Citi Bank logo appears in this illustration taken December 1, 2025. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab
SummaryCompaniesCitigroup shares fell despite a 45% rise in second-quarter net incomeCitigroup forecast higher expenses in the second half of the yearBank expects to spend more than the $800 million initially predicted to lay off employeesNEW YORK, July 15 (Reuters) - Analysts revised estimates for Citigroup on Wednesday after the bank's management surprised investors and forecast higher expenses in the second half of the year.
Despite beating analysts' estimates in the second quarter with a 45% rise in net income, Citigroup shares tanked 5.3% on Tuesday.
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"The culprit was a combination of high expectations and muddled messaging on the second half outlook during the earnings call," Bank of America analyst Ebrahim Poonawala said in a report to clients on Wednesday. Before the earnings call, Citi shares were up 2%.
The bank reported a return on tangible common equity of 13.1% in the first half of the year, but decided to stick with guidance of 10% to 11% return for the year. "This inspired half a dozen questions on the order of, 'You're saying the second half of 2026 will be dreadful?'" wrote Oppenheimer analyst Chris Kotowski in his Wednesday report, "The Problem with Giving Guidance."
CEO Jane Fraser and CFO Gonzalo Luchetti told analysts during the earnings call that the bank decided to pull forward some of the $5 billion in additional investments the bank projected as needed to increase market share during the investor day. The bank also expects to spend more than the $800 million initially predicted to lay off employees.
Responding to a question, Fraser said the investments would be for the "offense" and not catching up.
"This is not restructuring, but offensive moves to better gain share and compete in a more competitive environment, such as in credit cards," said Wells Fargo analyst Mike Mayo, who still expects the bank to exceed its 11% profitability target in 2026.
Kotowski said the outlook for higher expenses prevented raising estimates by more than he did.
Poonawala said the strategy is a "tactical blip" that does not change his target price or buy rating. But he raised the estimates for the efficiency ratio at the bank to 60.3% from a previous estimate of 59.6%. BofA also changed its earnings-per-share estimate for 2026, raising it to $11.09 from $10.79 before the second quarter.
Jefferies' David Chiaverini lowered earnings-per-share estimates for 2026 and 2027 to $10.65 to $12.60 from $10.95 to $12.75. But the analyst also maintained its buy rating.
KBW's Chris McGratty was among the most optimistic, saying the expense pull forward was used as an excuse to take gains with the stock. KBW raised by 1% its EPS estimate for the full year from $11 to $11.15, less than would be possible considering the second-quarter beat.
Citigroup declined to comment on the reports.
Reporting by Tatiana Bautzer; Editing by Mark Porter
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Tatiana Bautzer is a U.S. banking correspondent at Reuters in New York. She previously covered banks in Brazil, breaking news on deals by major global corporations, initial public offerings and bankruptcies. She has also delved into corruption scandals at Brazilian conglomerates and business disputes between billionaires. Prior to joining Reuters in 2015, Bautzer worked for business magazines Exame and Istoe Dinheiro and newspapers Valor Economico and O Estado de S. Paulo. She previously served as international correspondent for Valor Economico in Washington, D.C., covering multilateral institutions and trade. Bautzer holds a B.A. in Journalism and an MBA from the University of Sao Paulo.
NVIDIA (NASDAQ: NVDA | NVDA Price Prediction) and AMD (NASDAQ: AMD) both just reported, and the results reveal two very different AI hardware businesses. NVIDIA posted $81.61 billion in quarterly revenue on 85.23% growth. AMD delivered $10.253 billion at 37.85% growth. Even with a rumored 12-month delay of the vertical Kyber NVL144 rack architecture into 2028, the gap in scale, margins, and software lock-in is widening.
Rubin Ships in Volume. Helios Is Still Chasing. NVIDIA’s Data Center segment produced $75.246 billion, up 92% YoY, with networking alone growing 199% YoY to $14.8 billion. That networking figure is roughly 1.4x AMD’s entire Data Center segment of $5.775 billion. Jensen Huang framed the moment plainly: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.”
AMD’s story is real, but smaller in absolute terms. Lisa Su highlighted that “Customer engagement around MI450 Series and Helios is strengthening, with leading customer forecasts exceeding our initial expectations.” Meta committed to up to 6 gigawatts of Instinct GPU deployment. Encouraging, yet AMD is still a fast-follower renting hyperscaler capacity NVIDIA already dominates.
Business Driver NVIDIA AMD Data Center revenue $75.25B $5.78B Non-GAAP gross margin 75.0% 55% Networking growth +199% YoY Pensando (partner-dependent) Full Stack vs. Fast Follower NVIDIA sells a system: CUDA, Dynamo 1.0, NVLink, InfiniBand, and now Vera Rubin CPUs. Rubin systems are already in full production and shipping to all eight major hyperscalers this fall. AMD counters with ROCm 7 and the open UALink consortium, which sounds inclusive but slows unified execution.
Capital returns also diverge. NVIDIA authorized $80.0 billion in fresh buybacks and lifted its dividend from $0.01 to $0.25 per share. AMD’s insiders, meanwhile, have been trimming: Lisa Su sold heavily across May and June at prices between $436.89 and $476.43. Routine or not, it is a contrast worth noting when AMD trades at a P/E near a triple-digit multiple.
The Next Test Is Kyber Timing and Rubin Volume NVIDIA guided Q2 revenue to $91.0 billion with $119.0 billion in supply commitments already booked. AMD guided to roughly $11.20 billion at ~56% gross margin. I will be watching whether MI450 Helios racks convert engagements into shipped gigawatts, and whether Kyber slippage actually opens the window bulls hope for.
Why I Still Lean NVIDIA Despite the Kyber Noise For the cleanest exposure to AI infrastructure, NVIDIA carries the structural edge today. The 157.77% year-to-date run in AMD versus 4.98% for NVIDIA has already priced in a lot of MI450 optimism. NVIDIA is compounding 75% gross margins on a base 8x larger, buying back stock aggressively, and locking in optics and packaging partners years out. AMD suits investors chasing beta into a rack-scale ramp. The platform every model still trains on remains the structural winner.
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AMD stock is moving. See the chart and price action here. MI450 And Helios Mark AMD’s Rack-Level PushThe firm said AMD’s MI450 accelerators, paired with its Helios rack-scale architecture, represent "the first real shot" for the company to compete beyond individual chips and into fully integrated AI systems — a key battleground where Nvidia has built a commanding lead.
BNP analysts noted that MI450 is already sampling with lead customers and remains on track for a second-half production ramp. Early checks suggest demand is expanding beyond initial hyperscale partners and could broaden into 2027, signaling growing interest in AMD as an alternative AI supplier.
The bigger shift, however, is structural. With Helios and the integration of ZT Systems, AMD is moving toward delivering complete rack-level solutions — combining compute, networking and system design — rather than competing solely on GPU performance.
That approach mirrors Nvidia’s strategy, which has increasingly centered on tightly integrated systems like DGX and full-stack infrastructure offerings.
AMD’s Biggest Hurdle Still, BNP cautioned that AMD’s biggest hurdle is not hardware.
"Software and ecosystem remain the gating factors," the firm wrote, pointing to Nvidia’s entrenched CUDA platform, which continues to dominate AI development workflows.
AMD’s ROCm software stack has improved but still lags in maturity and adoption, particularly after the company lost several large inference deals in 2024 and 2025 due to software limitations.
Networking and interconnect capabilities are another area where AMD trails. BNP said the company remains behind both Nvidia and Broadcom Inc. (NASADQ:AVGO) in delivering a fully optimized, scalable AI fabric — a critical component for large-scale deployments.
Despite the gaps, the firm believes MI450 and Helios could position AMD as a credible second source for hyperscalers seeking supplier diversification amid surging AI infrastructure demand.
That dynamic could be especially important as customers look to reduce reliance on Nvidia’s tightly controlled ecosystem and manage cost pressures at scale.
The TakeawayBNP’s takeaway is nuanced: AMD is still playing catch-up in AI, but MI450 may mark a turning point where it can compete not just on chips, but on entire systems — provided it can close the software gap.
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The pitch for the Vanguard Growth ETF (NYSEARCA:VUG) is almost too clean. You pay 0.03% a year, roughly three cents per $100, and get the mega-cap growth trade that has driven US equity returns for the better part of a decade. Over the last ten years, VUG returned 413% against the S&P 500’s 309%. Vanguard’s historical data shows VUG beating the S&P 500 in about 95% of rolling five-year windows, a hit rate that ends most portfolio arguments before they start.
The interesting question is whether the underlying machinery still looks like a diversified fund, or has become a levered bet on four stocks.
What You’re Actually Buying VUG tracks the CRSP US Large Cap Growth Index, which sounds broad and technically is. Then you open the holdings. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) is 13.3% of the fund. Apple (NASDAQ:AAPL) is 12.3%. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is 9.9%, and Microsoft (NASDAQ:MSFT) is 9.1%. Those four names alone account for 44.6% of the portfolio, and the top ten holdings account for 65%.
Making money here requires the AI capex cycle to keep compounding, NVIDIA to keep delivering quarters like 85% year-over-year revenue growth at a 63% profit margin, and Apple, Alphabet, and Microsoft to fund the picks-and-shovels boom with tens of billions in cloud and infrastructure spend. Vanguard sells you a growth index. What you own is a concentrated AI infrastructure fund with a diversification wrapper.
Does the Math Actually Work? Over the past five years, VUG has been on equal footing with the SPY at ~83-84%. That said, the Invesco QQQ Trust (NASDAQ:QQQ) returned 102% over the same window at a 0.18% expense ratio. If your goal was pure mega-cap growth exposure, QQQ would have beaten VUG. VUG’s argument is that it captures most of that upside with a fraction of the cost drag and slightly broader coverage.
Year to date, VUG is up 7.5% while the S&P 500 is up 10.8%. Over the past 12 months, VUG returned 18.6%, compared with the index’s 21.6%. Microsoft, one of the top four holdings, is down 21% over the last year. When your fund is 9% in one stock and that stock rolls over, the low expense ratio does not save you.
The 2022 to 2023 period was worse. VUG lost 2.5% over those two calendar years, while the S&P 500 was roughly flat, at-0.5%. Both bad, but VUG was worse because concentration cut in the other direction. Rates rose, long-duration growth got repriced, and the fund suffered.
Fragility Dressed Up as Diversification Single-stock risk masquerading as index risk. A 13% NVIDIA weight means an NVIDIA drawdown is a VUG drawdown. The 2.2 beta on NVIDIA rides straight into your portfolio. Regime dependence. The 95% five-year win rate was built during falling and anchored rates, cloud buildout, and AI capex. Change the regime, and historical odds are no longer the odds. Correlation with what you already own. If you hold an S&P 500 fund and add VUG, you are doubling down on the top of the index. Schwab’s SCHG offers essentially the same exposure at a similar expense ratio, and the iShares Russell 1000 Growth ETF (NYSEARCA:IWF) charges roughly 0.19% for a portfolio that is 33% in NVIDIA, Microsoft, and Apple alone. Plenty of funds offer the same concentration. The three-cent price tag is what Vanguard largely owns.
Who This Fund Actually Fits VUG makes sense as a 10% to 20% growth sleeve for investors with a decade-plus horizon who understand they are buying the AI mega-cap trade and can sit through a 30% drawdown without selling. Pair it with a broad market fund and something outside US large-cap tech, and it does real work.
It does not fit anyone within five years of retirement who thinks they are buying a diversified growth index, or anyone using it as a core holding alongside an S&P 500 position. That is concentration you paid three cents for.
Contact [email protected] for any questions or corrections.
Nvidia NVDA stock fell about 1.2% on Wednesday as investors weighed renewed exports of the company's H200 artificial intelligence chips to China, ongoing export control scrutiny in Washington, and fresh developments in its AI business.
The decline came despite a series of positive updates surrounding Nvidia's long-term growth prospects, including a higher price target from KeyBanc, CEO Jensen Huang's comments on next-generation AI hardware production, and a new partnership milestone with Nokia.
US trade officials confirmed that Nvidia has begun shipping H200 AI chips to China after receiving government approval under a case-by-case licensing process.
Nvidia stock regained some of the losses and was trading down 0.73% at the time of writing.
Jeffrey Kessler, Under Secretary of Commerce for Industry and Security, told the House Foreign Affairs Committee that Nvidia had started exporting H200 chips to China, although volumes remain limited.
"There have been minimal exports of any H200s to China so far," Kessler testified, describing the initial deliveries as "very few".
According to Reuters, around 10 Chinese companies have been approved to receive advanced AI hardware from Nvidia and Advanced Micro Devices.
