Chevron Stock (CVX) Is Getting Into Lithium. But What’s the Real Endgame?

Chevron (CVX) is one of the largest oil and gas companies in the world, known for its deep pockets, global reach, and consistent dividends. But lately, Chevron is making moves that don’t look like traditional Big Oil. 

The company just leased 125,000 acres in Texas and Arkansas to extract lithium, a critical material for electric vehicle batteries and energy storage.

This pivot raises a big question: Why is a legacy oil giant diving into battery metals?

And more importantly, what’s the real strategy behind it?

Is this a PR move, or the start of a much bigger shift?

Let’s break it down.

The IDDA Analysis framework is used to analyze companies and determine which are right for you. There are five steps to the process:

1. Capital Analysis – Your personal risk tolerance.
2. Intentional Analysis – Your unique financial goals and timelines based on your age, health, and lifestyle.
3. Fundamental Analysis – The viability of the asset based on company performance, financial health, and market position.
4. Sentimental Analysis – The current emotions of Wall Street and other market participants.
5. Technical Analysis – Historical price action to identify key psychological levels and market patterns.

Let’s dive into the IDDA analysis to assess Chevron’s fundamental, sentimental, and technical outlook.

IDDA Point 1&2: Capital & Intentional 

The capital and intentional analysis need to be conducted by you.

Select your assets in alignment with your financial goals. Listen to your intuition about each asset, but remember to invest based on your own values, not just because of recommendations from others.

Don’t know your risk tolerance? Get Kiana Danial’s risk management toolkit for free here.

IDDA Point 3: Fundamental

🔷 Solid Financial Backbone
Chevron is still a cash machine. In Q1 2024, it reported $5.5 billion in earnings. That’s down from the oil boom years of 2022, but still strong, considering lower oil prices and rising costs. Free cash flow was $6.3B, and the company kept its quarterly dividend at $1.63/share, showing confidence in long-term stability.

🔷 Strategic Expansion into Lithium
Chevron recently leased 125,000 acres in Texas and Arkansas for lithium extraction. This isn’t just a side hustle, it’s a calculated move into the EV and energy storage space. By using its subsurface expertise and infrastructure, Chevron hopes to become a key player in U.S. critical mineral supply.

🔷 The Hess Acquisition Drama
Chevron’s $53 billion deal to acquire Hess is under pressure. ExxonMobil is fighting it in arbitration over Guyana’s oil rights. If Chevron loses access to Guyana’s Stabroek block, it could weaken their long-term production outlook. But if they win, they secure one of the fastest-growing oil discoveries on Earth.

🔷 Oil Still Pays the Bills
Despite the lithium buzz, 90%+ of Chevron’s revenue still comes from traditional oil and gas. The company’s global upstream portfolio, including the Gulf of Mexico, Permian Basin, and LNG assets keeps it profitable even in a cooling market.

🔷 Sector Pressure + Lawsuit Risk
Oil majors are facing tighter regulations and environmental lawsuits. Chevron is heading to the U.S. Supreme Court over a $740M coastal damage ruling in Louisiana. A loss could spark more claims nationwide, adding legal and reputational risk.

Fundamental Risk: Medium

Chevron’s cash flow, dividend, and global assets are strong. But the Hess arbitration, lithium execution uncertainty, and climate-related litigation add a few red flags to watch.

IDDA Point 4: Sentimental

Overall sentiment is bullish for Chevron.

Strengths:

✅ Lithium pivot sparks excitement. Traders praise Chevron’s 125 k-acre Texas-Arkansas lithium play as a smart, forward-looking move.
✅ Analysts like the cash story. Morningstar’s “Bulls Say” highlight strong free cash flow and cheap, legacy Permian acreage that still prints money.
✅ Oil price tailwind. Middle-East tension lifts Brent and boosts energy stocks; Chevron outperforms while tech wobbles.
✅ Index love. MarketWatch notes days when Chevron’s gain is a top Dow contributor, signalling steady big-cap inflows.
✅ Positive C-suite narrative. CEO Mike Wirth tells CERAWeek that Chevron can grow output and still lower carbon; investors read that as “steady hand at the wheel.”

