By Avi Salzman

Oil prices are down 20% this year, so oil-service companies are turning to a side gig: powering data centers. It isn't clear if that pivot will lead to success, but it is at least a distraction from the problems in their main operations.

Shares of Liberty Energy, the fracking company formerly run by Energy Secretary Chris Wright, soared 28% on Friday after the company reported its third-quarter earnings. The numbers themselves weren't great -- the company met earnings expectations and missed revenue estimates -- but investors are starting to get excited about its power business.

Liberty rose another 3.5% on Monday.

Other energy companies are getting less credit for their data-center operations. SLB, the world's largest oil-services company, also reported so-so earnings Friday, but said its data-center arm is growing quickly, doubling revenue year over year. Shares fell slightly on Friday and rose 2.5% on Monday.

Liberty's main business is fracking, which involves using advanced techniques and equipment to get oil and natural gas out of shale rock. That business rises and falls based on how much money oil companies are spending.

When oil prices are low, as they are today, the fracking business dries up. The company's revenue fell 17% year over year in the third quarter. Liberty said that activity is so low that North American oil production may start to fall for the first time in years.

As part of its core business, Liberty also provides power and natural gas to drilling sites. In January, it started to talk about expanding that side business to provide power to other users, such as data centers. No big deals have been announced yet, but the company says they should be coming soon.

The company's sales pipeline has doubled in the past three months, CEO Ron Gusek said on a call to discuss the results. "I would tell you also that the urgency in that sales pipeline has increased meaningfully," he said.

Liberty projects that it can deliver more than one gigawatt of power capacity by the end of 2027. That is about as much as is produced by a nuclear reactor.

Liberty is mostly valued as an oil services company. Its shares are still down 23% this year, but investors are warming to the data-center angle.

The strategy isn't without its risks. Liberty is investing in equipment to meet the demand, and its debt load has been rising. Its net debt rose $99 million in the latest quarter, leaving the company with its highest debt load in years, according to FactSet.

SLB is also touting its data-center business, though investors aren't ready to buy the stock for that angle. The problem for SLB may be that its core oil and gas operations are so big that any new business lines would have to grow much larger to affect its overall results.

The company's "Data Center Solutions" revenue was $331 million for the first nine months of 2025. Total revenue over that period was $26 billion.

Write to Avi Salzman at avi.salzman@barrons.com

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October 20, 2025 17:16 ET (21:16 GMT)

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