Oil and Gas Stocks Are Surging, but Nvidia Is Still Worth Double the S&P 500 Energy Sector. Are Energy Stocks Undervalued?

2026-03-07 21:07:00 ET

Even before factoring in Monday's monster surge in oil and gas stocks, the energy sector was already up 24.2% year to date compared to just 0.5% for the S&P 500 (SNPINDEX: ^GSPC) . Sectorwide underperformance in 2025, paired with rising oil prices and now geopolitical tensions in Iran, are fueling the rally.

But investors may be surprised to learn that energy stocks account for only 3.5% of the S&P 500, whereas Nvidia (NASDAQ: NVDA) alone makes up 6.9%. That means Nvidia is worth more than the combined value of ExxonMobil (NYSE: XOM) , Chevron (NYSE: CVX) , and the other 20 or so energy stocks that are S&P 500 components.

Here's why Nvidia deserves to make up such a large portion of the U.S. stock market, how to think about energy within the context of the broader market, and why energy stocks are still relatively cheap.

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