What if EXXON is the Next NVIDIA? The Game Changer Nobody Sees Coming
XOM from #20 Back to Top 5 - and the $50B Canadian Giant Nobody's Watching
The Market Cap Dislocation Setup: 32 vs 3
History shows us how assets rotate, as market cycle leadership always changes.
Growth in earnings, growth in revenue, growth in “AI transformation” - as this growth is existing increasingly in fantasy.
And in reality, technology is invariably disinflationary.
Three own actual assets: Saudi Aramco, Exxon, Chevron.
Reserves in the ground. Scarce commodities. Real infrastructure you can’t replicate.
The gap between fake growth and real assets isn’t just wide - it’s asymmetric.
And in the near future, this will close violently.
The Post-Crash MAG 7: The Stocks Leading The Next Cycle
To be very clear, this is a NOT an article about calling a top, or even about the end being next Tuesday.
The EXXON Fall from Grace
Exxon has always been a top 5 market cap.
Always.
2000s through 2010s - Exxon was defining blue-chip investing. The stock you couldn’t NOT own. The foundation of every institutional portfolio.
Today? #20.
Fallen behind software companies, chipmakers, and “growth” stories that are generating negative cash flow.
This isn’t a rotation. This is complete dislocation from historical norms.
When the largest energy company on Earth - with irreplaceable global infrastructure and decades of reserves - is trading like a forgotten dividend stock, something’s breaking in the pricing mechanism.
The 1968-1981 Playbook
We’re seeing this movie again.
1968-1981: The S&P 500 was going nowhere. Fourteen years of sideways hell.
But XLE, XLI, and XLB? They were tripling their market cap versus the index.
Energy, industrials, materials - the “real economy” - was becoming the leadership while growth stocks were dying a slow death.
What was causing the shift? Growth was disappearing. The Nifty Fifty growth darlings (IBM, Polaroid, Xerox) couldn’t deliver the earnings growth priced into their multiples. When growth dies, capital rotates to scarcity.
We’re in 1966 right now. Maybe 1967.
Gold is already leading - the classic signal that paper assets are losing and hard assets are winning. Everything except SPX, NDX, Silver, BTC, and ETH is already in a confirmed secular bear market versus Gold.
The secular rotation confirmation is 1-2 years away. The initial readings are present. The pattern is setting up exactly like it did before 1968.
Why Growth is Dead
Here’s the fundamental problem: Tech is deflationary by nature.
Software margins approach 100% - prices collapse toward zero.
Automation is eliminating labor - deflationary.
Efficiency gains mean doing more with less - deflationary.
AI is making everything faster, cheaper, more efficient. That’s the OPPOSITE of growth.
Markets are pricing NVDA, MSFT, and the Magnificent 7 for “AI-driven growth” - but AI’s entire purpose is to reduce costs, compress margins, and eliminate jobs. Where’s the GDP growth in that?
It’s not coming. It can’t come. Tech creates value through deflation, not expansion.
Meanwhile, governments are desperate. They can’t find organic growth, so they’re manufacturing it. Michael Howell sees it clearly: capital is already being routed to the “real economy.”
The Inflation Reduction Act. The CHIPS Act. Defense spending is surging. Infrastructure mandates. Reshoring requirements.
This isn’t future speculation - it’s current policy. Governments are forcing capital into energy, manufacturing, commodities, and physical infrastructure because growth doesn’t exist anywhere else.
The rotation isn’t coming. It’s already happening.
The Global Energy Crisis
Let’s talk about supply.
US shale is in twilight. The sweet spots are drilling out, the decline rates are accelerating, and the easy gains are over. Shale was never a permanent solution - it was a short-term boom that’s now fading.
Saudi Arabia? No incentive to raise output. They’re needing $80+ oil to balance their budget. They’re not flooding the market to crash prices - they’re managing for higher prices.
OPEC discipline is holding because every member is needing revenue. The days of swing production to suppress prices are over.
Global energy investment has been starved for 15 years. ESG mandates, “energy transition” narratives, and political pressure killed capital deployment.
But demand? Demand isn’t cooperating with the peak oil 2030 fantasy.
The Perfect Storm We Created
We built our own trap, and we can’t escape it.