Those approved include Alibaba, Tencent, ByteDance and a unit of ZTE, with applicants required to satisfy national security requirements and submit to inspections.
The approvals triggered political debate in Washington.
Representative Gregory Meeks criticized the administration for approving advanced AI chip licenses, arguing that export controls were being used as "a bargaining chip in broader negotiations with China."
Meanwhile, Representative Bill Huizenga raised concerns that overseas subsidiaries of Chinese companies could exploit regulatory loopholes to retain advanced Nvidia Blackwell chips.
Analysts remain bullish on AI demandDespite the geopolitical uncertainty, Wall Street remained constructive on Nvidia's long-term outlook.
KeyBanc maintained its Overweight rating and raised its price target to $330 from $310.
Analyst John Vinh described Nvidia's supply outlook as "mixed but mostly positive."
The brokerage acknowledged that Nvidia's next-generation Vera Rubin architecture faces modest production delays related to thermal heat lid issues and HBM4 memory qualification with SK Hynix.
However, KeyBanc said it sees "minimal risk to estimates."
The firm expects Nvidia to offset any delays by increasing shipments of its B300 GPUs as demand for AI infrastructure remains strong.
Separately, Jensen Huang dismissed reports that the Vera Rubin platform had been delayed.
Speaking in Tokyo about Nvidia's role in Japan's artificial intelligence ambitions, Huang said the company's high-end AI accelerator systems remain on schedule for customer deliveries at "giant" production volumes.
Earlier this year, Huang also said Vera Rubin had entered full production using high-bandwidth memory supplied by Samsung Electronics, SK Hynix and Micron Technology.
Nvidia also announced new AI-powered radio access network technology developed jointly with Nokia.
The companies said the new software and hardware platform is expected to become commercially available next year and could allow telecommunications operators to double the amount of data transmitted over existing spectrum by 2028.
"With Nokia, Nvidia is “transforming RAN into a planet-scale AI computer,” Nvidia CEO Jensen Huang said in the statement. “This is a generational shift for operators."
The partnership forms part of Nokia's broader strategy to expand software revenue and capitalize on AI infrastructure growth beyond traditional telecommunications equipment.
Meanwhile, Nvidia continues to recover relative to the broader semiconductor sector.
Although the stock has gained 11% this year, compared with a 72% advance in the PHLX Semiconductor Index, it has recently outperformed as chip stocks pulled back.
Nvidia's market capitalization also remains above the $5 trillion mark after regaining the milestone earlier this week.
Chip stocks have been setting the tone in 2026. The VanEck Semiconductor ETF (NASDAQ:SMH) is up 66.69% year to date, and the iShares Semiconductor ETF (NASDAQ:SOXX) has done even better, rising 88.78%. Bank of America’s Global Fund Manager Survey now shows 82% of managers calling “long global semiconductors” the most crowded trade in the survey’s history, well ahead of “Long Magnificent 7” at 7%.
If you watched this move from the sidelines, the question is simple: did you miss it, or is there still runway in the four AI-chip names at the center of the trade: NVIDIA (NASDAQ:NVDA | NVDA Price Prediction), Advanced Micro Devices (NASDAQ:AMD), Broadcom (NASDAQ:AVGO), and Qualcomm (NASDAQ:QCOM)?
Valuation: Wide Dispersion Within a Crowded Sector The four stocks carry sharply different multiples. NVIDIA trades at a trailing P/E of 32x with a forward P/E of 24x, defensible against 85.2% YoY revenue growth last quarter. Broadcom sits at a trailing 64x but a forward 21x, reflecting the AI ramp still to come. Qualcomm is the outlier at a trailing 19x, forward 16x, and a 2.07% dividend yield. AMD is the stretched one: trailing P/E of 185x, forward 79x, after a 148.2% YTD run and a 232.1% one-year gain.
Forward Catalyst: The Numbers Still Grow Based on corporate America’s growth projections, the crowded trade still has room to run. NVIDIA guided Q2 revenue to roughly $91.0B, excluding China Data Center compute, and authorized an $80B share buyback on top of $38.5B remaining as of March. Broadcom guided Q3 AI semiconductor revenue to $16.0B, up over 200% year-over-year, alongside its eighth straight EPS beat.
AMD’s Q1 showed Data Center revenue of $5.78B, up 57% YoY, with the Meta 6-gigawatt Instinct GPU commitment anchoring the MI450 ramp. Qualcomm’s setup is the softest near term: Q3 adjusted EPS guidance of $2.10 to $2.30 steps down sequentially, but its hyperscaler custom-silicon shipments begin later in 2026, giving the stock a compelling new growth leg.
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Risk and Entry: Where the Downside Actually Lives Prediction markets are telling, particularly on NVIDIA. Polymarket assigns only a 5.5% probability of the stock closing above $240 by month-end, versus 75.0% above $200. That signals asymmetric consolidation ahead. Reddit sentiment on NVDA has cooled to neutral, with retail flagging DeepSeek’s in-house AI chip and SK Hynix’s U.S. market entry as fresh competitive worries.
AMD carries the true valuation risk: at 185x trailing earnings and a beta of 2.47, a growth wobble hits the multiple twice. For an income-oriented retirement portfolio, Qualcomm’s 15.88% one-month drawdown already provides an entry the others have not offered.
If you want a curated view of the operators best positioned for this cycle, our research team’s 7 Stocks Powering the AI Boom report frames the winners without chasing the froth.
Verdict The chip trade has evolved, but opportunity remains. NVIDIA and Broadcom still have the earnings power to grow into their multiples, and Qualcomm’s recent sell-off offers a value entry with a real 2026 catalyst. AMD is the one where the price has outrun the fundamentals for now. For a retirement-focused investor, NVDA, AVGO, and QCOM screen as the more defensible setups on any weakness, while AMD’s stretched multiple warrants closer monitoring before the risk/reward rebalances.
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Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? AT&T (T - Free Report) , which belongs to the Zacks Wireless National industry, could be a great candidate to consider.
This telecommunications company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 8.34%.
For the most recent quarter, AT&T was expected to post earnings of $0.55 per share, but it reported $0.57 per share instead, representing a surprise of 3.64%. For the previous quarter, the consensus estimate was $0.46 per share, while it actually produced $0.52 per share, a surprise of 13.04%.
Price and EPS Surprise
With this earnings history in mind, recent estimates have been moving higher for AT&T. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its nice Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. 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.
AT&T currently has an Earnings ESP of +4.83%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on July 22, 2026.
When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Netflix reports Q2 2026 earnings after the close on July 16, 2026, and the stock heads into the earnings report at prices most investors never expected to see again.
Our 24/7 Wall St. price target for Netflix (NASDAQ:NFLX | NFLX Price Prediction) is $270.75, implying 268.21% upside from $73.53. Our recommendation is buy, at 90% confidence, which is unusually high for our model.
24/7 Wall St. Price Target Summary Metric Value Current Price $73.53 24/7 Wall St. Price Target $270.75 Upside 268.21% Recommendation BUY Confidence Level 90% This aggressive target assumes the market has mispriced a business still growing revenue in the mid-teens with expanding margins.
A Brutal Year for a Growing Business Netflix shares are down 41.73% over the past year and 21.58% year to date, trading roughly 11% below the 52-week high of $127.75. This drawdown collided with strong operating results.
Q1 2026 revenue of $12.25 billion grew 16.19% year over year, and management raised the 2026 free cash flow outlook to roughly $12.5 billion, up from $11 billion. The reported EPS of $1.23 came in missing expectations by 8.55%, but net income was inflated by a $2.80 billion Warner Bros. termination fee.
The Case for $283 and Higher Netflix guided FY2026 revenue to $50.7B to $51.7B at a 31.5% operating margin. Advertising is set to roughly double to $3 billion in 2026, with advertiser count up 70% year over year to 4,000+ clients. Live events, gaming, and the content slate (Narcos, Fincher, Gerwig’s Narnia) support continued engagement.
Polymarket traders assign a 72.5% probability to a Q2 earnings beat and 64% to a Q2 operating margin between 32% and 34%. Our bull scenario points to $283.54 in 12 months.
What Could Go Wrong NFLX has declined 9.89% on average on the day of an earnings miss and 1.58% even on beats. Content amortization is first-half-weighted in 2026, the Brazilian tax dispute carries a $700 million deposit exposure, and the abandoned Warner Bros. deal removes an acceleration lever.
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Insider activity shows net selling across 110 recent transactions. Most insider sales are routine 10b5-1 dispositions, and FCF growth of 91.44% in Q1 argues the underlying engine is intact. Our bear case still lands at $208.66, above today’s price.
How Netflix Compares to Disney and Spotify Walt Disney (NYSE:DIS) is the closest streaming-plus-content comp. Disney trades at a P/E of roughly 13 with an operating margin of 14.6%, versus Netflix at a P/E of 28 and an operating margin of 29.5%. Disney’s Entertainment SVOD segment only just cracked 10.6% margins. Netflix earns nearly triple that on streaming, which supports the premium multiple.
Spotify (NYSE:SPOT) is the direct-to-consumer subscription growth peer. Spotify carries a market cap of $99 billion on 293 million Premium subscribers and 761 million MAUs. Netflix at $309 billion serves 325 million paid subs but monetizes each far better.
On a market-cap-per-paid-sub basis, Spotify commands a higher figure despite lower margins, suggesting Netflix’s target multiple is reasonable.
Netflix vs. Peers Company P/E Operating Margin Netflix 28 29.5% Disney 13 14.6% Spotify N/A N/A Netflix Price Prediction 2027 The 24/7 Wall St. price target of $270.75 is aggressive, and sell-side consensus of $113.15 implies meaningful upside. The recommendation is buy at 90% confidence.
Raising 2026 FCF guidance to $12.5 billion while the market caps this business at $309 billion is a genuine valuation dislocation. The bull thesis strengthens if Netflix delivers the guided Q2 operating margin of 32.6% and reaffirms ads doubling. The thesis weakens if content amortization compresses margins below 30% and subscriber additions stall.
Year 24/7 Wall St. Price Target 2027 $270.75 This projection assumes Netflix executes on its ad-tier ramp, expands margins toward 35%, and holds subscriber growth in the mid-single digits. Upside could come from live sports expansion or strategic acquisition. Downside risk centers on content quality deterioration and macro-driven ad softness.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Netflix didn't make the cut. Grab the names FREE today.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of NFLX 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.
Key Takeaways Visa launched AI Financial Assistant inside banking apps for spending insights and account actions.VAS revenues rose 28% to $3.2 billion in fiscal Q1 2026, supporting Visa's growth beyond payments.Visa plans a U.S. pilot in August 2026 before expanding AI Financial Assistant globally. Visa Inc. (V - Free Report) launched AI Financial Assistant, a new value-added service that brings conversational financial guidance to existing banking apps. The white-label feature integrates directly into a bank's app. Customers can check their spending, ask questions in conversational language and take actions like locking a card or setting alerts without leaving the app. It is built for secure banking environments that help protect customer data.
The service is part of Visa's Digital Issuer Solutions platform, providing a single chat-based entry point inside the banking app. Banks can deploy it without custom development, making adoption faster and easier. It combines a bank's customer data with insights from Visa's global payments network to deliver personalized financial guidance. Visa will launch a U.S. pilot in August 2026 before expanding the service globally.
The launch supports Visa's strategy of expanding its fast-growing Value-Added Services (VAS) business, an increasingly important growth driver. In first-quarter fiscal 2026, VAS revenues rose 28% year over year to $3.2 billion, accounting for nearly half of the company's total revenue growth. By embedding AI-powered financial guidance into banking apps, Visa is broadening its role beyond payment processing.
This strengthens VISA’s ties with issuers and increases the value of its platform.
The rollout is expected to reduce the company's reliance on payment volumes over time. As more banks adopt AI Financial Assistant, Visa can strengthen client relationships and expand the use of its Digital Issuer Solutions platform. This could drive demand for other value-added products and support sustainable long-term growth.
How Are Visa's Competitors Positioned?Some of Visa's key competitors in the payments space are Mastercard Incorporated (MA - Free Report) and American Express Company (AXP - Free Report) .
Mastercard is expanding its AI capabilities to strengthen its value-added services business and deepen client relationships. It launched Agent Pay for Machines, enabling AI agents and connected devices to make autonomous payments. The move helps Mastercard tap into the growing market for AI-powered payments.
American Express is also accelerating its AI strategy. American Express introduced the Agentic Commerce Experiences (“ACE”) Developer Kit and Amex Agent Purchase Protection to support AI-powered transactions. AXP also agreed to acquire AI expense management startup Hyper, strengthening its commercial AI capabilities.
