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Applied Digital (APLD -0.38%) insiders have been buying the dip as the artificial intelligence (AI) stock continues to slide. The company's CEO and president bought a combined $6.7 million worth of shares on Oct. 16. Despite the insider buying, Applied Digital is down by more than 30% over the past month.

No doubt, sentiment around AI stocks has soured lately, but that doesn't mean fundamentals have weakened. These are some details to consider when deciding whether Applied Digital is a buy.

Image source: Getty Images.

Applied Digital is realizing AI revenue
Applied Digital makes money by building AI data centers. The company creates the facilities, and then it's up to customers to bring their own hardware. CoreWeave is one of Applied Digital's largest customers with 15-year leases valued at up to $11 billion in revenue over that stretch.

The total deal covers 400 megawatts, putting the value of each megawatt at $1.83 million per year. While some AI data center companies are multiple years away from building facilities and generating revenue, Applied Digital is already seeing big gains on its balance sheet. Revenue surged by 322% year over year to reach $341.9 million in its fiscal 2027's first quarter.

Costs have also been surging, leaving the company still unprofitable, though that's common in the AI data center industry. Even Nebius remains deeply unprofitable despite high revenue growth. This is normal because it costs a lot of money to build data centers. As Applied Digital completes more of its facilities and attracts more customers, revenue will start to outpace costs.

$19.44-$0.08 (-0.38%)

NASDAQ · As of 1:03 PM ET 10/28/26

AI demand isn't going anywhere
Every quarter seems to feature a news cycle of waning demand for AI and concerns about a popping bubble. However, the tech executives who know the most about the industry regularly speak about substantial growth and demand, and their fundamentals back up their talk.

Elon Musk told investors when discussing Space Exploration Technologies' quarterly results that the company is "hounded" by hyperscalers and dozens of smaller companies that are seeking compute. Demand is still accelerating, prompting higher contract values.

It's a good environment for Applied Digital as it brings more of its facilities online. Not only will it start to realize more revenue from its backlog, but Applied Digital is also gaining the flexibility to charge higher prices to future customers.

Musk told investors to expect $100 billion in annual recurring revenue by December. Applied Digital benefits from the same tailwinds as SpaceX's AI business. That should eventually show up in the stock price even though doom and gloom has been the common narrative in recent weeks.

Applied Digital's Achilles' heel
Although Applied Digital is in the right industry and is building high-demand infrastructure that can command lofty contract values, there are some problems. The two big flaws are that Applied Digital uses a colocation model and locks in long-term contracts. Colocation involves building a facility and letting the hyperscaler bring their own chips and other resources. It's a less capital-intensive effort, which lets Applied Digital build more data centers with less overhead.

However, there's a big catch. Remember the $1.83 million annual megawatt value Applied Digital secured with CoreWeave? That's not much when compared to Nebius landing $40 million to $50 million per megawatt each year on short-term deals.

Nebius puts more capital into its data centers and also operates a cloud platform. Neoclouds are more complex to set up than colocation facilities. However, the revenue ceiling is much higher. Nebius was only receiving annual contract values of $12 million per megawatt. The value of a megawatt has more than quadrupled in less than one year for short-term deals, and that type of momentum suggests more lucrative deals in the future.

Applied Digital hasn't put itself in a good position to capitalize on rising megawatt prices since it isn't a neocloud and it signs 15-year leases with its tenants. Meanwhile, capital expenditures can climb at these sites where Applied Digital has locked in relatively low annual contract values per megawatt. Applied Digital is in the right industry and looks oversold at current levels, but pure neoclouds are a better way to approach the opportunity.

Key Takeaways Aptiv's Q3 earnings are expected to fall 38.7% y/y, while revenues may decline 39.3% to $3.16 billion.The Versigent spin-off weighs on revenues, while new ADAS wins and tech partnerships offer partial support.Higher commodity costs, delayed vehicle launches and slower production ramps may pressure APTV's profits.
Aptiv PLC (APTV - Free Report) is set to report its third-quarter 2026 results on Nov. 3, before the opening bell.

The company’s earnings surprise history has been impressive. It surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an earnings surprise of 10.6% on average.

Q3 Expectations for APTVThe Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $3.16 billion, indicating a decline of 39.3% year over year due to continued effects from the recent spin-off of its Electrical Distribution Systems business into Versigent, partially offset by recently expanded partnerships with technological firms and new customer wins.

The company secured its first Gen 8 radar award from Volvo Cars and additional business for its Gen 6 advanced driver assistance systems (ADAS) platform. APTV has expanded its software capabilities through partnerships with NVIDIA and Kyndryl, extending its reach into edge AI and mission-critical enterprise applications.

The consensus estimate for Engineered Components' revenues is pegged at $1.75 billion, indicating a 2.2% year-over-year increase. Adjusted operating income is expected to be $297.4 million, suggesting a marginal year-over-year decline. Rising adoption of ADAS and software-defined vehicles is likely to have contributed to the segment’s top line, partly offset by weakness in the Chinese automotive market and lower European vehicle exports.

The consensus mark for Intelligent Systems revenues is pegged at $1.45 billion, indicating a marginal year-over-year increase. Adjusted operating income is expected to decline 15.5% to $138.6 million. Higher commodity prices, especially resins and metals, have increased input costs following the ongoing conflict in the Middle East. Delays in customer vehicle launches and slower-than-expected production ramps are also likely to defer revenue recognition and affect operating performance.

The consensus estimate for earnings is pegged at $1.33 per share, indicating a year-over-year decline of 38.7%. We expect collectively decreasing operating income to have negatively impacted the bottom line in the quarter.

What Our Model Says About APTVOur proven model does not conclusively predict an earnings beat for Aptiv this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Aptiv has an Earnings ESP of +2.23% and a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to ConsiderHere are a few stocks from the broader Business Services sector, which, according to our model, have the right combination of elements to beat on earnings this season.

Mastercard Incorporated (MA - Free Report) has an Earnings ESP of +0.11% and a Zacks Rank of 2. The company is scheduled to report its third-quarter 2026 results on Oct. 29.

The Zacks Consensus Estimate for MA’s third-quarter 2026 revenues is pegged at $9.63 billion, indicating year-over-year growth of 12%. For earnings, the consensus mark is pegged at $5.14 per share, implying a 17.4% increase from the year-ago quarter’s actual.

Mastercard beat the consensus estimate in each of the trailing four quarters, with the average earnings surprise being 6.3%.

Dave Inc. (DAVE - Free Report) has an Earnings ESP of +5.99% and a Zacks Rank of 2. The company is scheduled to declare its third-quarter 2026 results on Nov. 4.

The Zacks Consensus Estimate for DAVE’s third-quarter 2026 revenues is pegged at $191.15 million, indicating 26.8% year-over-year growth. The consensus estimate for earnings is pegged at $4.45 per share, implying a year-over-year increase of 5%.

DAVE beat the consensus estimate in each of the trailing four quarters, delivering an earnings surprise of 32.4% on average.

After a spectacular surge in value, Oklo (OKLO -2.63%) stock has had a meltdown of its own. That's not an exaggeration: The stock has lost about 80% of its value since last October. As it turns out, the half-life of Wall Street's enthusiasm ("nuclear renaissance!") was pretty short.

Wall Street has cooled on artificial intelligence stocks, and it has grown especially wary of speculative stocks like Oklo. For its part, Oklo, which once carried a $30 billion market value at its peak and remains at roughly $5 billion even after its drop, trades at a hefty price relative to the little revenue it generated last quarter (about $1.2 million).

All that leaves plenty of room for the stock to fall further if investors continue losing patience. Oklo likely won't regain investor confidence until it's selling nuclear power. And that likely won't happen until it overcomes a few major hurdles.

Image source: Oklo.

What needs to happen before Oklo generates revenue For starters, Oklo is designing a small nuclear reactor, which it calls an Aurora powerhouse. These powerhouses will be assembled in factories -- potentially cutting costs and time to deployment -- and deployed to industrial sites and data centers to generate power on-site. These reactors, in turn, could help fill a gap in power generation, which is expected to widen as electricity demand outpaces utilities' ability to keep up.

$26.61-$0.72 (-2.63%)

NYSE · As of 1:00 PM ET 10/28/26

Oklo has interested customers lined up, but it doesn't have a certified reactor. This is the first major hurdle: Oklo needs regulatory approval before it can commercialize its Aurora powerhouse. Although it is working through the process -- and has made impressive progress this year -- it does not have permission to switch on reactors and start selling power.

The company doesn't have a firm date for when it will turn on its first powerhouse. In the meantime, annual revenue will likely be insignificant, as the chart below illustrates.

OKLO Revenue (TTM) data by YCharts

We could stop at regulation, but let's go a step further -- for Oklo to generate significant revenue, it also has to build the powerhouse. Indeed, building a nuclear power plant isn't like rolling out a new running shoe. Nuclear power is notoriously expensive, and even if Oklo's reactors are small, high construction costs could force it to charge electricity prices that customers aren't willing to pay. That could turn away potential buyers, especially if cheaper solutions are available at that time.

Until it deploys its first reactor, Oklo's revenue will likely be small. Add to that the fact that Oklo will likely move at the pace of nuclear energy, which is to say slow, sometimes frustratingly slow, and this stock could struggle to regain its footing. If that pace doesn't agree with your time horizon, investing in Oklo might not be right for you.