The “energy transition” required three things: solar/wind scaling up, nuclear building out, or some magical breakthrough.
Solar and wind? Intermittency is a physics problem, not an engineering challenge. You can’t run a grid on weather-dependent power without massive battery storage - and the economics don’t work at scale. Germany tried. Germany failed.
Nuclear? We destroyed it ourselves. Fukushima was a 1960s reactor hit by a once-in-generation tsunami. Actual radiation deaths: zero. Disaster-related deaths from evacuation: over 2,300.
The human response: NUCLEAR IS BAD. All of it. Everywhere. Forever.
We don’t make distinctions. One disaster, and we threw out the cleanest baseload power we had. The uranium supply chain collapsed, mining investment evaporated, and enrichment capacity was mothballed.
Now AI data centers are needing massive power, and everyone suddenly wants nuclear again. Except the supply chain is broken. It’ll take a decade minimum to rebuild - if it’s even possible.
The result? We’re stuck with hydrocarbons. Not by choice, but by elimination. We tried to transition away, politicized the alternatives, starved investment in the only thing that works, and created a supply crisis with no escape hatch.
Self-relegated to the past while demand keeps growing.
The Commodity Supercycle Intensifies
Trade wars are back. Tariffs, export restrictions, and economic nationalism are fragmenting global supply chains.
The result isn’t just inflation - it’s structural commodity scarcity.
When countries can’t rely on global trade, they’re stockpiling. When supply chains are fracturing, buffer stocks are increasing. When geopolitical tension is rising, energy security becomes non-negotiable.
Commodities aren’t just rallying - they’re entering a supercycle driven by deglobalization and underinvestment.
Gold is leading because it always leads the transition from paper assets to hard assets. It’s not predicting inflation - it’s confirming the regime change.
Hard assets are the only answer when growth is dying and governments are printing money to force activity in the real economy.
The Valuation Shift: P/E to NAV
When growth exists, markets use P/E multiples. Earnings growth justifies higher valuations.
When growth dies, markets shift to asset-based valuations. What do you own? What can’t be replicated? What’s scarce?
Exxon was always valued on Net Asset Value (NAV) during the 1970s. Reserves in the ground, infrastructure you couldn’t rebuild, refining capacity that took decades to construct.
Then came the “shareholder value” era, and everything became about quarterly earnings and P/E ratios.
But in a zero-growth, commodity-scarce, hard-asset regime? NAV comes back.
Exxon’s reserves aren’t just barrels of oil - they’re 40+ years of production from assets that can’t be duplicated. The infrastructure is sunk capital that’s already paid for. The refining integration captures margins nobody else can access.
When the valuation method shifts back to assets, Exxon’s market cap doesn’t just recover - it explodes.
Why Exxon Specifically
Because Exxon is still the best.
Track record? Unmatched. Exxon has navigated every oil cycle, every political regime, every supply shock for over a century. When things got hard, Exxon adapted. When others collapsed, Exxon survived.
Capital allocation? The best in the business. Disciplined, shareholder-focused, and ruthlessly efficient. No vanity projects, no ego-driven empire building.
Operations? Industry-leading. Exxon’s cost structure, safety record, and execution are the benchmark everyone else is measuring against.
And now: Guyana.
Guyana is Exxon’s game-changer - offshore, lower cost, and in a stable jurisdiction outside US political crosshairs. Over 11 billion barrels of recoverable reserves across 30+ discoveries, with production already reaching 660,000 barrels per day and targeting 1.3 million barrels per day by 2027.
This isn’t incremental growth. This is a game-changer.
In oil, scale is the moat. You can’t disrupt Exxon’s global infrastructure. You can’t replicate their Guyana position. You can’t match their downstream integration.
Exxon isn’t competing - it’s dominating a commodity where supply is constrained and alternatives don’t exist.
The Passive Flow Catalyst
Here’s the mechanical part everyone’s missing:
When Exxon moves from #20 back toward top 5, passive index funds are FORCED to buy.
This isn’t optional. Index funds weight by market cap. If Exxon is 1.5% of the S&P 500 at #20, but needs to be 3.5% at #5, they have to buy.
There’s over $13 trillion in passive index funds tracking the S&P 500.
A 2% weighting increase = $260 billion in forced buying.