Visa’s Price Performance, Valuation & EstimatesVisa’s shares have risen 1.6% year to date against the industry’s 9.6% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, V trades at a forward price-to-earnings ratio of 24.61, well above the industry average of 17.08. V carries a Value Score of D.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Visa’s fiscal 2026 earnings implies a 14.2% jump from the year-ago period’s level.
JPMorgan Chase & Co (NYSE:JPM) shares rallied in early trading on Wednesday, after the release of fiscal second-quarter results.
The company continued to deliver best-in-class results, driven by strength in the equity capital markets, according to RBC Capital Markets.
• JPMorgan Chase stock is approaching key resistance levels. Why did JPM hit a new high?
The JPMorgan Chase Analyst: Analyst Gerard Cassidy maintained an Outperform rating, while raising the price target from $330 to $370.
The JPMorgan Chase Thesis: The company reported record earnings for the quarter, with 27% year-on-year revenue growth on broad-based strength, Cassidy said in the note.
Check out other analyst stock ratings.
He highlighted the following from JPMorgan Chase’s results:
Net income grew 41% year-on-year to $21.2 billion Earnings came in at $7.70 per share. Excluding one-time gains, net income grew by a strong 13% year-on-year to $16.9 billion. Excluding one-time gains, earnings stood at $6.14 per share. A net gain of $4.6 billion from share exchanges with Visa Inc (NYSE:V) and gains of around $1 billion on equity investments boosted the company’s net income, the analyst stated.
"Markets revenue was a standout at $12.1B, up 35% YoY, driven overwhelmingly by Equity Markets (+86% YoY)," he further wrote.
The Star Performer: The Commercial & Investment Bank (CIB) segment was the "star performer" in the quarter, Cassidy said. Net income from the business grew 46% year-on-year to $9.7 billion, with Equity Markets fees nearly doubling, he added.
"The company’s diversified business model combined with the billions of dollars of investments made over the last decade have resulted not only in a fortress balance sheet but also a highly profitable diversified banking model," Cassidy wrote.
Under the leadership of CEO Jamie Dimon, JPMorgan Chase could continue to "reward long-term shareholders with above-average profitability and returns" going ahead, the analyst further stated.
JPM Price Action: Shares of JPMorgan Chase had risen by 1.79% to $349.02 at the time of publication on Wednesday.
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Tech analyst Dan Ives announced that he has teamed up with Yorkville Securities to form a new kind of merchant bank. Johnson & Johnson (JNJ) beat Q2 estimates and raised guidance, but EPS decline weighed on sentiment despite innovative medicine strength.
Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) is up 24.03% year to date and 65.92% over the past year, riding oncology strength and a raised full-year outlook. Our proprietary model sees room to run.
Our 24/7 Wall St. price target for JNJ is $277.85, implying 9.45% upside from the current $253.85. The recommendation is buy with 90% confidence, high by our standards for a mega-cap.
24/7 Wall St. Price Target Summary Metric Value Current Price $253.85 24/7 Wall St. Price Target $277.85 Upside 9.45% Recommendation BUY Confidence Level 90% A Year of Accelerated Growth Is Playing Out JNJ delivered Q1 2026 revenue of $24.06 billion, up 9.9% year over year, with adjusted EPS of $2.70 beating the $2.6773 consensus. Q2 2026 reinforced the trajectory with reported sales of $25.3 billion (up 6.6%) and adjusted EPS of $2.90, prompting another guidance raise.
Management now targets full-year revenue of $100.30 billion to $101.30 billion and adjusted EPS of $11.45 to $11.65. The stock traded as low as $155.89 in the past 52 weeks and now sits just below its $269.43 high after a 5.01% pullback in the last week.
Why Bulls See a Breakout Above $290 Oncology remains the engine. DARZALEX grew 22.5% to $3.96 billion in Q1, TREMFYA surged 68.3%, CARVYKTI jumped 62.1%, and RYBREVANT/LAZCLUZE climbed 82.7%. Recent approvals for ICOTYDE, VARIPULSE Pro, and TECVAYLI plus DARZALEX FASPRO extend the runway.
Management committed to double-digit growth by decade’s end, and the planned Orthopaedics separation could unlock a valuation re-rating. Our bull case price target over the next 12 months is $290.54, a 14.45% total return.
What Could Go Wrong STELARA collapsed 59.7% to $656 million as biosimilar competition intensified, and litigation charges of $330 million weighed on GAAP net income, which fell 52.4%.
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Bulls view the decline as optics driven by TREMFYA absorbing STELARA share, with the litigation charge running as a non-recurring item. Our bear case target is $236.59, a 6.8% drawdown if patent cliffs bite harder than expected.
How JNJ Compares to Merck and Pfizer Merck (NYSE:MRK) is the closest oncology-driven comp given KEYTRUDA’s dominance. Merck guides 2026 non-GAAP EPS of $8.93-$9.03 on revenue of $64.3B-$64.8B, but a $0.37 Cidara acquisition charge muddies the trailing picture. JNJ’s diversified MedTech plus Innovative Medicine mix looks cleaner, supporting our target’s forward P/E of roughly 23.
Pfizer (NYSE:PFE) trades at a trailing P/E of just 14 with a dividend yield near 6%, versus JNJ’s 30 P/E and 2.01% yield. Pfizer looks statistically cheaper, but the discount reflects post-COVID revenue erosion and patent-cliff risk. JNJ’s premium is earned, and our target leaves room versus the sell-side consensus of $259.
I’d Buy It Here The 24/7 Wall St. price target of $277.85 with 90% confidence and a buy rating reflects a company hitting on innovation while paying investors to wait through a 64th consecutive dividend increase.
I’d be a buyer if the December 8 Enterprise Business Review confirms the double-digit growth path. I’d stay sidelined if litigation charges reaccelerate or if the Orthopaedics separation gets delayed.
Year 24/7 Wall St. Price Target 2026 $277.85 2027 $298.00 2028 $318.00 2029 $337.00 2030 $356.79 These projections assume JNJ executes on its path toward double-digit growth by decade’s end. Significant upside or downside could result from oncology pipeline outcomes or the Orthopaedics separation.
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52-Week Range$159.80▼
$269.43Dividend Yield2.15%
P/E Ratio28.78
Price Target$261.26
Johnson & Johnson NYSE: JNJ is an elite income investment because of its Dividend King status, healthy balance sheet, and incredibly strong, defensive business model. Critical details include its product portfolio and pipeline, which are producing numerous catalysts simultaneously in 2026.
A wave of approvals, expanded uses, and pipeline advances promises sustained growth, robust cash flow, and capital return safety long into the future. Which is why the mid-July price pullback, triggered by the earnings results and guidance, is a textbook entry point.
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JNJ Pulls Back to Buy ZoneJNJ hit a peak ahead of the earnings release, indicating potential for a pullback. Down approximately 2% following the release, the stock is on track for a nearly-10% pullback, which would represent a significant discount relative to the recent high, but lower lows are unlikely.
Likely buyers on the dip include the institutional group, which owns more than 60% of the stock and has been accumulating, and the analysts, whose trends reflect increasing confidence in an already fundamentally stable company.
Analyst trends include increased coverage versus last year, firmer sentiment, a 74% Buy-side bias to the Moderate Buy rating, and an uptrend in the price targets. Consensus is a sticking point, with fair value near the early-July highs, but the trend matters, leading to the high end of $300 and fresh all-time highs. A move to fresh all-time highs is significant for chart watchers, as it would indicate a continuation of the trend, with near-term targets at $300 and longer-term targets in the $350 region.
Analyst chatter following the release focused on the beat relative to the high bar set. Strength in the pharmaceutical pipeline and fundamental health in MedTech were also noted. Importantly, the market views JNJ as having successfully moved past its patent cliff, on track for sustainable growth, cash flow, and capital returns.
Capital returns include buybacks, but they are opportunistic and often insufficient to offset dilutive activity; the dividend is much more significant. The dividend yields an above-average 2.1% and has grown at a mid-single-digit compound annual growth rate in recent years. The likely outcome is that JNJ will continue with annual increases well into the future.
Johnson & Johnson’s Strength Driven by Diversified PortfolioJohnson & Johnson had a strong quarter, revealing the strength of its repositioning efforts and portfolio. The company’s $25.31 billion in net revenue was up 6.8% year-over-year (YOY), 100 basis points (bps) better than expected, on strength in U.S. and International markets across the Innovative Medicine and MedTech portfolios. There were spotty weaknesses within each segment tied to legacy products, but each was offset by a strength. Critical details include the half-dozen new approvals and a dozen or so positive pipeline updates.
Margin news was also good. The company experienced margin pressures but was able to offset them to a large degree. Bottom-line results include $2.90 in adjusted earnings per share (EPS), up 4.7% YOY and a nickel ahead of consensus, and $8.7 billion in free cash flow (FCF), more than sufficient to support balance sheet health while investing and returning capital to investors.
Looking ahead, the company expects the strengths to continue and has raised guidance accordingly. The new full-year targets were increased by 30 bps at the midpoint, expecting 7.3% top-line growth and $11.68 in adjusted earnings, well above the consensus estimate. Among the factors investors should consider is that JNJ expects revenue to surpass the $100 billion mark for the first time in its history, a psychological threshold for institutional investors.
JNJ: Low Risk, High RewardJohnson & Johnson’s primary risks include its patent cliff and ongoing talc litigation. The talc litigation refers to decades of lawsuits alleging that the company's talc-based products—most notably its baby powder were contaminated with asbestos and caused ovarian cancer and mesothelioma.
The patent cliff appears to be mitigated, with approvals and pipeline gaining momentum, leaving talc as the primary hurdle for investors. The company continues to face thousands of individual claims despite its attempts to settle. This leaves it open to cash-draining adverse decisions that can drain investment capital and capacity for capital returns. What the market gets wrong is that talc isn’t a company-ending threat but rather a slow drain on capital that may or may not worsen.
Catalysts include the planned spin-off of the company's orthopedics business. Analysts view it as a price-multiple unlocking move, trimming lower-margin, lower-growth businesses in favor of higher-performing ones. The resulting company will be a pharma and medtech powerhouse with strong franchises in oncology, cardiology, and potentially robotics. The OTTAVA robotic system is on track for approval as soon as later this year, setting the stage for it to gain share versus competitors like Intuitive Surgical NASDAQ: ISRG.
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United Airlines Holdings Inc (NASDAQ:UAL, XETRA:UAL1) will report second-quarter earnings after the market close on Wednesday, with investors focused on how the carrier is managing rising fuel costs against resilient travel demand.
UBS analysts said the bar for second-quarter earnings per share sits at $1.85 to $1.90, well above the midpoint of United's own $1 to $2 guidance.
UBS forecasts EPS of $1.91, ahead of the $1.86 consensus, on 3% capacity growth, a 12.8% rise in unit revenue, unit costs excluding fuel up 7%, and fuel at $4.25 per gallon.
Fuel will be a key focus. United typically updates fuel guidance the Friday before earnings, but a sharp jump in jet fuel prices has made the outlook harder to pin down. Gulf Coast jet fuel was trading near $3.60 per gallon and West Coast jet fuel near $3.90, UBS said, and the market will likely benchmark United's assumption against $3.30 to $3.40 per gallon.
Consensus for third-quarter EPS guidance sits at $3 to $4; a higher fuel assumption would push that lower. UBS said the most important signal will be management's confidence in recovering nearly all of the recent fuel spike by the fourth quarter.
For full-year 2026, most investors expect EPS guidance of $9 to $11, above the current $7 to $11 range, though the outlook remains fuel-dependent. UBS said the key metrics to watch will be United's fourth-quarter capacity outlook and its implied fourth-quarter revenue growth.
United Airlines Holdings Inc (NASDAQ:UAL, XETRA:UAL1) will report second-quarter earnings after the market close on Wednesday, with investors focused on how the carrier is managing rising fuel costs against resilient travel demand.
UBS analysts said the bar for second-quarter earnings per share sits at $1.85 to $1.90, well above the midpoint of United's own $1 to $2 guidance.
UBS forecasts EPS of $1.91, ahead of the $1.86 consensus, on 3% capacity growth, a 12.8% rise in unit revenue, unit costs excluding fuel up 7%, and fuel at $4.25 per gallon.
Fuel will be a key focus. United typically updates fuel guidance the Friday before earnings, but a sharp jump in jet fuel prices has made the outlook harder to pin down. Gulf Coast jet fuel was trading near $3.60 per gallon and West Coast jet fuel near $3.90, UBS said, and the market will likely benchmark United's assumption against $3.30 to $3.40 per gallon.
Consensus for third-quarter EPS guidance sits at $3 to $4; a higher fuel assumption would push that lower. UBS said the most important signal will be management's confidence in recovering nearly all of the recent fuel spike by the fourth quarter.