5 Dividend Kings to Buy in July with Irresistible Value and YieldSmurfit Westrock NYSE: SW reported third-quarter adjusted EBITDA of $1.205 billion and an adjusted EBITDA margin of 14.8%, as higher energy and freight expenses weighed on results. Chief Executive Officer Tony Smurfit said the company faced “unprecedented and greater-than-anticipated cost inflation,” with energy and freight costs expected to create an approximately $700 million year-over-year headwind in 2026.

The company now expects full-year 2026 adjusted EBITDA of approximately $4.7 billion. Management said the revised outlook primarily reflects higher-than-expected cost inflation rather than a change in the company’s longer-term operating plan.

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3 Dividend Kings With Income, Stability, and a Possible CatalystSmurfit spoke from the company’s Três Barras kraftliner mill in Brazil, which has annual capacity of about 700,000 tons. He said the operation reflects approximately $350 million of investment over the past five years and is integrated with the company’s Latin American box system and forestry operations.

Pricing Actions Target Higher Costs Smurfit Westrock has implemented price increases across most paper grades in response to rising costs, though management said the increases move through the business with normal timing lags. Chief Financial Officer Ken Bowles said North American pricing increased about 5% sequentially from the second to the third quarter, while European pricing rose about 2% over the same period.

Father's Day Investing: 3 Stocks Built for Long-Term ReturnsIn North America, the company said price increases in paper are progressively being passed through to corrugated-box customers. Smurfit said converting margins have temporarily declined as the company transfers paper into its converting operations at market prices before recovering those higher costs from customers. He said the underlying trend in corrugated margins remains positive and should become more evident during the first and second quarters of 2027.

Management characterized much of the pricing achieved this year as cost recovery. Smurfit said the first $100 per ton of industry price increases was largely used to offset inflation, while more recent increases could contribute more meaningfully to margin expansion if costs stabilize.

Bowles said the company expects to recover the full costs associated with its latest price increase during the first quarter of 2027. He said the timing of recovery differs somewhat by region, with North America generally moving more quickly because of its index-based pricing arrangements, though the overall pattern is similar across North America, Europe and Latin America.

North America Volumes Improve, Though Demand Remains Uneven Smurfit said North American corrugated volumes improved sequentially during the third quarter, although volumes were affected by an agricultural-sector contamination issue involving Cyclospora and E. coli that hurt activity in the United States and Mexico. The company also cited extreme heat waves in Europe and earthquakes in Colombia among the one-time events affecting the quarter.

For October, Smurfit said North American volumes were roughly in line with the prior year and that November order books appeared “reasonably good.” He said the company expects fourth-quarter volumes to be near prior-year levels unless market conditions deteriorate unexpectedly.

The company’s North American mill system is sold out across nearly all grades, according to Smurfit, allowing management to prioritize orders and improve product mix. Bowles noted that the positive volume effect shown in the company’s North American earnings bridge reflected growth in third-party paper sales rather than corrugated-box volumes.

Smurfit said the company has improved customer-service metrics, talent retention and commercial execution under its owner-operator model. He added that the company has reduced the number of loss-making customers to fewer than 30 and is seeing customer wins, although replacing large lost accounts requires numerous smaller gains.

In consumer packaging, Smurfit said coated unbleached kraft, or CUK, markets have remained stable, while solid bleached sulfate, or SBS, pricing is being pursued after prices had fallen by about $100 previously. The company is sold out in SBS grades, he said. By contrast, management said it does not see substantial pricing momentum in recycled paperboard grades.

European Energy Costs Drive Industry Pressure Europe remains the company’s most acute energy-cost challenge. Smurfit said European natural gas prices were roughly 10 times North American levels, citing a price near $30 per million British thermal units in Europe compared with about $3 in the United States.

He said higher energy expenses have made paper price increases necessary and warned that continued elevated costs could lead to further downtime, price actions or mill closures across the European industry. Smurfit said some producers are taking downtime because selling at previous pricing levels can be unprofitable.

Bowles said the company has maintained some energy hedges but is not hedging at the levels it normally would because current prices are unusually high. He said the company has added smaller hedges selectively when prices appeared attractive. For North America, Bowles estimated that a $1 increase in diesel prices has a direct annual impact of about $80 million, rising to roughly $120 million to $130 million when downstream effects are included.

Management said it was less concerned about recently added European containerboard capacity because the new mills are operated by established industry participants with broader systems to manage. Bowles said producers may be more likely to take downtime than reduce prices to fill new capacity.

Latin America Investment and Long-Term Plan Remain Intact In Latin America, Smurfit Westrock said returns and adjusted EBITDA margins remain at strong levels despite regional challenges. During the quarter, the company agreed to acquire packaging assets from CMPC, a deal Smurfit said would strengthen its position in Chile and elsewhere in the region while adding paper integration.

The company also started operations at a roughly $100 million biomass boiler investment in Colombia, which management said is helping mitigate higher local energy costs. Smurfit said paper prices are rising in Latin America as international shortages affect the market, though demand in Brazil weakened over recent months amid election-related uncertainty.

Bowles said the company’s 2030 targets remain unchanged. He described the lower 2026 EBITDA outlook as a timing issue, noting that the longer-term plan is based largely on internal operational actions, efficiency improvements, reducing unprofitable contracts and improving North American volumes rather than relying on pricing.

Smurfit said the company delayed several capital projects by a matter of months, reducing 2026 capital expenditure guidance by about $150 million, but said no necessary projects had been canceled. He said the company remains confident that its actions, including cost reductions, investments, customer-service improvements and price recovery efforts, position it for stronger results in 2027.

About Smurfit Westrock (NYSE:SW)Smurfit Westrock plc NYSE: SW is a global provider of sustainable paper and packaging solutions. The company produces containerboard, corrugated packaging, folding cartons, paper bags, displays and other packaging products designed for consumer, retail, industrial and e-commerce applications. It also provides packaging design, supply-chain support and recycling services.

Smurfit Westrock was formed in July 2024 through the combination of Smurfit Kappa Group and WestRock. The transaction brought together two established packaging businesses with roots in Europe and North America.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Smurfit Westrock Plc (SW) Q3 2026 Earnings Call October 28, 2026 7:30 AM EDT

Company Participants

Ciaran Potts - Head of Investor Relations
Anthony P. J. Smurfit - President, Group CEO & Director
Ken Bowles - Executive VP, Group CFO & Executive Director

Conference Call Participants

George Staphos - BofA Securities, Research Division
Hillary Cacanando - Deutsche Bank AG, Research Division
Michael Roxland - Truist Securities, Inc., Research Division
Mark Weintraub - Seaport Research Partners
Anthony Pettinari - Citigroup Inc., Research Division
Andrew Jones - UBS Investment Bank, Research Division
Detlef Winckelmann - JPMorgan Chase & Co, Research Division
Lewis Roxburgh - Goodbody Stockbrokers UC, Research Division
Philip Ng - Jefferies LLC, Research Division
Pallav Mittal - Barclays Bank PLC, Research Division

Presentation

Operator

Good day, and thank you for standing by. Welcome to the Smurfit Westrock's 2026 Q3 Results Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Ciaran Potts, Smurfit Westrock Group VP, Investor Relations. Please go ahead.

Ciaran Potts
Head of Investor Relations

Thank you, Sarah. As a reminder, statements in today's press release and presentation and the comments made by management during this call may be considered forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from our expectations and projections.

These risks and uncertainties include, but are not limited to, the factors identified in the earnings release and in our SEC filings. The company undertakes no obligation to revise any forward-looking statements. Today's remarks also refer to certain non-GAAP financial measures, where applicable. Reconciliations to the most comparable GAAP measures are included in today's earnings release and in the appendix to the accompanying presentation, which are available at investors.smurfitwestrock.com.

Before I hand you over, please note that Tony and

CoreWeave reached $5 billion in annual revenue faster than any cloud company before it, but its interest expense is growing faster than its operating income. What happens in the next two quarters will determine whether the neocloud model survives its…

CoreWeave (NASDAQ:CRWV) trades at $59.57. Whether it can keep up with payments on a fast-growing debt load has become the key question for the whole neocloud model.

CoreWeave rents GPU capacity to AI labs and enterprises. It became the fastest cloud to reach $5B in annual revenue, and it paid for that growth mostly with borrowed money. Total debt reached $51.6 billion last quarter, and capital lease obligations added another $16.54 billion. The stock fell 31.99% over the past month. During that decline, traders known from The Big Short explained their short position, Bloomberg described the rout as a warning for the broader market, and Elon Musk said more than 200 neoclouds face “guppy-level death” (per Business Insider, Bloomberg and CNBC).

A $104 Billion Backlog Backs Every Loan Revenue backlog stood at $104.2 billion, up 246% year over year. That figure leaves out more than $25 billion in commitments added early in Q3. Operating cash flow came in at $679M, a swing from -$251M a year earlier, and adjusted EBITDA reached $1.5 billion at a 59% margin.

Pricing power is growing too. In July CoreWeave raised prices by roughly 25% across SKUs. Its weighted average cost of debt fell almost 300 basis points over the past year, which management values at about $1.1 billion of annualized interest savings. The company says each cluster ends up “fully repaying asset-level debt used to fund the CapEx while generating significant additional free cash flow.”

Interest Expense Is Outrunning Operating Income Quarterly interest expense rose from $267M to $536M and then to $640M. Q3 guidance calls for $860 million to $940 million. Against that, Q2 operating income was -$49M, which leaves an interest coverage ratio of -0.037.

Free cash flow was -$5.74B, so the company leaned on $10.07B of financing to cover the gap. Debt-to-equity is 8.94 and net debt to EBITDA is 10.75. Full-year capex guidance of $35 billion to $39 billion means CoreWeave needs credit markets to stay open.

