APA Corporation, NEO Battery Materials, JD.com – Sector rotation ahead

APA Corporation – Beneficiary of the next energy surge

After the surge in gold and silver prices, crude oil was one of the big disappointments on the commodities market in 2025. Oversupply and a weakening industry put pressure on prices. But the outlook is brightening. The rapidly rising energy demand from AI data centers is already driving up electricity and gas prices in the US. If oil follows suit, producers and explorers could be poised for a comeback.

One potential beneficiary is APA Corporation. The Texas-based oil and gas producer, with a market capitalization of around USD 9.4 billion, is active in the US, Egypt, and the North Sea and holds attractive licenses off the coast of South America. Although revenues have been stable recently, profits have declined significantly. In the past twelve months, APA generated around USD 1.51 billion, down from USD 3.67 billion in the record year of 2022. On a positive note, debt has been almost halved in five years. It stands at around USD 4.6 billion, which corresponds to only about 0.8 times EBITDA.

This solid balance sheet is reflected in a strikingly favorable valuation. With an EV/EBITDA of 2.74, APA is around 60% below the industry average, and its P/E ratio of 7.4 is also significantly below. The low price-to-cash flow ratio also underscores the Company's strong cash flow generation, from which investors benefit directly via a dividend yield of 3.8%.

In terms of chart analysis, the stock is showing increasing strength. Despite weak oil prices, an upward trend has been established since April of this year, underpinned by a golden cross and a new annual high. The stock is currently consolidating, and a breakout above the horizontal resistance level at USD 25.83 would generate a strong buy signal.

AI consumes electricity – NEO Battery Materials on the verge of a breakthrough

The AI supercycle could be slowed down by a critical bottleneck: the lack of energy. While processors are becoming increasingly powerful, many applications in drones, robotics, and autonomous electronics fail due to limited battery life. Until now, the market has relied on standardized mass-produced cells from highly concentrated supply chains. For manufacturers with special performance requirements, the only option is often expensive in-house development, creating a structural gap between standard products and high-tech needs.

This is precisely where NEO Battery Materials comes into play. The Company pursues a consistently customer-specific approach and develops high-performance batteries for demanding applications. At its heart is a proprietary silicon anode that enables significantly higher energy density. NEO has succeeded in cost-effectively controlling typical material problems such as the severe swelling of silicon and manufacturing the anodes 60 to 80% cheaper than comparable solutions. In addition, the Company is pushing ahead with the establishment of an independent supply chain that is not focused on China, which represents a strategic advantage for Western customers.

Operationally, NEO has recently set an important course. Through its subsidiary NBM Korea, a binding lease agreement was signed for a production-ready electrode factory in the Gimje Free Trade Zone in South Korea. The goal is to minimize scaling risks and generate cash flow more quickly. The local team brings experience from established battery companies. Initial contracts with drone and robotics manufacturers worth millions underscore the demand. In the long term, NEO plans to establish a resilient battery supply chain in North America.

Particularly noteworthy is the recent news that NEO has received a second short-term battery order from a Fortune 500 automaker. Following an initial order from Asia, a North American OEM is now following suit. The pilot-scale batteries are already in production and will be delivered for integration testing in the coming months. Revenue is to be realized upon delivery. The decisive factor here is manufacturing quality. NEO has a megawatt-hour production facility with commercial-scale electrode lines and a complete pouch cell infrastructure. It is precisely this process stability that could make the difference and pave the way for long-term supply contracts.

The strategically important orders have hardly been recognized by the stock market. The NEO share price is hovering around CAD 0.47, and the innovator's market capitalization stands at CAD 65.90 million.

JD.com – Is China's consumer giant awakening?

Despite structural problems, China's economy is sending out the first signs of hope. Trade barriers, overcapacity, and the real estate crisis have long paralyzed private consumption. However, low inflation rates, a more relaxed monetary policy, and fiscal stimuli from Beijing are increasingly improving the mood. Initial data suggests that Chinese consumers are spending more again, a development that is likely to benefit online retailers in particular.

JD.com could be one of the primary beneficiaries. After the end of the coronavirus pandemic, the group's operations were slow to pick up. Between 2021 and 2024, revenues rose by only around 6% to USD 158.8 billion. Only recently did growth resume after JD.com expanded into new business areas such as delivery services and booking platforms. This offensive is weighing on margins in the short term, which is why net profit in 2025 is likely to be below the previous year's figure of USD 5.67 billion.

However, analysts expect a significant acceleration from 2026 onwards. In addition, the planned spin-off of the supply chain subsidiary JD Industrials could bring in fresh capital. In terms of valuation, JD.com is remarkably cheap. With a market capitalization of around USD 42 billion, cash reserves cover almost two-thirds of this. Accordingly, the P/E ratio is low at 8.2, more than 50% below the industry average.

The oil and gas producer APA has managed to establish an upward trend despite declining oil prices. JD.com is attractively valued relative to its peer group. NEO Battery Materials has received another battery order from a North American Fortune 500 automaker.