For full-year 2026, most investors expect EPS guidance of $9 to $11, above the current $7 to $11 range, though the outlook remains fuel-dependent. UBS said the key metrics to watch will be United's fourth-quarter capacity outlook and its implied fourth-quarter revenue growth.
• GE Aerospace stock is trading at elevated levels. Where are GE shares going?
Analysts expect the company to report earnings of $1.85 per share on $11.79 billion in quarterly revenue, according to Benzinga Pro. The stock also carries a consensus price forecast of $297.65, based on ratings from 27 analysts.
Guidance Increase Anticipated on Service GrowthRBC Capital Markets expects GE Aerospace to raise its full-year 2026 adjusted earnings before interest and taxes guidance by approximately $500 million, matching historical outperformance trends where the company beat its initial guidance by 16% in 2024 and 13% in 2025.
Herbert noted that capacity constraints, legacy engine usage and strong airline demand protect aftermarket engine spending. RBC models 19% services growth for the second quarter and 18% for the full year.
Near-Term Catalyst Potential Diminished by 2027 ConcernsThe report indicates that the upcoming second-quarter results may not serve as a positive catalyst for the stock, as market expectations already factor in the strong performance and guidance lift.
RBC Capital Markets notes that investor attention is shifting toward 2027, where tougher year-over-year comparisons and a projected deceleration in services growth could create headwinds for investor sentiment.
Supply Chain Tightness Extends Turn-Around TimesRBC Capital Markets reported that while material flow has improved, turnaround times at maintenance facilities remain well above historical averages. “LEAP deliveries remain on track for ~2,100,” Herbert stated, but emphasized that the broader aerospace supply chain remains tight, leaving a slim margin for error despite on-track deliveries for new engines.
Geopolitical Headwinds Offset by Structural ProtectionsThe firm noted the stock has risen 3% since March 1, recovering from the initial downturn tied to the Iran war. Elevated crude oil prices, which sit at approximately $85 per barrel after peaking in May, have not reduced passenger travel enough to impact aftermarket spending.
RBC Capital Markets stated that the $400 price forecast reflects 39 times its fiscal year 2028 free cash flow estimate of $10.5 billion.
GE Stock Price Activity: GE Aerospace shares were up 0.83% at $356.68 at the time of publication on Wednesday, according to Benzinga Pro data.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Investors interested in stocks from the Computer - Integrated Systems sector have probably already heard of Hewlett Packard Enterprise (HPE) and Advanced Micro Devices (AMD). But which of these two stocks is more attractive to value investors?
PayPal and Stripe logos are seen in this illustration taken July 15, 2026. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tab
CompaniesNEW YORK, July 15 (Reuters Breakingviews) - Stripe's digital deal wallet is a little light. The financial plumbing enterprise and buyout shop Advent have offered to jointly buy PayPal (PYPL.O), opens new tab for $53 billion. It's a welcome lifeline for the struggling owner of Venmo and other payment processing systems, but CEO Enrique Lores can also push the suitors to dig deeper.
At $60.50 a share, the takeover price reported by Reuters represents a 27% premium to where PayPal stock closed on Tuesday. Stripe and Advent are valuing PayPal at about 9 times the free cash flow analysts expect it to generate in 2026, according to estimates gathered by Visible Alpha.
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The bid looks stingy. A broader peer group, including Fiserv (FISV.O), opens new tab, Block (XYZ.N), opens new tab and Adyen, trades at about 16 times expected 2026 free cash flow. Stripe, last valued privately at about $160 billion, itself looks far pricier: it generated roughly $3 billion of free cash flow last year, Bernstein analysts reckon, implying a valuation multiple of more than 50 times.
There is room for Stripe and Advent to pay more. Assume the duo raises its offer to $70 per share, or $62 billion in market value. PayPal is on track to generate an estimated $6.4 billion of operating income in 2027. Previous deals involving peers First Data, Worldpay and others have promised cost savings worth about 10% of the target's operating expenses, which would equal some $900 million in this case. Tax the combined $7.3 billion at 20% and the buyers would earn a theoretical return of about 9.5%. PayPal's weighted average cost of capital is 8.9%, per Morningstar analysts.
Although the financial returns look promising, the risks would grow, too. PayPal's balance sheet carries little net debt, making space for the $50 billion of bank financing available, as reported by Reuters. Paying $70 a share, or 15% more than the existing entry, would load the company with debt of over 7 times EBITDA, shrinking the room for error.
It would also accentuate the strategic challenges. Businesses using Stripe processed, opens new tab $1.9 trillion of payments last year, up 34% from 2024. PayPal's volume reached, opens new tab$1.8 trillion, representing only 7% growth. Integrating or upgrading PayPal's legacy technology would take time and money, while acquiring consumer-facing services such as Venmo could irritate Stripe customers like Shopify.
The prospects are nevertheless alluring. PayPal would help broaden Stripe, adding buy-now-pay-later products, debit cards, wallets and stablecoins. It also could improve its chances in agentic commerce, a market Morgan Stanley analysts estimate, opens new tab will reach $385 billion by 2030. Stripe will probably have to shell out more money for the privilege, but it also knows all too well the dangers of financial friction.
Context NewsPayments company Stripe and private equity firm Advent International have made a joint bid to buy PayPal for $60.50 per share, in a deal that would value the payments company at more than $53 billion, Reuters reported on July 14, citing unnamed sources.The offer, submitted earlier in July, is backed by about $50 billion in committed financing from banks, one of the sources told Reuters.The proposal, which has not received a response, follows an initial approach made in early April, according to the report. Stripe and Advent would each own equal stakes in PayPal, it added.For more insights like these, click here, opens new tab to try Breakingviews for free.
Editing by Jeffrey Goldfarb; Production by Maya Nandhini
Breakingviews
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on X @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.
Karen is a columnist based in New York focusing on global technology and venture capital sectors, writing stories about artificial intelligence, fintech, and semiconductor companies. She used to cover deals in the Middle East region and global metal mining sector. Prior to Breakingviews, she was a European gas and power reporter at S&P Global Platts in London and covered funds and equities at Morningstar UK. Karen also briefly worked at Bloomberg. Born and raised in Hong Kong, she is fluent in Mandarin and Cantonese.
Key Takeaways Stripe and Advent offered $60.50 per share, valuing PayPal at over $53 billion, per Reuters. PYPL shares jumped after the news, boosting the outlook for PYPL-heavy ETFs. PYPU, FINX and IPAY could benefit if PayPal's takeover momentum continues. Stripe and private equity firm Advent International have jointly offered to acquire PayPal Holdings (PYPL - Free Report) in a deal valued at more than $53 billion, according to Reuters, as quoted on Yahoo Finance. The proposal marks one of the biggest potential transactions in the digital payments industry in recent years.
$60.50-Per-Share OfferThe consortium has offered $60.50 per PayPal share, representing a roughly 28% premium to the stock's closing price on Tuesday. PayPal shares surged about 13.17% after hours on July 14, 2026.
The bid, submitted earlier this month, is backed by about $50 billion in committed bank financing, according to sources familiar with the matter.
Talks Began Earlier This YearThe proposal follows an initial approach made in early April. Sources said Stripe and Advent have yet to receive a response from PayPal but are hoping to advance discussions in the coming weeks.
If completed, the two firms would jointly own PayPal, each holding an equal stake. The proposal does not involve breaking up the company.
Why PayPal Is Drawing InterestOnce a pioneer in digital payments, PayPal has struggled in recent years amid intensifying competition from alternative payment platforms, including Apple Pay and Google Pay.
The company has also faced slowing growth since the pandemic-era e-commerce boom faded, leading to a significant decline in its market valuation.
Despite these challenges, PayPal remains one of the world's largest digital payments platforms, making it an attractive acquisition target for strategic and financial buyers.
PayPal Continues to Improve OperationsDespite competitive pressures, PayPal has shown signs of operational improvement.
In the first quarter, revenue rose 7% year over year to $8.35 billion, exceeding analysts' expectations. On a constant-currency basis, total payment volume increased 8% to approximately $464 billion.
Management has also outlined plans to use artificial intelligence to streamline operations, reduce organizational complexity, and generate roughly $1.5 billion in savings over the next two to three years, with those savings expected to be reinvested in future growth initiatives.
For the second quarter, PayPal expects low-single-digit currency-neutral revenue growth, a low-single-digit decline in transaction margin dollars (TM$) and a high-single-digit fall in non-GAAP EPS. The comparison is difficult because last year's second quarter benefited from a partner renewal, stronger credit performance, lower operating expenses and a favorable tax rate.
PYPL stock currently has a great value score of “A”, but downbeat growth score of “D” and a momentum score of “F.”
ETFs to Gain As the acquisition news lifted PayPal shares, exchange-traded funds (ETFs) with significant exposure to the stock could also benefit. These include Direxion Daily PYPL Bull 2X ETF (PYPU - Free Report) , Global X FinTech ETF (FINX - Free Report) and Amplify Digital Payments ETF (IPAY - Free Report) .
Shares in PayPal Holdings (Nasdaq: PYPL) are skyrocketing in premarket trading this morning after a report that the legacy digital payments platform has received a joint buyout offer from one of today’s most successful fintech companies and a major private equity firm. Here’s what you need to know.
What’s happened?Early this morning, Reuters reported that the fintech giant Stripe and the private equity giant Advent International have offered to buy PayPal for well above its closing stock price on Tuesday.
According to Reuters, Stripe and Advent made PayPal a buyout offer of $60.50 per share, equating to about $53 billion in total. That $60.50 per share offering price is roughly 28% higher than PayPal’s closing price of $47.37 yesterday.
Stripe and Advent reportedly made the offer to PayPal earlier this month. It is an offer that PayPal has reportedly not responded to yet.
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While Reuters did identify its sources, other than saying they were people “familiar with the matter,” news of the proposed buyout offer could put pressure on PayPal leadership to publicly respond—and face displeasure from PayPal investors if they do not like the company’s response.
Fast Company has reached out to PayPal, Stripe, and Advent for comment.
What do Stripe and Advent want with PayPal?The report didn’t go into specifics about what Stripe and Advent would do with the legacy online payments giant should they acquire it, but Reuters said that the two suitors would jointly own PayPal instead of breaking up the company.
PayPal Holdings PYPL shares are trading cheaply, as suggested by the Value Score of A. In terms of forward 12-month price-to-earnings (P/E), PayPal is currently trading at 8.53X, lower than the Zacks Financial Transaction Services industry average of 17.02X.
Stripe and PayPal have spent years expanding across digital commerce from opposite directions. Stripe built its business by selling payments infrastructure to merchants.
I am upgrading Qualcomm (QCOM) to a buy, citing its data center pivot and accelerating automotive segment as key growth drivers. QCOM targets doubling non-handset revenue to $40B by FY29, with data center and Automotive momentum offsetting Apple modem business loss. Intrinsic value is estimated at $220 per share, making QCOM attractively valued at a 23% discount after a recent 31% share price decline.
Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) and Pfizer (NYSE:PFE) both closed Q1 2026 with earnings beats, yet their post-report stories look nothing alike. JNJ raised guidance while headlines fixated on a 68,000-case talc litigation MDL. Pfizer reaffirmed its outlook and pushed harder into obesity and oncology. Two large-cap dividend payers, two very different setups for buyers today.
Oncology Powers JNJ. Padcev and Vyndaqel Carry Pfizer. JNJ posted $24.062 billion in revenue, up 9.9%, with Innovative Medicine at $15.426 billion (+11.2%). DARZALEX cleared $3.964 billion (+22.5%), TREMFYA jumped 68.3%, and CARVYKTI grew 62.1%. STELARA cratered 59.7% from biosimilar erosion, and the portfolio still absorbed the hit.
Pfizer delivered $14.451 billion (+5.4%) with Specialty Care up 12% and Oncology up 9%. Padcev was the standout at $591 million (+39%). COVID kept dragging: Comirnaty down 59%, Paxlovid down 62%. CEO Albert Bourla said Pfizer is “positioned to lead” in oncology and obesity.
Business Driver JNJ PFE Growth engine Oncology and immunology Launched/acquired products +22% Standout drug DARZALEX +22.5% Padcev +39% Biggest drag STELARA -59.7% Paxlovid -62% One Sharpens Its Focus. One Bets the House on Obesity. Joaquin Duato is stripping JNJ down to six priority areas, spinning DePuy Synthes within 18 to 24 months, and investing over $1 billion in next-gen cell therapy manufacturing in Pennsylvania. Guidance moved up to $100.8 billion in revenue and $11.55 in adjusted EPS.