Q3 Results Will Show Whether Margins Can Keep Pace Management guides Q3 adjusted operating income to $200 million to $260 million and expects adjusted operating margins to reach the low teens in Q4. More than 50% of the backlog is already tied to contracts where delivery has started. Management expects that share to pass two-thirds by year end. If both happen, operating profit could start catching up with interest costs. The two lines still sit far apart today.

Analysts See 126% Upside as the Stock Trails the S&P 500 The $134.50 consensus target means about 125.8% upside from the current price. Price targets are one input, and they carry no guarantee. Among 42 analysts:

Strong Buy: 8 Buy: 23 Hold: 8 Sell: 2 Strong Sell: 1 CoreWeave is down 16.81% year to date, while the S&P 500 is up 12.87%. Over one year the stock has fallen 56.22% as the index gained 12.33%. Shares trade at about 19x EV/EBITDA, and the price sits well below the $91.89 200-day average.

Operating Profit Must Catch Up With Interest Before the Outlook Clears At $59.57, CoreWeave’s outlook depends on operating income and interest expense.

The outlook would strengthen if CoreWeave hits its Q3 revenue guidance of $3.45 billion to $3.6 billion, keeps interest expense inside its range, and keeps raising debt at falling rates. The outlook would weaken if interest exceeds guidance, financing costs rise, or margins remain stuck below the low teens.

A clean quarter could narrow the gap between operating income and interest expense, while a credit scare would weigh more heavily with operating income still negative. Each quarter, compare adjusted operating income with interest expense.

The backlog shows the demand is real, and the next two earnings reports should reveal if CoreWeave can afford to serve it. The same AI expansion funding this debt load is lifting a different set of suppliers in power, cooling, and networking, which we profiled in a free report on seven AI infrastructure names that aren’t chipmakers.

Contact [email protected] for any questions or corrections.

Key Takeaways SMTC's data center revenues rose 91% year over year to $100 million in fiscal Q2 2027.SMTC expects 1.6T products to exceed 50% of Q3 data center revenue as optical demand accelerates.NVTS faces revenue volatility from its strategy shift and trades at 33.57X sales versus SMTC's 6.81X. Navitas Semiconductor (NVTS - Free Report) and Semtech Corporation (SMTC - Free Report) are semiconductor companies developing technologies that support next-generation electronics and connectivity. NVTS specializes in gallium nitride (GaN) and silicon carbide (SiC) power semiconductors for applications such as AI data centers, fast charging and energy systems. Semtech focuses on analog and mixed-signal semiconductors, high-speed connectivity and IoT technologies.

Both NVTS and SMTC are well-positioned to benefit from long-term growth in data centers and advanced technology infrastructure. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.

The Case for Navitas Semiconductor StockNavitas Semiconductor is positioning itself to benefit from the growing power needs of AI data centers. The company is focusing on high-power applications using its GaN and SiC technologies. In the second quarter of 2026, total revenues increased 22% sequentially, while high-power markets grew more than 50% year over year. NVTS expects AI infrastructure to account for more than one-third of its total sales by the end of 2026.

The transition to 800V is expected to create several growth opportunities for NVTS. The company sees the first stage already taking place, with higher-power AC/DC power supplies increasingly using SiC as data center racks demand greater power and density. The next stage is the adoption of 800V through power sidecar racks, which is expected to ramp in 2027. Later stages could bring 800V directly to GPU and XPU trays, increasing the use of GaN for high-frequency DC/DC conversion. NVTS expects these developments to happen in steps across multiple platforms and customers rather than through a single rollout.

NVTS is already working with hyperscalers, data centers, OEMs and ODMs on programs that are expected to ramp in the second half of 2026 and accelerate in 2027. The company is also seeing traction in DC/DC power supplies and battery backup units, where both GaN and SiC are being designed in. This is supporting strong growth in NVTS’ AI infrastructure revenues, which have increased more than 50% sequentially in both the first and second quarters of 2026, with growth expected to accelerate as more programs move toward production.

However, NVTS’ “Navitas 2.0” strategy involves moving away from mobile charging and consumer electronics toward higher-power AI and industrial markets. While this may improve long-term growth, it also introduces meaningful near-term revenue volatility. The company is effectively walking away from markets where it already had product traction and revenue history in exchange for newer markets with longer design cycles and more demanding qualification requirements. This transition could create revenue volatility over the next several quarters.

The Case for Semtech StockSemtech is seeing strong demand for its data center products as hyperscalers increase spending on AI infrastructure. The company’s data center revenues reached a record $100 million in the second quarter of fiscal 2027, up 39% sequentially and 91% year over year. Growth was driven by continued strength in 800G products, along with the ramp of 1.6T CopperEdge and FiberEdge solutions. Management expects this momentum to continue, with data center revenues projected to increase 45% sequentially and 160% year over year in the third quarter of fiscal 2027.

The 1.6T transition could become an important growth driver for Semtech. Management expects 1.6T FiberEdge and CopperEdge products to account for more than 50% of total data center revenues in the third quarter of fiscal 2027. Semtech is also gaining market share in optical connectivity, where its FiberEdge business has grown from about 18% market share in 800G two years ago to more than 50%. Further, the company expects its 1.6T FiberEdge market share to exceed 50% by the end of fiscal 2027.

The company is also preparing for the next stage of data center growth. Semtech is expanding its photonics portfolio through gain chips, high-power CW lasers, semiconductor optical amplifiers and photodiodes. These products are aimed at higher-speed applications, including 3.2T transceivers and co-packaged optics. Management expects its content per transceiver to increase from high single-digit dollars to high double-digit dollars as data center speeds move from 800G to 3.2T.

Strong customer demand supports SMTC’s prospects as well, with the company reporting that its backlog for the remainder of fiscal 2027 was fully booked and more than 70% of its target for fiscal 2028 was already covered. Management is also working with manufacturing partners to secure additional capacity for fiscal 2028 and beyond. If it can meet customer requirements and maintain its product momentum, the 1.6T ramp could remain an important driver of Semtech’s data center growth over the next several quarters.

NVTS vs. SMTC: Earnings Estimate TrendThe earnings estimate revision trend for the two companies reflects that analysts are turning more bullish toward SMTC.

NVTS Earnings Estimate Revision Trend
Image Source: Zacks Investment Research

SMTC Earnings Estimate Revision Trend
Image Source: Zacks Investment Research

NVTS vs. SMTC: Price Performance and ValuationYear to date, shares of NVTS and SMTC have surged 30.4% and 95.9%, respectively.

NVTS Vs. SMTC: YTD Price Return Performance
Image Source: Zacks Investment Research

Currently, SMTC is trading at a forward sales multiple of 6.81X, significantly lower than NVTS’ forward sales multiple of 33.57X. SMTC’s reasonable valuation makes it more attractive for investors looking for value and stability.

NVTS vs. SMTC: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research

Conclusion: Buy SMTC, Hold NVTS Right NowNavitas Semiconductor and SMTC are both set to ride the long-term growth in AI and data center markets, but their current positions are very different. Currently, NVTS faces near-term risks from its decision to deprioritize its lower-margin mobile and consumer business, which could create revenue volatility in the upcoming quarters.

In contrast, Semtech is seeing strong demand for AI data center products, with the ramp-up of 1.6T solutions driving revenue growth and a strong backlog supporting future demand. Further, SMTC’s reasonable valuation offers some downside protection as well, making the stock an attractive buy.

Currently, SMTC sports a Zacks Rank #1 (Strong Buy), giving a clear edge over NVTS, which carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

For the quarter ended September 2026, Brinker International (EAT - Free Report) reported revenue of $1.48 billion, up 9.4% over the same period last year. EPS came in at $2.77, compared to $1.93 in the year-ago quarter.

The reported revenue compares to the Zacks Consensus Estimate of $1.45 billion, representing a surprise of +1.97%. The company delivered an EPS surprise of +11.25%, with the consensus EPS estimate being $2.49.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

Here is how Brinker International performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Comparable Restaurant Sales - Chili's - YoY change: 10.1% versus the five-analyst average estimate of 8.1%.Company owned restaurants - Maggiano's - Domestic locations: 48 versus the four-analyst average estimate of 49.Comparable Restaurant Sales - Maggiano's - YoY change: -3.4% versus -0% estimated by four analysts on average.Company owned restaurants - Chili's: 1,126 versus the four-analyst average estimate of 1,124.Company owned restaurants - Total: 1,174 versus 1,173 estimated by four analysts on average.Revenue- Company sales: $1.46 billion versus $1.44 billion estimated by six analysts on average. Compared to the year-ago quarter, this number represents a +9.4% change.Revenue- Franchise and other revenues: $14.4 million compared to the $14.23 million average estimate based on six analysts. The reported number represents a change of +4.4% year over year.Revenue- Company sales- Chili's: $1.37 billion compared to the $1.34 billion average estimate based on four analysts. The reported number represents a change of +10.5% year over year.Revenue- Company sales- Maggiano's: $94.7 million versus the three-analyst average estimate of $99.4 million. The reported number represents a year-over-year change of -4.5%.Revenue- Franchise revenues- Chili?s: $14.2 million compared to the $14.37 million average estimate based on two analysts. The reported number represents a change of +5.2% year over year.Revenue- Chili's: $1.38 billion compared to the $1.35 billion average estimate based on two analysts. The reported number represents a change of +10.5% year over year.Revenue- Maggiano's: $94.9 million versus $99.58 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -4.6% change.View all Key Company Metrics for Brinker International here>>>

Shares of Brinker International have returned -1.2% over the past month versus the Zacks S&P 500 composite's -0.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

An abnormal order worth over $170 million has been detected on Hyperliquid’s crude oil perpetual contract, with suspected spoofing.

