We recently compiled a list of the 10 Most Profitable Cheap Stocks to Buy Now. In this article, we are going to take a look at where Exxon Mobil Corporation (NYSE:XOM) stands against the other most profitable cheap stocks to buy.
US stocks rose on Friday, May 2, as the S&P 500, Dow Jones Industrial Average, and the tech-heavy Nasdaq all posted impressive gains. The S&P 500 added nearly 1.5% and this marked the ninth straight day of gains to mark the longest winning streak for the S&P 500 since November 2004. The Dow rose 1.4% to also report a ninth winning day in a row. Meanwhile, the Nasdaq gained roughly 1.5%.
The rally comes after China signaled openness to trade talks and a better-than-expected monthly US jobs report. In April, the US economy added 177,000 nonfarm payrolls, which was more than the 138,000 economists had expected. The unemployment rate remained steady at 4.2%. This data indicated resiliency in the labor market despite stock market uncertainty in April due to tariff concerns.
Investors were also encouraged by indications that the US-China trade war could be easing. On Friday, China said it is evaluating recent US proposals for trade talks to see how serious Trump’s administration is about a change in policy stance. China’s commerce minister stated that the “door is open” if the US would agree to pull back on reciprocal tariffs. These comments helped reduce concerns about the risk of an economic slowdown by the tariffs.
Overall, hopes for improved US-China relations combined with solid job growth helped boost confidence on Wall Street.
Methodology
To compile our list of the 10 most profitable cheap stocks to buy now, we used the Finviz stock screener to find stocks with a forward P/E ratio of less than 15. We sorted our results based on market capitalization and picked the top 25 cheap stocks trading at under 15 times their forward earnings as of April 29, 2025. Next, we focused on profitability and narrowed our choices to stocks that had trailing twelve-month (TTM) net income of more than $1 billion. Finally, we focused on the top 10 profitable stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds. The 10 most profitable cheap stocks to buy now were then ranked in ascending order based on the number of hedge funds holding stakes in them as of Q4 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Exxon Mobil Corporation (XOM) The Most Profitable Cheap Stock to Buy Now?
A refinery, the sun illuminating its engineering complexity.
Exxon Mobil Corporation (NYSE:XOM) is an American international energy and petrochemical company. The company holds an industry-leading portfolio of resources and its main businesses are Upstream, Energy Products, Chemical Products, and Specialty Products. Exxon Mobil Corporation (NYSE:XOM) also owns and operates the largest CO2 pipeline network in the US. It is one of the largest integrated fuels, lubricants, and chemical companies in the world. XOM ranks among the most profitable cheap stocks to buy now.
In December 2024, the company announced its plans through 2030 to build on its unique strengths and generate an additional $20 billion in earnings potential and $30 billion in cash flow potential over the next six years. Exxon Mobil Corporation (NYSE:XOM) expects to grow its earnings at a compound annual growth rate (CAGR) of 10% and cash flow at 8%. The company will also be looking to make strategic moves to achieve $7 billion in structural cost savings by streamlining business processes, optimizing supply chains, improving maintenance turnaround processes, and upgrading technology and data systems. Following its acquisition of Pioneer in 2024, Exxon Mobil Corporation (NYSE:XOM) has announced plans to increase annual synergies by over 50% to more than $3 billion. With this acquisition, the company has the largest contiguous acreage position in the Permian Basin with twice the number of low-cost drilling locations compared to its closest competitor. In 2024, the company reported that it achieved record production from both its original and newly acquired Permian assets. Exxon Mobil Corporation (NYSE:XOM) is investing in technology to make operations more efficient and aims to roughly double production in the Permian Basin to approximately 2.3 million barrels of oil equivalent per day by 2030.
Overall, XOM ranks 4th on our list of the most profitable cheap stocks to buy now. While we acknowledge the potential of XOM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