Pfizer is going the other direction. Bourla dropped ~$7 billion on Metsera for ultra-long-acting GLP-1 obesity assets, added a $1.35B PD-1 x VEGF bispecific from 3SBio, and lined up ~20 pivotal study starts for 2026. The Vyndamax patent settlement pushed effective U.S. exclusivity to June 2031, defusing a real cliff.
Talc Charges vs. Obesity Readouts JNJ absorbed $330 million in litigation charges in Q1 and still beat. Polymarket traders assign a 92% probability that JNJ beats again next report. The stock is up 26.71% year to date, while PFE sits at -1.52%. I want to see Padcev’s August 17, 2026 PDUFA land and Metsera Phase 3 data validate the obesity bet.
Why the Talc Noise Looks Like My Kind of Setup I lean toward JNJ here. A 64 consecutive year dividend record, a 46% payout ratio backed by a $21 billion free cash flow target, and accelerating oncology growth are worth more to me than the litigation overhang costs. If you need income today, PFE’s 7.2% yield and 8x forward earnings offer a turnaround pitch, but the obesity thesis has to actually work. For steadier compounders, I would take the Dividend King while the courtroom headlines still cloud the price.
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Key Takeaways Cisco raised its fiscal 2026 AI infrastructure order target to about $9 billion on hyperscaler demand.Enterprise switching orders rose over 40%, while campus networking orders increased more than 25%.Acacia secured over $1 billion in quarterly orders and is expected to grow more than 200% in fiscal 2026. Cisco Systems (CSCO - Free Report) shares have jumped 52% year to date (YTD), outperforming the broader Zacks Computer & Technology sector’s return of 14.7%. The company has been benefiting from a strong AI push, a networking supercycle, improving its enterprise networking business and recovering its security business. These factors have helped in improving Cisco’s competitive prowess compared with the likes of Hewlett Packard Enterprise (HPE - Free Report) , Broadcom (AVGO - Free Report) and Arista Networks (ANET - Free Report) , shares of which have appreciated 106.4%, 39.4% and 12.6%, YTD, respectively. Is there room for further upside in Cisco shares? Let’s find out.
CSCO Stock’s Price Performance
Image Source: Zacks Investment Research
AI Push & Strong Networking Growth Aids Cisco’s ProspectsCisco’s growing AI infrastructure business has been a major growth driver. The company raised its fiscal 2026 AI infrastructure order target from $5 billion to approximately $9 billion, reflecting stronger-than-expected hyperscaler demand. Cisco secured five new hyperscaler AI design wins during the third quarter of fiscal 2026, including Silicon One-powered systems and Acacia optical networking products. This reinforces investor confidence that the AI networking opportunity is expanding beyond a handful of deployments. Cisco now expects to recognize approximately $4 billion in AI infrastructure revenues from hyperscalers in fiscal 2026. The company expects at least $6 billion of AI-related revenues in fiscal 2027, indicating strong visibility into future growth.
Cisco is a key beneficiary of the networking supercycle as hyperscalers, enterprises, sovereign cloud operators, public-sector organizations and telecom providers modernize networks simultaneously to support AI workloads. The company believes this demand is larger and faster than previous technology cycles because AI infrastructure cannot function without modern, high-speed networking. In the third quarter of fiscal 2026, enterprise data center switching orders grew more than 40%, campus networking orders reached record levels (up more than 25%), and wireless orders increased more than 40% year over year.
The Acacia optics business generated more than $1 billion of orders in the third quarter of fiscal 2026 and is expected to grow over 200% in fiscal 2026, positioning Cisco to capture a larger share of AI networking spend. The business has shipped more than 750,000 400G coherent optics and over 40,000 800G coherent optics, giving Cisco leadership in AI optical interconnects. Meanwhile, Silicon One continues winning large hyperscaler deployments, strengthening Cisco's competitive position in AI networking.
The company’s refreshed security portfolio is gaining traction, with double-digit order growth in core security products (excluding Splunk) and strong firewall momentum. Cisco is leveraging its unique position across networking, security, identity and observability to address emerging AI security needs, including agentic AI security, AI Defense, Hypershield and Zero Trust Access. Cisco has also expanded its Secure AI Factory with NVIDIA and announced acquisitions of Galileo and Astrix to strengthen AI identity and agentic security capabilities.
Cisco’s Prospects: Key Catalysts Outweigh ChallengesCisco’s prospects are likely to benefit from accelerating AI networking demand. Continued expansion of Silicon One, Acacia optics and AI switching is expected to support another leg of growth. A strong pipeline of AI infrastructure buildout ($3 billion roughly) across enterprise, sovereign AI and neocloud customers suggests that AI demand is broadening beyond hyperscalers. Cisco believes campus upgrades remain in the early innings as enterprises migrate to Wi-Fi 7, AI-enabled switching and secure networking.
In terms of the Security business, Cisco expects easier comparisons beginning in fiscal 2027 as Splunk’s cloud transition normalizes. Combined with stronger adoption of Hypershield, AI Defense and Zero Trust, Security could become a faster growth contributor. Strong adoption of agentic AI bodes well for Cisco’s prospects. The company believes that agentic AI requires security to be embedded directly into networking infrastructure, an area where Cisco has a competitive advantage over pure networking or standalone cybersecurity vendors.
These positive drivers are expected to help Cisco comfortably navigate challenges related to higher memory prices, Splunk’s cloud transition, stiff competition and heightened AI-related spending.
2026 Earnings Estimate Revisions Positive for CSCOThe Zacks Consensus Estimate for CSCO’s fiscal 2026 earnings is currently pegged at $4.28 per share, up 0.9% over the past 60 days, indicating year-over-year growth of 12.3%.
The consensus mark for CSCO’s fourth-quarter fiscal 2026 earnings is currently pegged at $1.17 per share, up a penny over the past 60 days, indicating year-over-year growth of 18.2%.
CSCO Shares Are Trading at a PremiumCisco shares are trading at a premium, as suggested by the Value Score of F. In terms of the forward 12-month price/sales, CSCO is trading at a premium of 6.83X, higher than the broader sector’s 6.79X and Hewlett Packard Enterprise’s 1.35X.
However, Cisco shares are trading at a discount compared with Arista Networks and Broadcom. In terms of the forward 12-month P/S, Arista Networks and Broadcom shares are trading at 17.8X and 12.18X, respectively.
CSCO Stock’s Valuation
Image Source: Zacks Investment Research
ConclusionDespite trading at a modest premium, Cisco’s improving fundamentals and expanding AI opportunity continue to support a constructive long-term outlook. Strong momentum in AI infrastructure, Silicon One, Acacia optics, campus networking and security, combined with rising earnings estimates and solid execution, provides multiple avenues for sustained growth. CSCO remains an attractive stock for investors seeking long-term exposure to enterprise networking and AI infrastructure driven by durable demand drivers and increasing revenue visibility.
CSCO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
International Business Machines Corp (NYSE:IBM) drew a more cautious outlook from analysts after preliminary second quarter results missed expectations, with Bank of America and UBS citing weaker software and infrastructure demand, shifting customer capital spending priorities and delayed large deals as key challenges for the company.
Bank of America noted that IBM’s preliminary Q2 revenue of $17.2 billion came in below the $17.9 billion consensus estimate, while adjusted earnings per share of $2.93 missed expectations of $3.02. The analysts wrote that the revenue miss was larger than expected, driven primarily by weaker Software and Infrastructure results, although profitability held up better.
The firm highlighted IBM’s comments that customers reprioritized capital expenditures late in the quarter, affecting spending across its portfolio. Bank of America also pointed to execution issues, large deal slippage and cybersecurity concerns among clients as factors contributing to the weaker performance.
IBM’s software business was a major source of weakness, with revenue growth of 5% compared with Bank of America’s expectation for double-digit growth. The analysts noted that Red Hat (NYSE:RHT) performed slightly ahead of expectations, growing 11% year over year, but said the main shortfall appeared to come from transaction processing, which was likely down by a high single-digit percentage. They also pointed to weaker-than-expected organic contributions from IBM’s data and automation offerings.
Infrastructure revenue declined 7%, below IBM’s previous guidance for a low single-digit decline. Bank of America noted that distributed infrastructure performed well, increasing 37% year over year, but said more capital expenditure-sensitive mainframe revenue was weaker than anticipated.
UBS also lowered its estimates following the update, citing softer demand in infrastructure and transaction processing. The firm cut its second-quarter revenue estimate to $17.218 billion from $17.858 billion and reduced its adjusted earnings per share estimate to $2.93 from $3.07.
Both firms lowered their longer-term expectations for IBM. Bank of America wrote that software growth is now tracking below IBM’s previous double-digit outlook and expects mid-single-digit software growth, including acquisitions, along with a mid-single-digit decline in infrastructure revenue.
UBS wrote that the impact of shifting customer capital spending priorities could persist into the second half of 2026 and 2027. The firm lowered its 2026 revenue growth forecast to 3.6% from 5.5% previously and reduced its 2027 growth forecast to 2.7% from 3.1%.
Despite the near-term challenges, Bank of America maintained a ‘Buy’ rating, writing that IBM remains positioned to drive software growth beyond the current disruption.
UBS kept its $236 price target unchanged, noting that its valuation already reflected expectations for 3% to 4% organic growth.
Shares of IBM traded hands at $213, down about 28% in the year to date.
Gary Cohn, IBM vice chairman and former Trump NEC director, joins ‘Squawk on the Street' to discuss Federal Reserve Chairman Kevin Warsh's first semiannual monetary policy testimony to Congress, the outlook for rate cuts, the economic impact of AI, and more.
International Business Machines Corp (NYSE:IBM) drew a more cautious outlook from analysts after preliminary second quarter results missed expectations, with Bank of America and UBS citing weaker software and infrastructure demand, shifting customer capital spending priorities and delayed large deals as key challenges for the company.
Bank of America noted that IBM’s preliminary Q2 revenue of $17.2 billion came in below the $17.9 billion consensus estimate, while adjusted earnings per share of $2.93 missed expectations of $3.02. The analysts wrote that the revenue miss was larger than expected, driven primarily by weaker Software and Infrastructure results, although profitability held up better.
The firm highlighted IBM’s comments that customers reprioritized capital expenditures late in the quarter, affecting spending across its portfolio. Bank of America also pointed to execution issues, large deal slippage and cybersecurity concerns among clients as factors contributing to the weaker performance.
IBM’s software business was a major source of weakness, with revenue growth of 5% compared with Bank of America’s expectation for double-digit growth. The analysts noted that Red Hat (NYSE:RHT) performed slightly ahead of expectations, growing 11% year over year, but said the main shortfall appeared to come from transaction processing, which was likely down by a high single-digit percentage. They also pointed to weaker-than-expected organic contributions from IBM’s data and automation offerings.
Infrastructure revenue declined 7%, below IBM’s previous guidance for a low single-digit decline. Bank of America noted that distributed infrastructure performed well, increasing 37% year over year, but said more capital expenditure-sensitive mainframe revenue was weaker than anticipated.
UBS also lowered its estimates following the update, citing softer demand in infrastructure and transaction processing. The firm cut its second-quarter revenue estimate to $17.218 billion from $17.858 billion and reduced its adjusted earnings per share estimate to $2.93 from $3.07.
Both firms lowered their longer-term expectations for IBM. Bank of America wrote that software growth is now tracking below IBM’s previous double-digit outlook and expects mid-single-digit software growth, including acquisitions, along with a mid-single-digit decline in infrastructure revenue.
UBS wrote that the impact of shifting customer capital spending priorities could persist into the second half of 2026 and 2027. The firm lowered its 2026 revenue growth forecast to 3.6% from 5.5% previously and reduced its 2027 growth forecast to 2.7% from 3.1%.
Despite the near-term challenges, Bank of America maintained a ‘Buy’ rating, writing that IBM remains positioned to drive software growth beyond the current disruption.
UBS kept its $236 price target unchanged, noting that its valuation already reflected expectations for 3% to 4% organic growth.
Shares of IBM traded hands at $213, down about 28% in the year to date.
On July 14, 1789, the people of Paris stormed the Bastille, signaling a violent end to the absolute authority of the ancien régime. Today, on that very same date, (albeit 237 years later) the stock market staged its own financial revolution against the ancien régime of technology: International Business Machines.
IBM shares fell just over $73 to ~$217 — a jaw-dropping 25% single-day decapitation. It is the steepest single-session drop in my lifetime, matching a scale of destruction not seen since January 3, 1968, before I was born.
The catalyst for this sudden coup was a preliminary Q2 sales miss. IBM reported revenue of $17.2 billion, falling short of Wall Street's $17.9 billion expectations, driven by a 7% slide in its infrastructure division. According to CEO Arvind Krishna, enterprise customers shifted their spending away from IBM's traditional products, hoarding cash to buy hardware, servers, and storage to hedge against AI-fueled supply shortages and impending price hikes. While this may be Krishna's own convenient narrative rather than an independently verified trend, the market didn't wait for a trial. The verdict was absolute, and the execution was swift.