Bloomberg — Market monitoring firm Solidus Labs found that during the sharp volatility of international oil prices from March 8 to 10 amid the Iran conflict, a trader used two accounts on Hyperliquid to place abnormal orders worth over $170 million, suspected of manipulating crude oil perpetual contract prices via spoofing. The trader repeatedly placed and canceled large orders on one side of the order book while executing trades on the opposite side, with the ratio of canceled order value to executed opposite trades standing at around 30:1, generating roughly $119,000 in profit over the three days. In a March 9 transaction, the trader canceled approximately $17 million in sell orders in a short period while executing about $425,000 in buy orders. The activity was concentrated mainly on Brent crude perpetual contracts, and also involved WTI crude oil and natural gas contracts. Solidus noted that the actions align with spoofing characteristics, but the manipulation intent has not yet been confirmed. Hyperliquid Labs responded that all order, cancellation and transaction records on the platform are publicly recorded on the blockchain, accessible for review by market participants and regulators.

7 minutes ago

Iran's Foreign Minister: Iran is discussing with mediators to implement the "7-Day Plan" in less than a week.

Iranian Foreign Minister Abbas Araghchi stated that the Iranian armed forces are fully prepared to defend the country at all times, but Iran remains open to the success of diplomatic efforts. Iran is in close, continuous communication with mediators to review relevant proposals, aiming to implement the "Seven-Day Plan" within less than a week.

7 minutes ago

Cerebras’ bearish view: Its wafer products have a lifespan of only two years.

Semiconductor research firm Culper today published analysis stating that Cerebras’ Wafer-Scale Engine (WSE) and its routing architecture are indeed fully capable of resolving yield issues, as the company has claimed. The key uncertainty is how long the wafer will function in real-world operation, the report points out. Cerebras’ design relies on a large number of redundant interconnects to address manufacturing defects, but all these BEOL (Back-End-of-Line) wiring significantly increases the effective area susceptible to TDDB (Time-Dependent Dielectric Breakdown), which may lead to greater long-term reliability risks. TDDB can cause short circuits, which are more hazardous than open circuits in this design. Dielectric layer thickness determines the probability of TDDB occurrence, and variations in this thickness may be spatially correlated across the wafer, meaning many interconnect failures are likely concentrated in specific regions. It remains unclear how Cerebras detects these short circuits and avoids faulty interconnects. In conclusion, the firm estimates CBRS wafers will fail after roughly 2 years of use, a product lifespan that is disruptive to the company’s overall business.

7 minutes ago

Y Combinator Publishes Crypto Startup Direction Report: Focuses on Stablecoins, Asset Tokenization, and AI Agents

In its October 2026 crypto industry startup outlook report, Y Combinator (YC) noted that over the past year, crypto sector applications have been dominated by institutions rather than consumers for the first time, with core drivers shifting from speculation to practical financial needs such as oil price risk hedging and cross-border corporate fund transfers. YC projects that assets including stablecoins, stocks, debt, commodities, and real estate property rights will undergo further tokenization; new asset classes such as startup equity and small-value securities under $10,000 will also be issued via blockchain, driving the expansion of financial services including trading, lending, and derivatives, while AI agents will become key participants in major financial activities. Over the next six months, YC’s key focus areas are blockchain-enabled financing for the AI industry, niche-market-focused new stablecoins (both U.S. dollar and non-U.S. denominated), stablecoin-based neo-banks, real-world asset tokenization, next-generation trading platforms and interfaces, and AI agent trading and related API infrastructure. YC believes blockchain technology and stablecoins could respectively pose a disruptive impact on traditional stock exchanges and banking systems.

7 minutes ago

Telegram's Sticker Function Exposes Zero-Click Vulnerability, Allowing Code Execution on iOS Without User Interaction

Researchers disclosed a zero-click vulnerability in Telegram’s sticker function at a security conference held in Tokyo, demonstrating that attackers can execute code on iOS devices without requiring any user interaction. However, Telegram has raised objections to the risk assessment of this vulnerability.

7 minutes ago

Wall Street expects flat earnings compared to the year-ago quarter on higher revenues when Cava Group (CAVA - Free Report) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on November 4. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus EstimateThis Mediterranean restaurant chain is expected to post quarterly earnings of $0.12 per share in its upcoming report, which represents no change from the year-ago quarter.

Revenues are expected to be $357.44 million, up 22.3% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 3.33% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Cava?For Cava, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -9.17%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination makes it difficult to conclusively predict that Cava will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Cava would post earnings of $0.18 per share when it actually produced earnings of $0.19, delivering a surprise of +5.56%.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Cava doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Shares of Sandisk (SNDK +5.38%) charged sharply higher on Wednesday, jumping as much as 6.4%. As of 12:27 p.m. ET, the stock was still up 5.9%.

The catalyst that sent the semiconductor specialist higher was a competitor's bullish financial report.

Image source: Getty Images.

Show me the moneyKorean memory chipmaker SK Hynix (SKHY +12.78%) -- one of Sandisk's key rivals in the artificial intelligence (AI) chip space -- reported the results of its fiscal 2026 third quarter, and the results wowed investors. It reported record revenue that surged 328% year over year and 32% quarter over quarter to 104.6 trillion South Korean Won (roughly $78.9 billion). Operating profits were equally robust, soaring 632% year over year and 38% sequentially to 83.3 trillion won (roughly $61.7 billion).

To give the results perspective, analysts' consensus estimates were for revenue of 98.34 trillion won and operating profit of about 76.7 trillion won, so the results cleared both bars with ease.

The headline, however, was management's commentary about supply and demand for AI memory chips. "Demand [is] expected to outpace supply through 2030." Recent predictions suggested that demand for memory chips would peak before 2028, so this outlook is bullish for the industry.

SNDK Sandisk$1,374.99+$70.15 (+5.38%)

NASDAQ · As of 12:53 PM ET 10/28/26

Sandisk is one of the Big Three computer memory manufacturers, so it will profit from the supply and demand imbalance for memory chips -- which are critical to the ongoing adoption of artificial intelligence (AI).

Despite stock price gains of more than 650% over the past year, Sandisk is selling for just 19 times earnings, a valuation that is all the more meaningful since the company continues to grow at a triple-digit rate. Moreover, SK Hynix's commentary suggests the ongoing AI-related demand will continue through the end of the decade, which will benefit Sandisk shareholders.

That's why Sandisk stock is still a buy.

Danny Vena, CPA has positions in Sandisk. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Mutsamudu, Comoros, October 28, 2026 – MEXC, a pioneer in 0-fee digital asset trading, and blockchain security, compliance, and regulatory assurance partner Hacken, have released the MEXC × Hacken AI Trading Safety Handbook, providing practical guidance on how users and platforms can use and deploy AI-assisted and automated trading tools more safely, from research and decision support through trade execution.

The handbook follows the recent MEXC AI Trading Report, which found strong interest in AI alongside clear demand for greater control. In MEXC’s 2026 survey, willingness to use automated trading rose from 55% to 71.8% when limits on funds, positions, leverage and losses were introduced.

As AI takes a more active role in trading, the handbook emphasizes that safety cannot rely on the AI model alone. AI-facilitated actions should be checked against separate permissions, financial limits and risk controls before execution. It covers risks including credential exposure, excessive permissions, manipulated data and unintended execution, while outlining practical safeguards for both users and platforms.

For users, the handbook sets out five safety checks: Ask, Verify, Limit, Control and Review. For platforms, it outlines five principles: Guard, Limit, Approve, Controls and Test. Together, they provide a practical framework for expanding the use of AI while keeping appropriate controls in place.

“AI can make trading more accessible and efficient, but greater capability should come with stronger safeguards,” said Vugar Usi Zade, CEO of MEXC. “At MEXC, we want users to benefit from innovation, while taking a measured approach to AI adoption. Our People First principle means giving users access to new capabilities without losing sight of control, transparency and risk.”

““AI agents will soon place more orders than people do. Trust in them should be earned the way smart contracts earned it: through independent controls, continuous red-teaming and evidence anyone can verify.”,” said Dyma Budorin, CEO and co-founder of Hacken. “This handbook is intended to raise awareness of those risks and provide practical support for both users and platforms. As adoption grows, platforms will need to test these safeguards continuously and strengthen them as new risks emerge.”

MEXC and Hacken hope the handbook can serve as a practical reference for users and platforms as AI becomes more deeply integrated into trading, helping raise risk awareness and support safer, more responsible adoption across the industry.

About MEXC

Founded in 2018, MEXC is a leading global multi-asset trading platform built as your 0-fee gateway to infinite opportunities. Serving users across 170+ markets, MEXC provides simple and efficient access to crypto, stocks, tokenized assets, derivatives, and a growing range of TradFi-linked opportunities through one account and one gateway.

With 0 trading fees, deep liquidity, broad asset coverage, and a high-performance trading experience, MEXC is designed for retail users who want to discover earlier, act faster, and trade with fewer barriers. As crypto and traditional finance continue to converge, MEXC is committed to making global opportunities more accessible, helping users trade freely and MEXCmize every opportunity.

MEXC Official Website｜ X ｜ Telegram ｜How to Sign Up on MEXC

About Hacken

Hacken is a security and assurance partner for financial institutions and the infrastructure they rely on: exchanges, ecosystems, custodians, banks, asset managers, and tokenization platforms. Hacken’s AI security work includes AI agent security audits and red-teaming of AI systems.

