5 Energy Stocks Leading This Year's Biggest Rally

After significantly underperforming the market 2025, the energy sector is leading the way in 2026, with the Energy Select Sector SPDR ETF (NYSE:XLE) up more than 20% year to date (YTD).

This momentum is taking center stage following the outbreak of war in Iran, but the swing started at the end of last year.

A combination of geopolitical catalysts, booming demand for AI infrastructure, and good old-fashioned mean reversion are major driving factors, and this rally likely has room to run, given our ever-expanding energy demands.

Today, we’ll look at five energy sector stocks across a diversified spectrum of oil and gas industries that could be portfolio leaders for the rest of the year (and potentially beyond).

Let’s get to it.

Cheniere Energy Inc.

LNG exports are expected to nearly double by 2030, and Cheniere is expanding its Corpus Christi location to facilitate increased production. Three different expansion projects are expected to be completed in 2026, 2028, and 2029, respectively. Cheniere announced record production levels in its Q4 2025 earnings report, and the revenue growth is likely sustainable since most of its contracts span at least 20 years.

The poor 2025 performance helped reset the company’s valuation, which now sits at just 13.7 times earnings and 2.6 times sales. Investors began noticing the turnaround in December, and the stock quickly broke out above the 50-day and 200-day moving averages as Q1 2026 began.

While the fundamental and technical tailwinds remain strong, the stock has reached Overbought territory on the Relative Strength Index (RSI), and volatility is increasing. A pullback in the next few weeks might offer a better entry point for new investors, so a strategy that scales into a position might be prudent here.

Diamondback Energy Inc.

Exxon Mobil Corp.

ExxonMobil also announced its 38th consecutive annual dividend increase and repurchases about $20 billion in shares each year. But despite this recent success, XOM shares still trade at just 22 times earnings, well below the industry average of 28.

XOM shares have surged more than 20% to start 2026, and the breakout has strong technical tailwinds behind it. After building strong support along the 50-day moving average to end 2025, the share price rallied out of a multi-year range, setting its first new all-time high since 2024. An overbought RSI broke the uptrend, but this reset could be the break new investors needed to get in.

The Williams Companies Inc.

Like many of its energy sector peers, 2025 was a rough year for WMB shares. A lost year ended with a four-month consolidation into a tight range, but that range finally broke earlier this year. The Moving Average Convergence Divergence (MACD) indicator hinted at a potential momentum shift when the two lines crossed the histogram, and now the stock is in a bullish uptrend, with the price well above its 50-day and 200-day moving averages. 

EOG Resources Inc.

EOG hasn’t made a new all-time high since 2022, but this could be the year that streak is finally broken if current trends continue. The stock broke out above the 50-day and 200-day moving averages in January, with a bullish MACD confirming the momentum shift. The RSI is also showing tremendous upward momentum, making EOG one of the breakout energy candidates for 2026.

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