But where there is panic, there is premium. In the option pits, the crowd has gathered but hasn't dispersed. Typically, when bad news drops, implied volatility undergoes a rapid "vol crush." Instead, IBM's one-month implied volatility is trading at its 99.6%ile — dwarfing the premium expansion seen during the 2019 Taper Tantrum, the 2022 rate-hike bear market and the various tariff tantrums, exceeded only by the "Pandemic Plunge" in 2020.
IBM, YTD
With the market pricing in absolute chaos, it is time to adopt an "off with their heads" stance on high premiums. Since the stock has already endured a massive 25% structural re-rating, the majority of the downward momentum is likely exhausted. By selling the monthly August 21, 2026, 190/245 short strangle, we can collect a massive premium from terrified buyers, betting that the stock will quietly consolidate within its new post-revolutionary boundaries.
Premium Captured: ~$11.25 per strangle (as of the July 14, 2026, close). This represents a 5.18% standstill yield relative to the underlying stock price in just 38 days.
Downside Breakeven: $178.75 (approx. 17.6% below current price)Upside Breakeven: $256.25 (approx. 18.1% above current price)This trade relies on a wide, symmetrical margin of safety. To breach the lower barrier of $178.75 — a level not visited since early 2024 — IBM would need to drop an additional 18% from its already-shattered state. If forced to take assignment, you are establishing a long position at a steep historical discount. On the upside, reclaiming $256.25 would require IBM to recoup more than half of today's historic sell-off before August expiration, an unlikely feat given the sudden enterprise freeze on software and consulting budgets.
As the dust settles on this Bastille Day blowout, the market has left the gates wide open for option sellers. The news is out, but panic has kept options premiums elevated. For those willing to capture the fear, the short strangle offers a high-probability path to watch the remaining premium slowly bleed away.
The investigation focuses on IBM statements about the potential of IBM Z's 2026 cycle with the z17 program.
, /PRNewswire/ -- July 14, 2026, International Business Machines Corporation (NYSE: IBM) shares fell more than 24% after IBM released preliminary second-quarter results and reduced its near-term revenue and earnings outlook. Investors who lost money in IBM shares are encouraged to act while the investigation is active. Shareholders who suffered losses may submit their IBM loss information now.
SueWallSt notifies investors of a pending investigation into potential securities law violations connected to IBM's public statements regarding the launch of z17 and the overall Z performance. On July 14, 2026, CEO Arvind Krishna indicated that the z17 launch was 'the strongest start to a mainframe program in our history," yet IBM experienced a "shortfall in our Z performance," which was blamed, in part, on clients increasing "capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure."
Previously, during IBM's first quarter fiscal 2026 earnings call on April 22, 2026, BM's Chief Financial Officer, James J. Kavanaugh had praised the resilience of IBM Z, noting clients were investing "to modernize mission-critical workloads, driven by requirements for resiliency, security and compliance, while enabling new AI capabilities on the platform." He further claimed management was "confident this will be our strongest Z cycle given the AI innovation value we are delivering to clients."
If IBM losses affected your portfolio, send your shareholder details to SueWallSt or call (888) SueWallSt.
WHY SUEWALLST: SueWallSt is powered by Levi & Korsinsky LLP. Levi & Korsinsky LLP has established itself as a nationally-recognized securities litigation firm that has secured hundreds of millions of dollars for aggrieved shareholders and built a track record of winning high-stakes cases. The firm has extensive expertise representing investors in complex securities litigation and a team of over 70 employees to serve our clients. For seven years in a row, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report as one of the top securities litigation firms in the United States.
Frequently Asked Questions About the IBM Investigation
Q: Who is eligible to participate in the IBM investigation? A: Investors who purchased IBM stock or securities and suffered financial losses may be eligible. Eligibility is based on purchase timing and documented losses -- not on whether the shares are still held.
Q: Which statements are being investigated as potentially misleading? A: The investigation focuses on IBM statements made on January 28, 2026 about the Confluent acquisition, including expected 2026 dilution of about $600 million and expected accretion to adjusted EBITDA within the first full year after close.
Q: What documents do I need to participate? A: Brokerage statements or trade confirmations showing purchase dates, share quantities, prices paid, and any later sale dates and prices.
Q: What if I already sold my IBM shares -- can I still recover losses? A: Yes. Eligibility is based on when shares were purchased and whether losses were suffered. Investors who bought IBM and sold at a loss may still participate in the investigation.
Q: What if my IBM losses are small -- is it still worth being evaluated? A: Yes. There is no minimum loss amount required to participate in the investigation.
Q: Do I need to go to court or give testimony? A: No. Participating in the investigation does not require court appearances or depositions. If legal action is later pursued, the overwhelming majority of affected investors do not appear in court.
Q: What does it cost me to participate? A: There is no upfront cost to participate. Securities investigations and any resulting actions are generally handled on a contingency basis, with no upfront fees, no retainer, and no out-of-pocket costs.
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Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering UnitedHealth Group (UNH - Free Report) , which belongs to the Zacks Medical - HMOs industry.
When looking at the last two reports, this largest U.S. health insurer has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 6.44%, on average, in the last two quarters.
For the last reported quarter, UnitedHealth came out with earnings of $7.23 per share versus the Zacks Consensus Estimate of $6.46 per share, representing a surprise of 11.92%. For the previous quarter, the company was expected to post earnings of $2.09 per share and it actually produced earnings of $2.11 per share, delivering a surprise of 0.96%.
Price and EPS Surprise
For UnitedHealth, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. 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.
UnitedHealth has an Earnings ESP of +7.71% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #2 (Buy), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on July 16, 2026.
Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Phase 3 Trial Meets Primary Progression-Free Survival GoalThe trial met its primary endpoint of progression-free survival (PFS) for mismatch repair-deficient (dMMR) advanced or recurrent endometrial cancer patients who had not previously received systemic chemotherapy or who experienced recurrence more than six months after completing prior adjuvant therapy.
Keytruda is the first and only PD-1 inhibitor to show a statistically significant and clinically meaningful improvement in PFS as monotherapy compared to platinum doublet chemotherapy for these patients in a Phase 3 trial.
At a pre-specified interim analysis conducted by an independent Data Monitoring Committee, a trend toward improvement in overall survival (OS), the trial’s other primary endpoint, was observed for Keytruda.
However, these OS data were not mature at the time of this analysis.
Overall Survival Data Continue To MatureThe trial is ongoing, and OS for the full study population will be evaluated at a future analysis. The analysis also showed a clinically meaningful overall response rate (ORR), as well as complete response rate (CRR) and duration of response (DOR) for Keytruda.
The safety profile of Keytruda in this trial was consistent with that observed in previously reported studies; no new safety signals were identified.
In the U.S., Keytruda is the only anti-PD-1 therapy with three approved indications for patients with certain types of endometrial cancer.
Last week, the U.S. Food and Drug Administration (FDA) approved Merck’s Keytruda and Keytruda Qlex (pembrolizumab and berahyaluronidase alfa-pmph), each in combination with Padcev (enfortumab vedotin-ejfv), as neoadjuvant treatment. Then it continued after cystectomy as adjuvant treatment for muscle-invasive bladder cancer (MIBC).
These approvals represent the first and only PD-1 inhibitor plus antibody-drug conjugate regimens approved for adults with MIBC regardless of cisplatin eligibility.
MRK Price Action: Merck & Co shares were up 2.43% at $123.71 at the time of publication on Wednesday, according to Benzinga Pro data.
Photo: Shutterstock
Market News and Data brought to you by Benzinga APIs
Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Chevron (CVX - Free Report) , which belongs to the Zacks Oil and Gas - Integrated - International industry, could be a great candidate to consider.
This oil company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 29.41%.
For the last reported quarter, Chevron came out with earnings of $1.41 per share versus the Zacks Consensus Estimate of $0.92 per share, representing a surprise of 53.26%. For the previous quarter, the company was expected to post earnings of $1.44 per share and it actually produced earnings of $1.52 per share, delivering a surprise of 5.56%.
Price and EPS Surprise
Thanks in part to this history, there has been a favorable change in earnings estimates for Chevron lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. 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.
Chevron currently has an Earnings ESP of +0.86%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on July 31, 2026.
Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Key Takeaways ExxonMobil's Permian growth and low shut-in prices support cash flow with WTI near $80 per barrel.Phillips 66 faces higher refining costs, but midstream and chemicals help cushion volatility.ExxonMobil trades below Phillips 66 on EV/EBITDA, yet investors are urged not to rush into either stock. Exxon Mobil Corporation (XOM - Free Report) and Phillips 66 (PSX - Free Report) are two energy giants that investors interested in the oil-energy sector may want to consider, even as another escalation in U.S.-Iran tensions has heightened volatility across the energy markets.
To have an idea of how both stocks have behaved in the past year, ExxonMobil has gained 29.3%, underperforming PSX’s 62.9% surge. Since the pricing chart does not represent the final picture before concluding on investment decisions, let’s delve into both stocks’ business fundamentals.
One-Year Price Chart
Image Source: Zacks Investment Research
Oil Hovers Around $80: Can XOM’s Upstream Business Thrive?ExxonMobil has a massive footprint in the Permian, the most prolific oil and gas play in the United States, and offshore Guyana. In the Permian, the integrated giant has been employing lightweight proppant technology and hence is capable of boosting its well recoveries by up to as much as 20%.
Let’s delve a little deeper into whether operating in the Permian is still profitable for the large integrated energy giant. According to the data from the Federal Reserve Bank of Dallas, the shut-in price for existing wells in the Midland, a sub-basin of the Permian, is $42 per barrel. For Delaware, another sub-basin, the Federal Reserve Bank of Dallas estimated the price at $34 per barrel.
Image Source: Federal Reserve Bank of Dallas
With West Texas Intermediate (“WTI”) crude oil hovering around the $80 per-barrel mark, significantly higher than the shut-in prices, it makes sense for XOM to continue production in the wells and generate cash flows. On the first-quarter earnings call, XOM mentioned that it is staying aligned with its plan of growing its production in the most prolific basin to 1.8 million oil-equivalent barrels this year.
Is High Oil a Dampener for Phillips 66?The high price of oil is not in favor of PSX’s refining business. This is because refiners process crude oil to produce final products like gasoline, jet fuel and others. Hence, with the increase in crude price, their input costs are also surging, in turn affecting the bottom line.
However, investors should also consider the resilient business model of PSX. Although a leading refiner, PSX, unlike most of its refining peers, has diversified the business across midstream and chemicals. Along with investing in refining operations, Phillips 66 is allocating significant capital for midstream.
Midstream business, by its very definition, is stable since the company generates stable cash flows as the assets are being utilized for the long term and is less vulnerable to commodity price volatility. Hence, having a diversified business model, PSX is insulated from commodity price volatility to a great extent.
XOM or PSX: Which is a Better Stock?Considering the valuation snapshot, it has become evident that ExxonMobil is currently trading at a discount compared with PSX. This is reflected in the fact that XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 9.61X, below PSX’s 14.01X.
Image Source: Zacks Investment Research
This means investors are willing to pay a premium for PSX relative to XOM. However, investors shouldn’t rush to bet on either of the stocks now since commodity prices and their trend are now highly difficult to predict, considering the ongoing conflicts between the United States and Iran.
However, those who have already invested in XOM and PSX should stay invested. Both XOM and PSX currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Seabourn's Ruby Collection features 54 voyages in 2028 across its five-ship ocean and expedition fleet, commemorating the line's 40th anniversary, or "Ruby Jubilee." Voyages span the Caribbean, Mediterranean, Southeast Asia, Japan, Alaska, Northern Europe, the Arctic, and Antarctica. They range from seven-day Yachtsman yacht-harbor sailings in the Caribbean and Mediterranean to a 120-day "Cape to Cape" World Cruise and a 96-day Grand Expedition: Pole to Pole. New ports include Taichung and Tainan in Taiwan, and Petersburg, Valdez, and the Chiswell Islands in Alaska, as well as maiden expedition calls at Tvøroyri in the Faroe Islands and Cape Clear Island in Ireland. New and distinctive experiences include Taiwan's Pingxi Sky Lantern Festival, an eight-day pre-cruise Denali Experience in Alaska, and Seabourn's return to the historic Basque port of Red Bay, Canada. All Ruby Collection voyages are now open for booking. , /PRNewswire/ -- Seabourn has revealed "The Ruby Collection," a curated series of 54 voyages in 2028 to commemorate the line's 40th anniversary. Spanning its fleet of five luxury ships, the collection features enhanced onboard offerings, exclusive experiences, and access to destinations where larger ships cannot reach.