Founded in 2017, Hacken has 60+ engineers and more than 1,500 clients across industries, including the European Commission, ADGM, Ethereum Foundation, Societe Generale-Forge, MetaMask, and Bybit.

Hacken website | X | LinkedIn

For media inquiries, please contact MEXC PR team: [email protected]

Wall Street expects a year-over-year decline in earnings on lower revenues when Centrus Energy Corp. (LEU - Free Report) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The earnings report, which is expected to be released on November 4, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus EstimateThis company is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of -73.7%.

Revenues are expected to be $55.16 million, down 26.4% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 1.18% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Centrus Energy?For Centrus Energy, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -877.78%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination makes it difficult to conclusively predict that Centrus Energy will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Centrus Energy would post earnings of $0.74 per share when it actually produced earnings of $0.77, delivering a surprise of +4.05%.

Over the last four quarters, the company has beaten consensus EPS estimates just once.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Centrus Energy doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Artificial intelligence (AI) stocks sold off last week on fresh worries about AI spending, with the Nasdaq Composite still up about 12% year-to-date. That left Ciena (CIEN +2.71%), a supplier of optical networking, and Astera Labs (ALAB +2.48%), a leader in AI connectivity, trading well below their 52-week highs.

However, demand for their products continues to climb, with Ciena projecting that its addressable market will roughly double by 2029. Here's why both stocks are positioned to be long-term winners for patient investors.

Image source: Getty Images.

1. Ciena
Ciena builds high-speed networking equipment to move data. Even with the stock down 70% from its recent high, demand for more compute capacity is driving strong financial results for the company.

Revenue rose 37% year over year to $1.7 billion in the fiscal third quarter ended Aug. 1. Ciena also had $8.5 billion in orders waiting to be filled, and management expects that backlog to top $10 billion by the end of its fiscal year.

AI data centers need to move enormous amounts of data, creating high-growth opportunities in the data center market. Growing demand for networking infrastructure is expected to drive a sharp trajectory in revenue growth, as Ciena expects its addressable market to roughly double to $52 billion by 2029.

Ciena is the leader in photonics, the technology that carries light signals over fiber networks. Using estimates from Dell'Oro Group, Ciena says it has earned about 4.5 times as much revenue from photonics as its nearest competitor since 2022. Over the same stretch, its market share rose from 45% to 70%.

CIEN Ciena$360.67+$9.52 (+2.71%)

NYSE · As of 12:51 PM ET 10/28/26

The stock trades at a forward price-to-earnings (P/E) of 27, based on fiscal 2027 earnings estimates. That looks reasonable for a company that expects its revenue to more than double by 2029, and is seeing margins rise on top of it.

The consensus analyst estimate projects earnings to grow at an annualized rate of 73% in the coming years. A slowdown in AI spending would put that outlook at risk, but in the long term, the growing use of AI could drive a lot more investment in data centers. I believe Ciena will outperform the market over the next decade.

2. Astera Labs
Astera Labs designs chips that help the processors, memory, and other components inside AI servers transmit data at high speeds. Shares closed Oct. 22 at about 48% below their 52-week high amid fears that AI spending would hit chip stocks. But management expects its newest line of Scorpio switches, which direct traffic between AI processors, to become its largest product family in the third quarter -- one quarter ahead of schedule.

In the second quarter, revenue more than doubled, rising 104% year over year to $392 million. Management guided for third-quarter revenue of $540 million to $560 million, representing a sharp sequential increase of about 40% over Q2.

The best reason to own Astera stock over the next decade is its opportunity to generate more revenue per customer. It is selling more products and generating more revenue per AI processor its customers install in data centers. Management says new products could eventually command several thousand dollars per processor, which would further compound its revenue.

ALAB Astera Labs$293.80+$7.11 (+2.48%)

NASDAQ · As of 12:49 PM ET 10/28/26

That growth would also multiply its earnings power, given its high margins. Astera's adjusted operating margin was 39% in the second quarter, and analysts expect earnings to grow at an annualized rate of 53% over the next several years.

Assuming the company delivers on those expectations, investors could earn great returns from here, even with the stock's high forward P/E of 41. Competition from larger networking suppliers, such as Broadcom, poses a risk. Still, Astera built its switch chips specifically for AI, which gives it an edge. The company will remain a key supplier of AI connectivity solutions for data centers, paving the way for further growth over the next decade.

Key Takeaways Flex's Q2 adjusted EPS jumped 49.4% to $1.18, while revenues rose 24.8% to $8.49 billion, beating estimates.Solid AI demand drove CPI revenues to $2.51 billion, with operating income up 97% and margin reaching 10.7%.Flex raised its fiscal 2027 revenue outlook to $34.9-$35.9 billion and adjusted EPS guidance to $4.84-$5.16.
Flex Ltd. (FLEX - Free Report) reported second-quarter fiscal 2027 adjusted earnings of $1.18 per share, up 49.4% year over year. The figure beat the Zacks Consensus Estimate of $1.05 by 12.38%.

Revenues increased 24.8% year over year to $8.49 billion, surpassing the consensus mark of $8.18 billion by 3.85%. Strong AI-related demand across Cloud and Power Infrastructure (CPI), along with growth in high-value markets, supported the results. Adjusted operating margin expanded 110 basis points (bps) to 7.1%.

Shares of the company gained around 8% in the pre-market trading session today. In the past year, the stock has rallied 26.1% compared with the Zacks Electronics - Miscellaneous Products industry’s growth of 9.9%.

Image Source: Zacks Investment Research

FLEX Gains From Broad-Based Segment GrowthRegulated Manufacturing Solutions (RMS) revenues increased 9% year over year to $2.68 billion. Growth was supported by high-value markets, particularly Industrial, where energy infrastructure and robotics remained important demand drivers.

Integrated Technology Solutions (ITS) revenues climbed 22% to $3.31 billion. Communications benefited from strong AI-related demand for advanced networking infrastructure, while consumer-related Lifestyle markets experienced softness.

Cloud and Power Infrastructure revenues surged to $2.51 billion from $1.63 billion a year earlier. Growth across Power and Cloud & Cooling reflected continued data center investment and robust demand for critical infrastructure solutions.

Flex Sees Strong Profit Growth Across SegmentsCPI-adjusted operating income jumped 97% year over year to $268 million. The segment's adjusted operating margin expanded 240 bps to 10.7%, reflecting favorable business mix and operating execution.

RMS adjusted operating income increased 19% to $172 million, with margin improving 50 bps to 6.4%. ITS adjusted operating income rose 26% to $181 million, while margin expanded 20 bps to 5.5%.

Corporate and Other expenses were $14 million compared with $15 million in the year-ago quarter. The improvements across all three operating segments supported consolidated profitability.

FLEX Expands Margins Despite Higher ExpensesAdjusted gross profit increased 33% year over year to $842 million. Adjusted gross margin expanded 60 bps to 9.9%, benefiting from productivity improvements and favorable business mix.

Adjusted operating income climbed 48% to $607 million from $409 million. GAAP operating income increased to $414 million from $296 million, while GAAP operating margin improved to 4.9% from 4.4%.

GAAP selling, general and administrative expenses rose to $371 million from $260 million. Legal and other adjustments totaled $110 million, including approximately $91 million related primarily to the planned CPI spin-off and $19 million in acquisition costs.

Flex Generates Solid Operating Cash FlowCash provided by operating activities increased to $501 million from $453 million in the year-ago quarter. Changes in working capital and other items contributed $82 million compared with $98 million previously.

Net capital expenditures totaled $240 million, leaving free cash flow of $261 million, down from $305 million a year earlier. Free cash flow included a $61 million negative impact from separation costs associated with the CPI spin-off.

FLEX's Balance Sheet Reflects ExpansionCash and cash equivalents reached $3.08 billion as of Sept. 25, 2026, compared with $2.39 billion at fiscal 2026-end. Long-term debt increased to $5.21 billion from $3.75 billion over the same period.

Total assets rose to $27.38 billion from $22.06 billion. Inventories increased to $7.32 billion from $5.85 billion, while accounts receivable climbed to $5.78 billion from $4.68 billion.

Flex Issues Upbeat Q3 GuidanceFor the third quarter of fiscal 2027, Flex expects revenues between $8.87 billion and $9.17 billion. Adjusted operating income is projected at $685-$715 million, with adjusted earnings of $1.19-$1.25 per share.

Management expects CPI revenues to grow 105-115% year over year. RMS revenues are projected to increase in the low-single to mid-single digits, while ITS revenues are expected to grow in the mid-single to high-single digits.

FLEX Raises Fiscal 2027 OutlookFlex raised its fiscal 2027 revenue guidance to $34.9-$35.9 billion from $33.7-$35.2 billion. The adjusted operating margin outlook was increased to 7.6-7.8% from 7-7.2%.

Adjusted earnings guidance was raised to $4.84-$5.16 per share from $4.42-$4.74. Management expects CPI revenues to increase 75-85%, while RMS and ITS combined revenues are projected to grow 8-11%.

The updated outlook incorporates recent acquisitions, including EPC Power, which was completed on Oct. 14, 2026. Management continues to target a tax-free spin-off of CPI, operating under the Axiom name, during the first quarter of calendar 2027.

FLEX’s Zacks RankFlex currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent PerformancesProgress Software Corporation (PRGS - Free Report) reported third-quarter fiscal 2026 results wherein revenues came in at $246 million, down 2% year over year and on a constant currency (cc) basis. ARR of $873 million inched up 1% year over year on a cc basis. Progress Software Corporation reported a 13% year-over-year increase in non-GAAP earnings per share, which stood at $1.69.