Risks:

❌ Guyana drama. Exxon’s arbitration could block the Hess deal and keep Chevron out of Stabroek’s giant oil pool.
❌ Louisiana lawsuit cloud. A $740 M verdict heads to the Supreme Court; a loss could open the floodgates for more coastal claims.
❌ EV-credit rollback. Senate bills to kill the $7,500 EV incentive may cool battery demand and dull near-term lithium buzz.
❌ Morningstar bears caution. Bears flag long-term uncertainty once Permian growth slows and energy transition speeds up. 

Sentimental Risk: Medium

Chevron enjoys fresh optimism, yet legal and policy clouds keep emotions from turning euphoric.

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IDDA Point 5: Technical Analysis

🔶Rectangle Pattern Forming

CVX is moving inside a well-defined rectangle pattern on the weekly chart, bouncing between key levels for over 18 months (marked in orange). This shows clear indecision, neither bulls nor bears have taken full control.

🔶Support at $141.35

This is the bottom of the range, acting as strong support. CVX just bounced off this zone again, and it’s historically been a spot where big buyers show up. But if the price breaks below $141, the next support levels could be $132.66 or even $114.04, a more significant correction.

🔶 Resistance at $166.82

This is a very important key psychological level. Every time price approaches this zone, sellers step in. If CVX breaks above this level with strong volume, it could lead to a sharp rally toward higher psychological levels like $189, or even $231.

🔶Fibonacci Levels Line Up

The 0.5 and 0.23 retracements align well with $141.35 and $166.82—reinforcing these levels as decision zones. The 0.236 level also matches resistance at $166.82.

🟢RSI is at 56, and approaching overbought zone. There’s still room for growth so we could see the stock going up a little bit more before a reversal is due.

This stock is suitable for swing trading due to the rectangle pattern that CVX has been formed over the years.

Buy Limit (BL) levels:

📌 $141.35 – High Risk

📌 $132.66 – Moderate Risk

📌 $114.04 – Low Risk

Profit Taking (PT) levels:

📌 $166.82 – High Risk

📌 $189.38 – Moderate Risk

📌 $231.34 – Low Risk

Here are the Invest Diva ‘Confidence Compass’ questions to ask yourself before buying at each level:

1. If I buy at this price and the price drops by another 50%, how would I feel? Would I panic, or would I buy more to dollar-cost average at lower prices? (hint: this question also reveals your CONFIDENCE in the asset you’re planning to invest in).
   
2. If I don’t buy at this price and the stock suddenly turns around and starts going up again, will I beat myself up for not having bought at this level?
   

Remember: Investing is personal, and what is right for me might not be right for you. Always do your own due diligence. You should ONLY invest based on your own risk tolerance and your timeframe for reaching your portfolio goals

Technical Risk: Medium

Chevron is trading inside a well-defined sideways range, offering clear support and resistance levels—great for structured entries. However, the lack of a confirmed trend (up or down) adds uncertainty. A break above $166 could trigger upside momentum, but failure to hold $141 support opens the door to deeper downside. Until a breakout happens, risk remains balanced between opportunity and breakdown.

Summary: Final Thoughts

Chevron (CVX) is no longer just an oil company—it’s quietly positioning itself for the next energy shift. From a fundamental view, its strong cash flow, stable dividend, and bold lithium pivot give it long-term potential. But the unresolved Hess arbitration and the looming Louisiana lawsuit introduce legal risks that investors shouldn’t ignore.

Sentiment leans cautiously bullish. The lithium move has sparked curiosity, and recent price action shows buyers stepping in. But political tension—like the rollback of U.S. EV incentives—and unresolved asset claims in Guyana keep the market from going all-in.

Importantly, rising instability in the Middle East has pushed oil prices higher, which tends to benefit Chevron in the short term. However, geopolitical risk is a double-edged sword: it can boost profits, but it can also create volatility and supply chain uncertainty.

Technically, CVX is range-bound between $141 and $167. It recently bounced off the lower end, and if it breaks resistance, it could head toward $180+. But until it escapes this box, the trend remains neutral.

Overall Stock Risk: Medium

Chevron is financially sound and exploring smart new frontiers—but legal, geopolitical, and technical resistance levels mean investors need to stay both grounded and watchful.

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If you enjoyed my blog post about Chevron, you’ll love my post Behind the Dip: Is GitLab Stock (GTLB) Setting Up for Something Bigger Than We Realize?

Disclosure: I am not a financial advisor, and this is not financial advice. This information is for educational purposes only. This post about Chevron may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please see the terms of service page for more information.