From yacht harbors to polar regions, the Ruby Collection commemorates Seabourn’s Ruby Jubilee with Yachtsman sailings, newly designed itineraries and notable voyages Now open for booking, the Ruby Collection spans the Caribbean, Mediterranean, Southeast Asia, Japan, Alaska, Northern Europe, the Arctic, and Antarctica. Notable voyages include: a 120-day "Cape to Cape" World Cruise departing January 7, 2028; the line's second Grand Expedition: Pole to Pole, a 96-day journey from the High Arctic to Antarctica; a Yachtsman Collection of Caribbean and Mediterranean voyages returning to the intimate harbors that inspired the line's founding; and newly curated itineraries designed around seasonal cultural moments in Japan, Southeast Asia, and beyond.
"Some journeys stay with travelers forever," said Mark Tamis, president of Seabourn. "Our own journey began in 1988 when we redefined cruising with the world's first fleet of luxury small ships, designed to feel like private yachts. As we celebrate 40 years of exploration, that same pioneering spirit shapes The Ruby Collection, featuring voyages across our ocean and expedition fleet that reflect where we began while pushing further into the places and experiences that define what exploration means with Seabourn."
The Yachtsman Collection
The Yachtsman Collection revisits the vision that launched The Yachts of Seabourn in 1988: intimate ships built for relaxed elegance and access to harbors beyond the reach of larger vessels. The voyages concentrate on smaller Mediterranean and Caribbean ports, with extended time ashore and unhurried days at sea.
The collection leans on the destinations and events that distinguish Seabourn from larger-ship competitors. Itineraries call at secluded yacht havens including Bequia, Martinique, and British Virgin Islands, and pair coastal exploration in Corsica and Sardinia with signature experiences such as Caviar in the Surf at Carambola Beach, St. Kitts and Shopping with the Chef market visits in select ports. Several sailings build in evening stays, including an overnight in Portofino and time on Pátmos to visit the Monastery of St. John.
In the Caribbean, Seabourn Ovation operates a series of seven- to 14-day yacht-harbor voyages between Sint Maarten and Barbados, among them itineraries through the ABC Islands of Aruba, Bonaire, and Curaçao. Two New Year's itineraries culminate in a New Year's Day Caviar in the Surf celebration as Seabourn Ovation and Seabourn Quest converge at Carambola Beach, St. Kitts.
In the Mediterranean, Seabourn Ovation runs a series of seven-day yacht-harbor sailings across the Aegean Sea, the Côte d'Azur, the Dalmatian Coast, and the islands of Sardinia and Corsica. The itineraries feature Seabourn's signature Marina Day, when the ship's retractable marina opens to the sea for complimentary watersports.
New & Distinctive
From new ports to innovative itinerary combinations, the Ruby Collection features newly designed voyages and experiences created specifically for the Ruby Jubilee, extending Seabourn's reach from the fjords of Greenland to the festivals of Taiwan.
Southeast Asia & Japan
Seabourn Encore sails a series of Southeast Asia and Japan itineraries built around overnights in Shanghai, Osaka, and Kobe, and new Taiwan port calls at Taichung and Tainan. One voyage is timed to Taiwan's Pingxi Sky Lantern Festival, staged after a visit to the mountain town of Shifen, while Shopping with the Chef excursions take guests through regional markets from Nagasaki to Kagoshima. Alaska
Seabourn Encore returns to Alaska with itineraries timed to the extended daylight of the summer solstice, adding maiden calls to Petersburg, Valdez, and the Chiswell Islands. The season offers an eight-day pre-cruise Denali Experience, combining rail travel into Denali National Park, a flightseeing excursion, and a farewell dinner in Juneau. Canada & New England
On Seabourn Quest, a new Canada and New England itinerary marks Seabourn's return to Red Bay, with an overnight in St. John's, Newfoundland, and scenic cruising along the St. Lawrence River. Northern Europe, the Arctic and the Canadian Maritimes
Seabourn Venture and Seabourn Pursuit expand the line's exploration of the North. A round-trip Reykjavík expedition dedicates six days to Svalbard, home to the Arctic's largest concentration of polar bears, with 199 guests aboard. New expedition itineraries linking Iceland and the British Isles add three port calls in the Faroe Islands, including a maiden call at Tvøroyri, along with the capital of Tórshavn and a Zodiac landing at Klaksvík. A maiden call at Cape Clear Island, Ireland, brings guests to the cliffs of Mizen Head. Farther west, expedition voyages trace the Greenland coast to Nanortalik and reach the Torngat Mountains and the Labrador coast. South America & Antarctica
Seabourn's expedition ships extend deeper into the Southern Hemisphere, with itineraries that combine Antarctica with the Juan Fernández Islands and Chilean Fjords, or with the Falklands, South Georgia, and Brazil. A 34-day voyage will cross the Atlantic Ocean, with visits to Port Stanley in the Falkland Islands, South Georgia, and the remote islands of Saint Helena and Tristan da Cunha - the most remote inhabited island in the world - along with scenic cruising from Seabourn Venture around Boatswain Bird Island. The season emphasizes expedition access, with Zodiac and kayak exploration, penguin colonies, and landings on remote Antarctic shores. 2028 Cape to Cape World Cruise
The centerpiece of The Ruby Collection is the 120-Day "Cape to Cape" World Cruise. Departing January 7, 2028, Seabourn Quest will traverse more than 26,000 nautical miles, visiting 58 destinations across 23 countries on five continents, with immersive exploration in destinations such as Antarctica, Easter Island, the Falkland Islands, and Cape Town. The voyage begins with a transit of the Panama Canal, a nod to Seabourn's very first sailing. A 112-day option from Miami to Lisbon is also available.
For the first time, guests will enjoy complimentary expedition-style experiences as part of a World Cruise itinerary, led by an 18-person expedition team. These immersive adventures will be available in Antarctica, Chilean Fjords, and other select locations, bringing guests closer to the continent's stunning landscapes and wildlife.
2028 Grand Expedition: Pole to Pole
In a defining moment for the brand during its 40th anniversary year, Seabourn Venture will once again unite the world's northernmost and southernmost frontiers with a 96-day voyage departing August 16, 2028, sailing from the Arctic to Antarctica across more than 20,500 nautical miles and 147 degrees of latitude. The journey begins in the High Arctic, exploring Ellesmere Island, one of the world's northernmost and most remote frontiers. Along the way, guests experience wildlife sightings and expedition landings across 14 countries and territories, including five days in Antarctica, three in South Georgia, and three in the Falkland Islands. An 82-day Arctic to Antarctica option is also available, departing August 30, 2028.
Returning Favorites
The Ruby Collection also brings back guest favorites that have anchored the Seabourn experience for nearly four decades. Baltic itineraries return alongside established routes across Alaska, the British Isles, Southeast Asia, and Antarctica, from the glacier-lined Inside Passage and the Scottish Isles to the Northwest Passage and the wildlife-rich waters of South Georgia and the Falkland Islands.
Exclusive: The Atlantic
In 2028, as Seabourn celebrates its 40th anniversary, the line debuts a first-of-its-kind collaboration with The Atlantic, inspired by their annual Atlantic Festival. The "12-Day with The Atlantic: A Seabourn Conversations Exclusive" sailing departs October 4, 2028, on Seabourn Quest from Montréal to Boston, bringing leading thinkers and cultural voices on board for dynamic programming curated exclusively for Seabourn guests, with rare opportunities for direct dialogue at sea. As part of the Ruby Jubilee, this partnership expands Seabourn's flagship Seabourn Conversations enrichment program.
Celebrating 40 Years on Every Sailing
Throughout 2028, every Seabourn sailing will feature special onboard enhancements inspired by the Ruby Jubilee, from specialty events and signature celebrations to themed entertainment and enrichment inspired by eras past. The Ruby Collection voyages will feature additional celebratory touches designed to bring Seabourn's 40-year story to life on board. Seabourn will share additional details as they become available.
Frequently Asked Questions
What is the Ruby Collection?
The Ruby Collection is a series of 54 voyages sailing in 2028 to mark Seabourn's 40th anniversary, or Ruby Jubilee. It spans the line's five-ship ocean and expedition fleet and brings together heritage-inspired Yachtsman sailings, newly designed itineraries and ports, returning guest favorites, and landmark voyages including the "Cape to Cape" World Cruise and the Grand Expedition: Pole to Pole.
What voyage lengths are available?
Voyages range from seven-day yacht-harbor sailings in the Caribbean and Mediterranean to a 120-day World Cruise and a 96-day Grand Expedition, with a wide range of ocean and expedition itineraries in between.
Where do the voyages travel?
Itineraries span the Caribbean, Mediterranean, Southeast Asia, Japan, Alaska, Northern Europe, the Arctic, and Antarctica, with new ports in Taiwan, Alaska, the Faroe Islands, and Ireland.
What is included on board?
Seabourn voyages are all-inclusive, with all-suite oceanfront accommodations, complimentary premium spirits and fine wines, gratuities included, and signature events such as Caviar in the Surf, Marina Day, and Shopping with the Chef.
For reservations or more details, please call Seabourn at 1-800-929-9391, visit www.seabourn.com or contact a professional travel advisor.
About Seabourn:
Seabourn represents the pinnacle of luxury ocean and expedition travel and operates a suite of five modern ships. The all-inclusive, boutique ships offer all-suite accommodations with oceanfront views; award-winning dining; complimentary premium spirits and fine wines available at all times; renowned service provided by an industry-leading crew; a relaxed, sociable atmosphere that makes guests feel at home; a pedigree in expedition travel through the Ventures by Seabourn program and two new luxury purpose-built expedition ships, including Seabourn Venture that launched in 2022 and Seabourn Pursuit in 2023. Seabourn takes travelers to every continent on the globe, visiting more than 400 ports including marquee cities and lesser-known ports and hideaways. Guests of Seabourn experience extraordinary offerings and programs, including partnerships with leading entertainers, dining, personal health and wellbeing, and engaging speakers.
Seabourn is part of Carnival Corporation, the world's largest cruise company with a portfolio of cruise lines operating in over 800 ports and destinations worldwide. (NYSE: CCL).
Find Seabourn on X, Facebook, Instagram, YouTube and Pinterest.
Apple's (AAPL +4.05%) lawsuit against OpenAI has consequences that go beyond the two companies and raise questions for investors in Oracle (ORCL +4.49%) and Microsoft (MSFT +3.09%). Both companies have significant ties to OpenAI, and those ties are arguably why the two stocks have notably underperformed this year.
The consumer electronics giant alleges that OpenAI stole trade secrets from Apple and instructed staff hired from Apple on how to do so. These are serious allegations, and while they are focused on the hardware side (OpenAI is believed to be developing a device that could challenge the iPhone in the future), they could materially impact OpenAI's reputation, position in Apple's ecosystem, its nascent hardware business, and its intended initial public offering (IPO).
Image source: Getty Images.
Oracle and Microsoft Fleshing out the last point, the chart below shows the underperformance of Oracle and Microsoft compared to the other leading hyperscalers, Alphabet, Amazon.com, and IBM. Clearly, this isn't just a question of the market turning skeptical over the rising cost of the artificial intelligence (AI) infrastructure build-out.
Data by YCharts
It's not just an issue for equity markets, as Oracle's credit default swap (CDS) pricing (the cost of insuring against a default in Oracle bonds) soared after the announcement of a $300 billion deal with OpenAI last year and hasn't come down since. In addition, the credit rating agency S&P Global Ratings recently downgraded Oracle's debt to a BBB- rating, the lowest tier of investment-grade debt.
Part of the reason for the ratings downgrade is the key credit risk for Oracle tied to the OpenAI deal. According to S&P Global Ratings' estimate, "OpenAI makes up roughly half of the $638 billion" of Oracle's remaining performance obligations (RPO).
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Microsoft's exposure to OpenAI is also significant. On an earnings call in January, Microsoft's management disclosed that 45% of its commercial RPO comes from OpenAI. Moreover, according to its most recent 10-Q filing, Microsoft holds an investment of about 27% in OpenAI. Based on the last OpenAI funding round, that share could be worth about $230 billion, or about 8% of Microsoft's current market cap of $2.9 trillion.
Where next for AI stocks? The developments at OpenAI are concerning, not least as it's such an important part of the AI industry. That said, it's unclear where this case will end up, and there are plenty of ways to invest in AI outside of Oracle, Microsoft, and the OpenAI IPO, whenever that happens, if you want to avoid the risk that OpenAI won't meet its earnings and cash-flow expectations.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, International Business Machines, Microsoft, Oracle, and S&P Global. The Motley Fool has a disclosure policy.