Shares of Progress Software Corporation have increased 6.4% in the past year.

Synopsys, Inc (SNPS - Free Report) reported third-quarter fiscal 2026 non-GAAP earnings of $3.91 per share, which increased 15.3% year over year and beat the Zacks Consensus Estimate by 6.5%. Broad-based strength, led by EDA and Ansys, supported the earnings outperformance.

Revenues for Synopsys rose 42.4% year over year to $2.48 billion, topping the consensus mark by 1.7%. Backlog remained strong at $10.9 billion, while Design IP returned to year-over-year growth.

Shares of Synopsys have gained 4.2% in the past year.

Oracle (ORCL - Free Report) reported first-quarter fiscal 2027 non-GAAP earnings of $1.92 per share, which beat the Zacks Consensus Estimate by 10.3% and increased 30% in dollar terms and 30% in cc on a year-over-year basis.

Total quarterly revenues increased 30% year over year to $19.3 billion, which beat the consensus mark by 1.11%, reflecting strong demand for Oracle's cloud infrastructure and applications suites, particularly from AI-focused enterprises.

Shares of Oracle have lost 52.6% in the past year.

The market expects PROCEPT BioRobotics Corporation (PRCT - Free Report) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended September 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The earnings report, which is expected to be released on November 4, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus EstimateThis company is expected to post quarterly loss of $0.39 per share in its upcoming report, which represents a year-over-year change of -2.6%.

Revenues are expected to be $100.07 million, up 20.1% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for PROCEPT BIOROBO?For PROCEPT BIOROBO, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +9.79%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination indicates that PROCEPT BIOROBO will most likely beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that PROCEPT BIOROBO would post a loss of$0.46 per share when it actually produced a loss of -$0.47, delivering a surprise of -2.17%.

Over the last four quarters, the company has beaten consensus EPS estimates just once.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

PROCEPT BIOROBO appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

SummaryCelestica delivered Q3 results that exceeded estimates, with revenue up 83% YoY and EPS rising 109%, driven by surging AI hardware demand.The Compute & Storage division, now 28% of revenue, grew 242% YoY, far surpassing its ambitious annual growth forecast and reinforcing CLS's AI data center positioning.Management raised 2026 and 2027 guidance: the 2027 revenue target increased from $35B to $40B and EPS to $21.50, signaling accelerating growth expectations.Despite a minor reduction in 2024 FCF guidance and a higher 2027 capex outlook, leverage remains low at 0.5x, supporting the bullish investment thesis. J Studios/DigitalVision via Getty Images

Celestica's (CLS) Q3 results on Monday once again beat all the estimates, the shares rose as much as 17% in after-hours trading, and I believe they confirm AI hardware demand in a context of uncertainty

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of CLS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Space Exploration Technologies (SPCX -2.52%) recently reported its Q3 2026 financial results, posting impressive gains in sales and earnings. The company's important Starlink business continued to grow, but the standout performance in the quarter came from SpaceX's artificial intelligence revenue.

Investors were pleased with the report and pushed the stock higher, but SpaceX's results still showed heavy capital expenditures, and this will likely remain high for a while yet.

While I understand why some investors jumped on the stock after the results were released, I still don't think SpaceX stock is a buy just yet. Here's why.

Image source: The Motley Fool.

SpaceX's rocketing third-quarter growth
There was a lot for SpaceX shareholders to be excited about in the third quarter, including a 161% year-over-year surge in sales to $14.6 billion. This impressive growth helped turn the tide for SpaceX's bottom line, with net income coming in at $4.4 billion for the quarter -- up from a loss of $1.1 billion in the year-ago quarter.

Here's how the breakdown of the company's sales panned out:

Starlink: Sales rose 69% to $5.2 billion, and subscribers rose 13% to 13.6 million
Space Launch: 12 customer launches totaling $1.8 billion, a 6% year-over-year increase
Artificial intelligence: A surprising 830% revenue jump to $7.6 billion

It's worth highlighting SpaceX's AI segment (what it calls Super Intelligence) sales growth for a moment because it accelerated quickly and surpassed Starlink as SpaceX's largest revenue driver, accounting for 52% of total sales.

SpaceX is spending a lot of money on building out its AI business (which includes its Grok chatbot and renting out computing capacity to customers). The company's capital expenditures (capex) rose 185% to $19.6 billion in the quarter -- and 83% of that spending went toward AI.

That's a hefty price tag for just one segment of the business, but SpaceX's AI sales growth in the quarter indicates its investments are starting to pay off. If this trajectory continues, it could be good news for investors, as AI spending will total $35 billion to $40 billion in 2026, according to SpaceX's management.

SPCX Space Exploration Technologies$144.84-$3.74 (-2.52%)

NASDAQ · As of 12:43 PM ET 10/28/26

Is it time to buy SpaceX stock?
Personally, I'm not buying SpaceX any time soon, but I understand why some investors may want to after SpaceX's third-quarter results. The company reversed its losses and posted a solid profit, and its AI business is accelerating quickly.

One of the things that makes me hesitate to buy SpaceX is that the company continues to spend heavily on AI infrastructure. One quarter of explosive AI sales is good. Still, the company needs its artificial intelligence revenue to keep increasing rapidly before the spending really looks like it's a good long-term bet.

What's more, investors are increasingly skeptical of excessive AI spending, and if future quarters don't show similar gains in AI sales, SpaceX shares could face a bumpy road ahead.

Rexford Industrial offers a compelling risk/reward in its preferred equity, with yields exceeding 7% and exceptional dividend coverage. REXR's preferred dividends require less than 2% of FFO, and the robust $7.2B equity base provides a substantial cushion for preferred shareholders. Series C preferred (REXR.PR.C) trades at a 7.08% yield, with low call risk and a potential 25% capital gain if redeemed at par.

Wall Street's consensus target sits below where Apple already trades, yet our model sees a very different number ahead of the November earnings report. Here is why the Street may have badly misjudged where this stock is going.

The 24/7 Wall St. price target for Apple (NASDAQ:AAPL | AAPL Price Prediction) is $399.46. That represents 15.63% upside from $345.43. Wall Street’s consensus target of $328.35 sits about 4.9% below the current price, and that gap is the story of this article.

Metric Value Current Price $345.43 Price Target from 24/7 Wall St. $399.46 Upside/Downside 15.63% Recommendation BUY Confidence Level 90% Our model rates Apple a buy with high confidence. The stock trades 1.8% below its 52-week high of $351.73.

The September-quarter report is expected November 2 after the close, a date Apple has not yet confirmed. In my view, the analyst consensus has fallen behind the earnings path.

Up 27% in 2026 and a Post-Earnings Drop That Didn’t Last Shares rose 0.57% over the past week and 2.5% over the past month. They are up 27.41% year to date and sit 42.3% above the 52-week low. Fiscal Q3 revenue grew 16.4% to $109.42 billion, and EPS of $2.02 exceeded the $1.89 consensus. The stock still fell 7.35% on earnings day, then gained 5.25% over the next 30 days.

The current story is about leadership and positioning. CNBC calls Apple an “anti-AI trade,” and the rally has tightened the race for world’s most valuable company. The iPhone Duo launch is also underway. That July call was Tim Cook’s last as CEO, and John Ternus was expected to lead future calls.

Why Bulls See $453 Within Reach Apple guided September-quarter iPhone growth to the mid-teens. Management also described supply constraints as a demand-forecast problem. Services hit a June-quarter record of $30.7 billion, and paid subscriptions passed one and a half billion.

Add Siri AI and a $100B buyback authorization, and our bull case reaches $453.63. Analysts lean positive, with 6 bullish ratings and 19 on the buy side.

Memory Costs Could Squeeze Margins Gross margin guidance of 47%-48% compares with 50.1% last quarter, and it includes about one percentage point of tariff refunds. Cook described memory pricing as a “100-year flood.”

Foreign exchange and App Store rulings weigh on Services, and 3 Sell and 3 Strong Sell ratings remain. Our bear case is $338.59. One offset: excluding the $0.11 tariff benefit, Q3 EPS of $1.91 still beat consensus.

How Apple Compares to Microsoft and Alphabet As a mega-cap platform peer that also competes in AI services, Microsoft (NASDAQ:MSFT) belongs here. Its revenue grew 17.75% at a P/E of 29, while Apple trades at 45. However, Microsoft’s free cash flow is weighed down by capex that rose 109.63%, and that drives its P/FCF above Apple’s.

Alphabet (NASDAQ:GOOGL) competes with Apple in mobile platforms and subscriptions. Its P/E of 14 is inflated by a $99 billion equity gain.

Company Trailing P/E P/FCF Apple 45 51 Microsoft 29 58 Alphabet 14 53 On free cash flow, Apple is the cheapest of the three. That makes our target look reasonable.

Our Model Says Buy Ahead of November 2 Our 24/7 Wall St. price target of $399.46 has a buy rating and 90% confidence. What tips the scale for me is iPhone demand running ahead of supply.

My case gets stronger if Siri AI drives upgrades and iCloud+ revenue. I’d grow cautious if memory costs push margins below guidance. My view: the Street is too low.

Here is where our model projects Apple at each year’s end, assuming current growth holds.

Year Price Target from 24/7 Wall St. 2026 $348.46 2027 $409.02 2028 $455.41 2029 $495.65 2030 $538.52 Apple would need to keep executing under its new leadership for these projections to hold. AI monetization or a prolonged memory-cost spike could move the result sharply in either direction.

