one more question.
What's an investment you've discovered by looking one layer deeper?
I'd love to hear the unexpected rabbit holes your research has taken you down. ⬇️
Started DVN today!