Is Phillips 66 (PSX) Still a Buy After its Massive 2026 Rally?

Phillips 66 (NYSE:PSX) experienced a significant surge in its stock value following a strong Q2 report on August 5, 2026, as supply disruptions in the Middle East and Russia drove up US gasoline and diesel crack spreads to record levels. The company reported its strongest quarterly profit since 2022, with executives predicting that these high refining margins would continue.

Aided by the global shortage of refined products, Phillips 66 plans to operate refineries at near-capacity levels in the third quarter. The company has been aggressively reducing its debt, cutting net debt by 25% to $16.5 billion and approving a $10 billion increase to its share repurchase program. Additionally, Phillips 66 owns 49.9% of the $5 billion Western Gateway Pipeline system, which is expected to further boost its refining capacity.

Despite the current positive outlook, investors should be aware that refining margins may decline once global energy supplies stabilize. While Phillips 66 shows strong near-term prospects, some analysts argue that AI stocks may provide greater upside potential and lower risk.