Contact [email protected] for any questions or corrections.

A top House Democrat on Wednesday accused President Donald Trump of using tariffs as a "tool for grift and self-enrichment," pointing to what he says are suspicious import-tax exemptions for industries whose leaders have curried Trump's favor with gifts and donations.

"You took care to cut lots of sweetheart deals with corporations and industries that won carve-outs from your tariffs when you saw you could get something good in return," Rep. Jamie Raskin, D-Md., told Trump in a fiery letter obtained first by CNBC.

Raskin, the ranking member of the House Judiciary Committee and the former top Democrat on the House oversight committee, highlighted three such tariff carve-outs — for Brazilian meat, diamonds and smartphones — that he says "make little to no sense" under the criteria set by the Trump administration.

"They do, however, make sense when factoring in the now world famous Trump Tariff Discount," Raskin wrote, coining a term to describe the president's alleged willingness to cut breaks for his allies and benefactors "when the price is right."

The letter asks Trump to hand over multiple categories of records spanning his second term, including communications between the White House and the Office of the U.S. Trade Representative, or USTR, related to any form of tariff relief for more than a dozen industries.

It makes a similar request for communications involving private-sector representatives, including Apple executive chairman Tim Cook and Rolex CEO Jean-Frederic Dufour. Raskin asked for those records by Nov. 11.

Raskin's pugnacious letter directly accuses Trump of "profound corruption," asserting that his heavy-handed use of tariffs is really about clinching "levers of power that you could maliciously pull to extract exciting concessions for yourself."

The missive — which cites the Judiciary Committee's "jurisdiction over corruption, conflicts of interest, and effective enforcement of criminal and civil laws" — could offer a preview of how Democrats will flex their oversight powers against Trump should they win majority control of the House or Senate in the midterm election.

Raskin also drew a link between Trump's alleged misuse of tariffs and Americans' affordability concerns, connecting two of voters' top concerns in the final stretch of the election cycle.

"While you have protected your personal investments and crocodile skin connoisseurs from the giant bite of your tariffs, the American people are suffering. Independent analysts expect that your latest round of tariffs will cost an average of $820 per U.S. household this year," he wrote, citing data from the nonpartisan Tax Foundation.

The most recent CNBC All-America Economic Survey found voters are most concerned about government corruption, followed by high grocery and gas prices. Democratic candidates have deliberately tailored their campaign messaging to make connections between corruption and high costs.

The White House and the USTR did not immediately respond to CNBC's requests for comment on Raskin's letter.

Raskin homed in on the far-reaching tariffs the U.S. imposed in July using Section 301 of the Trade Act of 1974.

The Trump administration says those duties, which apply to more than 80 countries and cover nearly all U.S. imports, are meant to crack down on foreign forced-labor practices. But Raskin and other critics, including plaintiffs in a major lawsuit challenging the tariffs, argue they are actually intended to replace the sweeping "liberation day" duties the Supreme Court struck down in February.

"One could be forgiven for doubting the sincerity of your Administration's sudden concern for the victims of forced labor," Raskin wrote.

He pointed to Trump's decision last year to lift forced-labor-related restrictions on Dominican sugar producer Central Romana, despite allegations that the company's abusive practices persisted.

Central Romana's owner, José Francisco "Pepe" Fanjul, reportedly hosted a $50 million fundraiser for Trump in 2024, and his family corporation that year donated $1 million to a pro-Trump PAC. He has also been listed as a donor to Trump's White House ballroom project.

The USTR only offers exemptions to the Section 301 tariffs in certain cases, including where additional duties would not help reduce forced-labor practices. But the trade office's exemption list "contains conspicuous —and suspicious — carve-outs for a few industries," Raskin wrote.

Raskin referenced tariff exemptions for beef and bovine products, which took effect despite opposition from U.S. cattle producers who strongly opposed the move, citing "the well-documented use of forced labor in the Brazilian cattle sector and the documented surge of Brazilian beef."

In late August, Trump reportedly met in the Oval Office with Brazilian billionaire Joesley Batista, co-owner of JBS, the world's largest meat processor. The next day, Trump announced the U.S. would allow the import of up to 300,000 metric tons of "product for ground beef" below market prices.

"Coincidentally, JBS's U.S. subsidiary, Pilgrim's Pride, made a $5 million donation to your 2024 inaugural fund, the largest donation of any single company!" Raskin wrote.

Diamond jewelry is also exempt from the Section 301 tariffs, which Raskin called "laughably indefensible" because the precious stones are identified by the U.S. Labor Department as a good produced using forced or child labor.

Raskin suggested the exemption was the result of Belgium's Antwerp World Diamond Centre gifting Trump an opulent gold ring — studded with 321 natural diamonds and 75 other gemstones — in June. The company's press release about the ring said it was given to Trump as a symbol of "the historic trade relationship between Antwerp and the United States" and in honor of the 250th birthday of the U.S.

"A diamond is truly the President's best friend!" Raskin quipped in his letter.

He also wrote that USTR exempted Chinese smartphones from the Section 301 tariffs, even though "abusive working conditions are a hallmark of smartphone manufacturing, including the Apple iPhone."

He listed multiple examples of Cook's flattery toward Trump, including reportedly donating $1 million to Trump's inaugural committee in 2025 and gifting Trump a gold plaque in the Oval Office. Raskin also noted Apple's donation of $25 million to Trump's White House ballroom project, a tie for the largest contribution.

"The exemptions above only scratch the surface of your profound corruption," Raskin wrote.

Meta just dropped 17% in a month while simultaneously launching an AI agent that generated $200 average purchases for millions of new users. Here is why that tension points in only one direction.

I have bought shares of Meta Platforms (NASDAQ:META | META Price Prediction) again and again, and the latest drop gave me another reason to do it. The stock closed at $620.19 on October 27, down 17.49% over the past month. So I added more.

Why I Keep Coming Back to Meta Meta reaches 3.64 billion people every day, and advertisers keep paying more to reach them. In the third quarter, ad revenue came in at $63.06 billion, up 26%. Ad impressions grew 10%, and the average price per ad rose 14%. The pricing number matters most to me. It tells me AI keeps making Meta’s ads work better for the businesses that buy them.

Muse Is Already Making Sales Muse, the personal agent built on Meta’s first frontier model, picked up more than 10 million users in the U.S. and Canada in about one and a half months. About 25% of them use it on any given day. More than 25% use it to shop, with an average purchase of over $200. The CEO laid out the plan simply: “For most people, the product should be free, and we will build commerce tools so we get paid a fee based on the transactions that we help facilitate.” Management also expects to improve Muse’s compute cost efficiency by more than 10x in the next year.

Q3’s EPS Miss Came Down to a Legal Bill GAAP EPS of $3.83 fell short of the $5.70 consensus because of a $9.89 billion settlement charge. Without that charge, EPS would have been $7.40. Revenue of $64.60 billion beat estimates, and guidance for Q4 revenue is $73 billion to $76 billion. I pay about 23 times earnings for a 30.24% return on equity and 71.5x interest coverage.

Why My Money Skips Alphabet and Snap Alphabet (NASDAQ:GOOGL) looks cheaper at about 14 times earnings. But a $99.03 billion gain on equity securities padded its Q2 net income. Alphabet’s free cash flow multiple is 52.88, compared with 29.66 for Meta. Alphabet also suspended buybacks, and its long-term debt rose from $46.5 billion to $98.2 billion.

Snap (NYSE:SNAP) grew ad revenue just 9% in Q2, still runs a negative operating margin, and owes 2.06 in debt for every dollar of equity. Meta’s ratio is 0.386.

Risks That Could Hurt This Position Meta faces $18.59 billion in youth mental health litigation exposure, with more trials coming. Capex guidance of $135 billion to $145 billion turned Q3 free cash flow negative at -$2.12 billion. The infrastructure behind that spending has to be powered and cooled by somebody, which is the whole basis of a free report we put together on seven AI infrastructure suppliers that aren’t the chipmakers everyone already owns. The new nonvoting share class, which starts trading in late January 2027, gives Meta a way to raise capital, and that could reduce my stake.

I take those risks seriously. Still, Q3 operating cash flow reached $32.79 billion, up 9.29%, and 2025 free cash flow was $43.59 billion. Reality Labs losses should also narrow to about $15 billion in 2027. A business producing that much cash can carry a heavy spending cycle.

What Keeps Me Buying From Here Management expects strong revenue growth to continue through 2027, and Muse comes to Meta Glasses in November 2026. Over ten years the stock has gained 376.81%, and it got there through plenty of selloffs like this one. When Meta’s price drops but the business keeps getting stronger, I keep buying.

Contact [email protected] for any questions or corrections.

Key Takeaways Tesla shares gained 9.5% in two sessions amid a Barclays upgrade, SpaceX merger buzz and FSD expansion.Tesla delivered 486,532 vehicles in Q3 as FSD customers surged 67%, while auto margins improved to 18.5%.Tesla's Robotaxi and Optimus progress and positive cash flow offer promise, but high costs remain a concern. Electric vehicle (EV) and tech giant Tesla (TSLA - Free Report) has had a rough year in the markets, especially after a tough stretch of challenges that weighed on sentiment. Lately, though, the story seems to be turning. The stock gained 9.5% over the past two trading sessions. Two catalysts may explain the move.

Barclays upgraded Tesla to Overweight and raised its price target to $450 from $370, pointing to a possible SpaceX (SPCX - Free Report) merger. Separately, Latvia authorized Tesla’s Full Self-Driving (FSD) software, per Teslarati, making it the 10th EU country to do so.