That’s not discretionary. That’s not “if managers like it.” That’s structural, mechanical, unavoidable buying pressure.
This is exactly what happened with NVDA. As it climbed the market cap rankings, passive funds had to increase exposure. The buying became self-reinforcing - higher prices forced more buying, which pushed prices higher.
Exxon doesn’t need to become NVDA’s size to trigger this. It just needs to reclaim its historical top 5 position. That alone creates a feedback loop of institutional buying that compounds the move.
The Chevron Question
“Why not Chevron? Why not Shell?”
Simple: No asymmetry.
Chevron at $280B is discovered. It’s consensus. Institutional investors already own it at appropriate weights. Solid company, fairly valued.
Shell at $230B is facing European regulatory headwinds, energy transition pressure, and defensive positioning. Good dividend story, limited upside.
Both are fine companies. But they’re trading like fine companies.
Exxon at ~$490B (#20) has fallen from grace. It’s mispriced. The market is treating it like a declining legacy business when it’s actually the best-positioned energy giant for the next decade.
When looking for the NVDA parallel - the stock that becomes THE must-own - you don’t want consensus. You want dislocation.
Exxon is the dislocation.
The Asymmetric Canadian Alternative: Suncor
And if Exxon is the NVDA of the next cycle globally...
Suncor is the Exxon of Canada.
But with one critical difference: the asymmetry is even more extreme.
Exxon at ~$490B has room to double back to top 5. That’s the institutional thesis - solid, mechanical, high probability.
Suncor at $50 billion? This is where the asymmetric opportunity lives.
Same regime change. Same NAV revaluation. Same transition from P/E multiples to asset-based valuations.
But Suncor owns 40+ year oil sands reserves - irreplaceable infrastructure that can’t be built today at any price. The sunk costs are recovered. The breakevens are $30-40/barrel. The production is pure margin from here.
Suncor is the integrated Canadian giant. It’s Syncrude (the crown jewel of oil sands). It’s the institutional anchor for Canadian energy - the name that gets bought when capital flows north.
And technically? It’s breaking out of a 6-year cup and handle base right now.
Why Suncor Over Other Canadian Names?
Canadian Natural Resources? Excellent operator, great company - but it’s the pure-play alternative, not the integrated anchor.
Imperial Oil? Strong, but it’s 69.6% owned by Exxon - you’re getting Exxon’s discipline with Canadian assets. If you own Exxon already, Imperial is redundant.
Suncor is THE name. The Canadian Exxon. The integrated giant with refining, retail (Petro-Canada), and the largest oil sands position.
When institutional capital rotates to Canadian energy, Suncor is where it goes.
The Asymmetry
Markets are pricing Suncor like Canadian oil sands are expensive, dying assets.
Reality: They’re the lowest-cost, longest-reserve-life energy infrastructure in North America.
Exxon reclaiming top 5 = a double, maybe 2.5x over five years. High probability, institutional-grade trade.
Suncor moving from $50B to $150-200B? That’s a 3-5x. Same thesis, same regime change - but from a radically lower base.
You don’t need to choose. The trades complement each other:
Exxon = The global anchor, the institutional flow beneficiary, the must-own stock
Suncor = The asymmetric Canadian parallel, the 40+ year asset revaluation, the hidden giant
The Bottom Line
In the top 35 market cap companies, 32 are priced for growth that doesn’t exist.
Three own real, scarce, irreplaceable assets.
We’re entering a 1968-1981 regime change where hard assets are dominating and growth stocks are stagnating for a decade.
Exxon isn’t chasing NVDA. It’s becoming the NEXT NVDA - the defining stock of the era, the one institutions can’t not own.
And Suncor? It’s the asymmetric backup choice. The Canadian parallel with even more upside from an even lower base.
The foundation is already shifting. Gold is leading. Government capital is flowing to the real economy. The valuation method is reverting to assets over earnings.
Exxon at #20 is the dislocation.
Suncor at $50 billion is the asymmetry.
This isn’t a trade. It’s positioning for the next decade of market leadership.
The regime change isn’t coming. It’s already here.
The value provided here is not some chatGPT shit. This gotta be hours of fk research and years of experience. If you get the chance to shortcut this by reading this, hit the like/restack/comments
Thanks again Mark!
EXXponential increases are coming