We recently published a list of 10 Best Bargain Stocks to Buy in May. In this article, we are going to take a look at where Exxon Mobil Corporation (NYSE:XOM) stands against other best bargain stocks to buy in May.

While increasing tariffs and a hard sell-off have resulted in uncertainty, Neuberger Berman, an investment manager, expects that negotiations can bring some relief to initial tariff proposals. Furthermore, the firm anticipates a sharply slower growth than a US recession. Also, it believes that stimulus in Europe and China can rejuvenate global industrial activity, and the firm recommends styles, sectors, and regions that are most geared to it.

Investment Style- Where Do Opportunities Lie?

Given that a significant amount of tariff shock has now been priced in, Neuberger Berman is constructive on global equities for the remainder of the year. The firm expects that an ongoing recovery in the global industrial economy might be dampened but not derailed. The underlying momentum in the goods economy is expected to support equities that are most levered to it. Furthermore, the firm prefers value over growth (which is relatively expensive) and small caps over large caps. While an overdose of growth-inhibiting policy can impact the relatively healthy economy and push it into recession, the investment management firm believes that the US hasn’t yet reached that point. As per the firm, performance during the decline demonstrates relative strength in some of the more cyclical economic sectors in the US and around the world. The goods-oriented sectors, regions, and styles continue to outperform amidst the recent sell-off.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

What Lies Ahead?

S&P Global expects inflation to remain closer to 3.0% in 2025 as tariffs raise the prices along the domestic supply chain as well as for the end consumers. For 2026, the firm expects growth to pick up after a slow start. This is because of the abatement of uncertainty associated with the structure of tariffs and the further easing of the policy rate by the Federal Reserve. Also, the growth is expected to be aided partly because of a more favorable growth backdrop in the eurozone, which can help expand US exports.

Neuberger Berman opines that a combination of improving fundamentals and stabilizing risks increased the optimism in the energy sector. As per the firm, increased global industrial activity is expected to continue to buoy oil demand and keep prices aloft. Furthermore, energy seems to be the most undervalued sector in the S&P 500 relative to the current and expected earnings growth. The investment management firm believes that much of the negative news, including regulatory concerns and geopolitical risks, seem to be factored in. This suggests that energy stocks can increase as the sentiment improves.

Our Methodology

To list the 10 Best Bargain Stocks to Buy in May, we used a screener to shortlist the companies that trade at a forward P/E of less than ~20.0x. Next, we chose the ones that analysts see upside to, as of April 11. We also mentioned hedge fund sentiments around each stock, as of Q4 2024. Finally, the stocks were arranged in the ascending order of their hedge fund sentiments.

Why are we interested in the stocks that hedge funds pile into? 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).

Aerial view of a major oil rig in the middle of the sea, pumping crude oil.

Exxon Mobil Corporation (NYSE:XOM)

Forward P/E as of April 11: ~13.4x

Average Upside Potential: ~22.1%

Number of Hedge Fund Holders: 104

Exxon Mobil Corporation (NYSE:XOM) is engaged in the exploration and production of crude oil and natural gas. Jason Gabelman, an analyst from TD Cowen, remains optimistic about the company’s stock, given its focus on maintaining a reasonable near-term valuation. This, together with the clear pathway to FCF growth, continues to support the analyst’s optimism. Furthermore, Exxon Mobil Corporation (NYSE:XOM)’s strategic efforts in upgrading the portfolio while, at the same time, managing its capital expenditures effectively with the help of technology-driven efficiencies and a healthy project organization cement its financial health. Given the structural cost reductions achieved over the past few years and a commitment to value creation, the company exhibits potential for sustainable growth, says the analyst.

Exxon Mobil Corporation (NYSE:XOM)’s expansion into the low-carbon power sector offers strong growth potential. With the global energy markets pivoting towards cleaner sources, its investments in this area can place it well as a leader in the energy transition. Furthermore, the diversification can result in the opening up of new revenue streams, which can attract environmentally-conscious investors and can potentially offset the risks related to the future regulations on fossil fuels. Exxon Mobil Corporation (NYSE:XOM) remains focused on positioning itself for future growth via strategic initiatives. It is expected to leverage synergies from its Pioneer Natural Resources acquisition.

Overall, XOM ranks 9th on our list of best bargain stocks to buy in May. While we acknowledge the potential of XOM as an investment, our conviction lies in the belief that some deeply undervalued 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 a deeply undervalued AI stock that is more promising than XOM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.