But the rally does not seem just headline-driven. The third-quarter numbers gave investors real reasons for optimism.

Demand Outruns Supply as FSD Adoption ClimbsTesla delivered 486,532 vehicles in the last reported quarter, its second straight quarter above 480,000 units. It also posted its highest passenger vehicle order backlog in four years. Management said demand is running well ahead of production, helped by a broader product lineup and growing adoption of FSD.

Active paid FSD customers rose 67% year over year to 1.74 million. More than 75% of new North American deliveries included a paid FSD subscription at delivery. In Europe, regulatory approval has spread steadily since the Netherlands led in April, followed by Lithuania, Estonia, Denmark, Belgium, Slovenia, Czechia, Croatia and Slovakia. Latvia is the latest, with a software rollout to begin soon.

The product pipeline is widening too. The Semi has entered production, and the Roadster was revealed, with production targeted for 2028.

Margins Are ImprovingProfitability moved in the right direction. Automotive gross margin improved to 18.5% from 17% a year earlier. The energy business also did well. Storage deployments reached 13.7 GWh, up 10% year over year, and energy gross margin jumped to 33.1% from 20.4% in the second quarter of 2026. Demand looks set to continue. CEO Elon Musk said Megapack supply for 2027 is almost sold out.

The AI and Robotaxi Chapter Is Taking ShapeMusk has framed AI, autonomous vehicles, robotaxis and robotics as Tesla’s next growth chapters, and there is now visible progress. Tesla began deploying Cybercabs in Austin in September 2026. Cumulative unsupervised Robotaxi miles rose eightfold sequentially to nearly 2 million. Musk said the Austin Cybercab fleet has grown tenfold in roughly a month since launch.

Image Source: Tesla, Inc.

Management expects Robotaxi operations to contribute more meaningfully to revenues from next year. Customer-owned vehicles could start joining the fleet around the second quarter of 2027. Optimus has entered early production on a high-volume line in Fremont, though the ramp will be slow given it is an entirely new product.

Trimmed Capex & Balance Sheet StrengthCapital discipline was a key concern coming into the quarter, with heavy capex and negative free cash flow weighing on investors. Tesla addressed both. It ended the quarter with about $45.4 billion in cash and short-term investments. Free cash flow swung to positive $1.53 billion from negative $1.09 billion in the second quarter of 2026. Management also trimmed 2026 capex guidance to $20 billion from $25 billion and secured up to $30 billion in borrowing capacity, with no draws planned this year.

The SpaceX FactorThe SpaceX relationship adds another layer. Terafab, a joint project with SpaceX, aims to produce the advanced AI chips Tesla needs for Optimus and its wider AI ambitions. Securing compute is critical as Tesla expands beyond EVs, and a closer tie-up could give it access to capital, engineering talent and infrastructure that would take years to build alone.

A full merger is a different question. Both companies are pivoting toward AI, and consolidation promises meaningful synergies. But SpaceX would likely have to pay a substantial premium to win over Tesla shareholders. With a favorable regulatory climate expected in 2027, independent committees weighing fiduciary duties, and Tesla’s strong cash position and voting structure, a valuation bump looks almost necessary.

The Risks Haven’t Gone AwayNone of this makes Tesla a risk-free story. Operating expenses remain high, supply chain challenges persist, and operating profits are expected to decline year over year in the coming quarters as costs rise to fund the next growth cycle. Robotaxi and Optimus revenues still depend on execution and regulatory approvals.

Our Take: TSLA Stock Worth Holding NowThese risks are real, but they are the price of a business trying to change shape. The shift is genuine. Demand is strong, margins are recovering, cash flow has turned positive, and the AI roadmap now has tangible milestones behind it.

But the next few quarters will be heavy on spending and light on profit, and the Robotaxi and Optimus payoffs still depend on regulators and execution. This may not be the moment to buy TSLA stock outright, but we think that the stock should earn a place on your watchlist again.

If Robotaxi revenues start showing up next year as management expects, today’s skeptics may be late. For investors with a long horizon, dips from here look more like opportunities.

Tesla stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The iconic consumer beverage giant Coca-Cola (KO +0.66%) reported stronger-than-expected third-quarter earnings and raised its full-year guidance.

Yet the good news wasn't enough to win the market's approval, as the stock dropped roughly 1.6% on Oct. 27, the day it reported earnings. Adjusted earnings per share of $0.91 beat Wall Street consensus estimates by $0.03, while revenue of $13.4 billion beat estimates by about $480 million.

Meanwhile, management said it now expects at least 5% organic revenue growth this year, up from prior guidance of approximately 5%.

Management also expects at least 11% comparable earnings-per-share growth in 2026, up from prior guidance of 9%-10% growth. Finally, the company guided for at least $13 billion of free cash flow, up from prior guidance of $12.4 billion.

Is the stock a buy after its latest earnings report?

Image source: Getty Images.

Concerns about demand in North AmericaOne might think that a beat-and-raise quarter would move the stock higher, but a few factors seemed to prevent it.

Coca-Cola plans to refranchise, or sell its Coca-Cola Beverages Africa (CCBA) bottling franchise in the fourth quarter, which is expected to result in a 4% headwind to comparable net revenue in the quarter and an 8% headwind in 2027.

Additionally, North American unit case volume came in flat in the quarter, disappointing investors given the segment's stronger performance in the first half of the year.

Coca-Cola's CFO John Murphy said on the earnings call that the restaurant industry continues to experience pressure, largely due to consumer pressures that management expects to persist through the remainder of the year and into 2027.

"Overall, we expect consumer behavior to remain largely unchanged, with value being a very important consideration across all markets and income groups," Murphy said.

Management did, however, express optimism about North America, noting that volume would have grown had the July 4th holiday weekend not fallen in the second quarter.

Furthermore, management sees areas for improvement, including supply chain issues affecting several brands, such as Topo Chico and Sprite. North America experienced volume improvement sequentially each month in the quarter.

Is the stock a buy?Despite a lukewarm market reception, Wall Street analysts came away from the quarter feeling largely optimistic.

Wells Fargo analyst Chris Carey maintained an overweight rating on the stock and raised his price target by $10 per share to $100, specifically citing expanding margins and strong guidance.

Coca-Cola's main hurdle will be trying to top what has been a phenomenal year for the stock, which is up roughly 32.5%. Rotation out of high-flying sectors like artificial intelligence has benefited best-in-breed consumer staple stocks like Coca-Cola.

KO PE Ratio data by YCharts

Despite strong performance, Coca-Cola does not trade at a large premium to its average five-year trailing price-to-earnings ratio, so investors do not appear to have rewarded the stock with a premium valuation, at least compared to history.

Coca-Cola also offers a solid 2.3% trailing dividend yield and has increased its annual dividend for 64 years, a streak few others in the market have matched.

While the stock will likely remain range-bound in the near term, I still think it is a good long-term hold that will add diversity and protection to the standard portfolio.

Coca-Cola CEO Henrique Braun is just fine with young Americans calling their midday Diet Coke a “fridge cigarette,” a viral nickname for the popular drink.

Gen Zers use the moniker to compare the idea of stressed-out office workers stepping out for a smoke break to those who stop by the fridge for an afternoon soda, typically a Diet Coke – swapping out a nicotine addiction for caffeine. 

Asked for his thoughts on the “fridge cigarette” trend Braun stopped short of giving the nickname his full-fledged endorsement, but said, “The nickname, uh — consumers call it the way they want to call it.”

Coca-Cola CEO Henrique Braun (above) chimed in on the viral “fridge cigarette” moniker. Getty Images for The Coca Cola Company “The most important thing to us is that we don’t position Diet Coke in that way. What we do is that it’s a great-tasting product which connects to the consumer in a very unique way and that’s what really, Diet Coke, it’s all about,” the suit told Yahoo Finance on Tuesday.

“We follow the consumer and Diet Coke, it’s one of those brands that continue to recruit the next generation of consumers. The main recruiting, it’s really about the great flavor and the great brand equity that we have,” he added. 

The slang term for an afternoon soda craving originated in 2025 and was popularized on TikTok, according to Merriam-Webster.

Diet Coke is having a “resurgence,” Chief Financial Officer John Murphy told CNBC on Tuesday, helping boost Coca-Cola’s earnings. “It’s a brand that’s almost reinventing itself with the next generation of consumers.” 

In the third quarter, Braun – who took the helm at Coca-Cola in March – said both Diet Coke and Coca-Cola Zero, another sugarless offering, saw their volume grow by double digits in North America.

Though Coca-Cola reported overall flat volume in North America, its home market, the company would have seen growth if not for the timing of the Fourth of July holiday — which fell before the latest quarter — and a prolonged shortage of its Topo Chico sparkling water brand, according to Murphy. 

Coca-Cola reported strong earnings and hiked its annual forecast. Tom Eversley – stock.adobe.com Coca-Cola on Tuesday hiked its annual forecast for the third straight quarter. It now expects comparable earnings per share to grow at least 11%, up from a prior forecast of 9% to 10% growth. The company also predicted organic revenue growth of at least 5%, slightly improved from a previous forecast of roughly 5% growth. 

In the third quarter, it reported adjusted earnings per share of 91 cents, above expectations of 88 cents, and revenue of $13.4 billion, beating estimates of $12.92 billion. 

Braun told Yahoo Finance that the company is “really excited about the prospects of growth.” 

He previously served as Coca-Cola’s chief operating officer and president of international development. Braun started with the company nearly 30 years ago as an intern, or what Coca-Cola then referred to as a trainee.