As data processing needs accelerate in 2026, many investors are deciding whether Digital Realty Trust (DLR +0.99%) or Equinix (EQIX 0.48%) is the better buy for long-term growth in the technology infrastructure space.
Digital Realty Trust provides massive data center solutions primarily for cloud and information technology service providers. Equinix operates a vast ecosystem that prioritizes interconnection, enabling more than 10,500 customers to connect their networks. Both companies operate as Real Estate Investment Trusts, offering exposure to essential technology through physical property ownership.
Digital Realty Trust sells colocation and interconnection solutions to a global customer base spanning finance, healthcare, and energy. It operates 309 data centers and recently expanded by acquiring a majority stake in several large data centers in Northern Virginia. To capitalize on its expanding development pipeline, the company recently completed a 12.3 million share secondary equity offering and acquired 1,440 acres near Kansas City.
For the fiscal year 2025, revenue reached nearly $6.1 billion, representing a 10.0% increase over the previous year. Net income for the period was nearly $1.3 billion, which was a significant increase from the roughly $602.5 million reported in the prior year. This resulted in a net margin of approximately 21.4% for the fiscal year 2025.
As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 1.1x. This metric measures total debt against shareholder equity, with a lower number typically indicating less reliance on borrowed funds. The current ratio, which measures the ability to cover short-term obligations with short-term assets, was approximately 4.5x. Free cash flow reached nearly $2.4 billion, representing the cash remaining after the company paid for capital expenditures. This liquidity supports the company's long-term real estate investing strategy.
The case for EquinixEquinix manages 280 data centers across 36 countries, focusing on interconnection services that help enterprises deploy hybrid cloud environments. It serves a diverse group of customers, including Nvidia (NVDA 0.69%) and Cisco (CSCO 4.23%), with no single client accounting for more than 10% of total revenue. In 2026, the firm emphasized the deployment of artificial intelligence through several high-profile partnerships and the planned acquisition of Nordic operator atNorth.
During FY 2025, the company generated revenue of approximately $9.3 billion, a growth of nearly 5.9% compared to the prior year. Net income for the fiscal period was roughly $1.4 billion, rising from the $815.0 million earned in the previous fiscal year. This translated to a net margin of close to 14.6% for the year.
According to the December 2025 balance sheet, Equinix had a debt-to-equity ratio of roughly 1.6x. The current ratio was approximately 1.3x, suggesting a narrower margin for covering short-term liabilities than its peers. For the fiscal year 2025, free cash flow was negative at nearly $400.0 million. This figure reflects significant cash spent on capital projects, exceeding cash generated from operations, as the company continued to build out its global platform.
Risk profile comparisonDigital Realty Trust faces risks due to its reliance on third-party utility providers for power and connectivity. Grid constraints and price volatility can impact the uptime of its data centers. The company also faces the risk of facility obsolescence as rapid advancements in artificial intelligence infrastructure increase power density requirements. Integrating large acquisitions, such as those involving Blackstone assets, carries risks of hidden liabilities. Furthermore, with close to $18.6 billion in debt, the firm is sensitive to interest rate fluctuations.
Equinix addresses potential bottlenecks in the AI supply chain, where shortages of specialized semiconductors may delay server deployments for customers such as Amazon. Rising global energy costs and constrained power grids also threaten its expansion capacity in high-demand regions. The company remains a target for sophisticated cybersecurity threats, including those driven by artificial intelligence. Equinix must also manage the complex integration of international acquisitions. Finally, ongoing litigation and securities class-action investigations could consume management resources and damage the firm's reputation.
Valuation comparisonEquinix trades at a lower forward P/E of nearly 58.9x based on future earnings estimates, while Digital Realty Trust carries a higher P/S ratio of 10.3x.
MetricDigital Realty TrustEquinixSector BenchmarkForward P/E85.5x58.9x32.7xP/S ratio10.3x10.8xSector benchmark uses the SPDR XLRE sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?Digital Realty and Equinix are both giants in the world of interconnected data centers, though they offer different business strategies. Both are benefiting from the massive AI build-outs. So which one is a better investment?
Equinix is the premier global interconnection and colocation provider. That means it builds gigantic data centers full of fiber-optic cables and server racks, then rents out the space to thousands of customers. Its focus on connectivity rather than square footage helps it earn higher margins. However, its valuation is high relative to its earnings, with much of its predicted upside already priced in.
Digital Realty takes a different approach. As a real estate investment trust (REIT), it owns data center campuses and leases them to major customers such as Amazon (AMZN +2.91%), Microsoft (MSFT +3.09%), and Alphabet (GOOGL +3.55%) (GOOG +3.91%) under long-term contracts. Those leases help generate predictable cash flow, and because REITs must distribute at least 90% of their taxable income as dividends, shareholders receive a higher yield than they would from Equinix.
If I had to choose one of these companies, I would select Digital Realty because its REIT structure and higher dividend make it an appealing source of passive income. But considering both companies' premium valuations, I would prefer to build a position gradually rather than buy in all at once.
Key Takeaways Block's 19% YTD gain has outpaced peers, driven by Cash App and Square momentum. XYZ is expanding BNPL, AI commerce and partnerships to drive user and merchant growth. Block faces rising credit losses, intense competition and macro risks that could pressure growth. Block (XYZ - Free Report) shares have gained 26.6% year to date, which can be attributed to the combined strength of its Square merchant ecosystem and Cash App consumer platform. The rally also reflects the strength of its AI implementations, which have improved customer engagement, as well as strategic partnerships that have expanded distribution opportunities.
XYZ stock has not only outperformed its peers, such as Affirm (AFRM - Free Report) and StoneCo Ltd. (STNE - Free Report) , but has also outperformed the S&P 500 composite over the same time frame. Year to date, Affirm shares have gained 9.6%, while StoneCo shares have declined 24%.
However, the question remains whether Block’s fundamentals are sufficient to gain momentum now, or a challenging macroeconomic environment could jeopardize its growth tempo. Here, we analyze XYZ in detail to determine whether it will be prudent enough to buy the stock for now, hold or fold.
Image Source: Zacks Investment Research
What’s Supporting Block’s Progress?Cash App has been a key contributor to Block’s momentum, evolving well beyond its origins as a peer-to-peer payments platform. It now operates as a comprehensive financial platform, particularly for younger, digitally native consumers. By offering services across payments, banking, commerce and bitcoin transactions, Cash App continues to deepen its role in users’ everyday financial activities.
Growth in Primary Banking Actives also remained strong, supporting continued momentum for the Cash App Card in the first quarter. In March 2026, Cash App Primary Banking Actives increased 18% year over year to 9.7 million, reflecting sustained gains in user engagement. While the company expects a slight seasonal sequential decline in the second quarter compared with the first, it still anticipates continued year-over-year growth in Primary Banking Actives.
In early June, Block announced the launch of Afterpay on Cash App Card, making Buy Now, Pay Later (“BNPL”) available to eligible Cash App Card customers. The feature targets American earners with variable incomes and customers who are underserved by the current financial system. It is being rolled out to Cash App’s roughly 59 million monthly transacting active users. Block stands to benefit from increased card usage and merchant volume while capturing BNPL fees.
Square, Block’s merchant business, continues to perform well, posting double-digit gross payment volume (GPV) growth in first-quarter 2026. Innovations like the next generation of Square Register also highlight the company’s efforts to keep Square competitive in the evolving point-of-sale and software landscape. Square is expanding its AI commerce strategy with a new ChatGPT app and Claude plugin. The initiative is designed to help sellers appear when customers ask AI assistants where to eat, shop or book services, while enabling users to place orders directly through those AI experiences. The initial rollout covers U.S. food and beverage sellers using Square Online Ordering.
Block is expanding its partner base to scale its distribution network. Last month, Sherwin-Williams selected Square as its payment solutions partner for its extensive network of PRO+ customers through the Digital Alliance Program. Additionally, the company partners with more than 140 independent sales organizations (ISOs) to complement its direct sales and extend reach to new sellers. Its merchant wins, including Ladurée Canada, Sofive Soccer Centers, Coffee Dose and Baker St Café, demonstrate its growing penetration across restaurants, specialty food, sports centers and retail businesses.
What Hinders Block Stock's Performance?Despite its strengths, Block faces material headwinds. The company’s performance remains vulnerable to macroeconomic fluctuations and changes in consumer spending patterns. As a result, external forces may play a larger role than internal execution in shaping its trajectory in the upcoming quarters.
Cash App Borrow, Afterpay and Square Loans increase Block’s exposure to consumer and merchant credit risk as the lending portfolio scales. In first-quarter 2026, transaction, loan and consumer receivable losses rose to $500 million from $170 million a year earlier, reflecting rapid growth in Cash App Borrow originations and scaling of Afterpay Post-Purchase.
The company operates in crowded, fast-moving markets across merchant acquiring, POS/ software, consumer wallets and BNPL, where feature and pricing parity can change quickly. If competitors match features or undercut pricing, or if seller and consumer behavior shifts, Block may need to reinvest incremental gross profit to defend share, limiting the pace of operating leverage even when volume growth remains healthy.
XYZ’s Earnings Estimate Revision Trends UpwardThe Zacks Consensus Estimate for Block’s 2026 sales calls for a year-over-year rise of 8.08%, while that for earnings per share (EPS) suggests a 64.56% increase year over year. EPS estimates have been trending upward to $3.90 per share over the past month.
Image Source: Zacks Investment Research
XYZ Shares Trade at a DiscountIn terms of forward 12-month Price/Earnings (P/E), Block is trading at 25.97X, which is at a discount to Affirm’s 47.59X.
Image Source: Zacks Investment Research
Final Take on BlockBlock is reinforcing its status as a leading fintech innovator through the steady expansion of the Square and Cash App ecosystems, reflecting the company’s strong execution.
While macroeconomic headwinds, changes in consumer spending, rising credit risk and competition warrant caution, Block’s discounted valuation, positive earnings estimates and solid fundamentals make XYZ stock an attractive buy for patient investors.
At present, Block carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In "long context," investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at M&T Bank Corporation (MTB - Free Report) , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. M&T Bank Corporation currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?Let's discuss some of the components of the Momentum Style Score for MTB that show why this company shows promise as a solid momentum pick.
A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For MTB, shares are up 1.45% over the past week while the Zacks Banks - Major Regional industry is up 1.35% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 5.91% compares favorably with the industry's 5.91% performance as well.
While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Shares of M&T Bank Corporation have increased 10.48% over the past quarter, and have gained 22.59% in the last year. On the other hand, the S&P 500 has only moved 8.52% and 21.6%, respectively.
Investors should also pay attention to MTB's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. MTB is currently averaging 1,056,760 shares for the last 20 days.
Earnings OutlookThe Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with MTB.
Over the past two months, 2 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost MTB's consensus estimate, increasing from $18.62 to $18.81 in the past 60 days. Looking at the next fiscal year, 4 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom LineTaking into account all of these elements, it should come as no surprise that MTB is a #2 (Buy) stock with a Momentum Score of B. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep M&T Bank Corporation on your short list.
SummaryM&T Bank delivered strong Q2 2026 results, beating EPS and revenue expectations despite macroeconomic headwinds.MTB's net interest margin remained robust at 3.70%, with management guiding 2026 net interest income of $7.2–$7.35 billion.Loan growth was healthy, led by commercial, industrial, and real estate segments, while deposit levels stabilized with only a minor sequential dip.Asset quality improved, net charge-offs declined, and shareholder returns were enhanced through $465 million in buybacks and a 2.5% dividend yield.Looking for a helping hand in the market? Members of BAD BEAT Investing get exclusive ideas and guidance to navigate any climate. Learn More » JHVEPhoto/iStock Editorial via Getty Images
In today’s column, we pick back up our early earnings season regional bank coverage with M&T Bank (MTB). As a reminder, M&T Bank is one of the larger regional players in our coverage universe. While a few smaller players have
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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in MTB over the next 72 hours. 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.
M&T Bank Corporation (MTB) Q2 2026 Earnings Call July 15, 2026 8:00 AM EDT
Company Participants
Steven Wendelboe - Senior Vice President of Investor Relations
Daryl Bible - Senior EVP & CFO
Conference Call Participants
Manan Gosalia - Morgan Stanley, Research Division
L. Erika Penala - UBS Investment Bank, Research Division
John Pancari - Evercore ISI Institutional Equities, Research Division
Gerard Cassidy - RBC Capital Markets, Research Division
Kenneth Usdin - Bernstein Autonomous LLP
Ebrahim Poonawala - BofA Securities, Research Division
Matthew O'Connor - Deutsche Bank AG, Research Division
David Chiaverini - Jefferies LLC, Research Division
Christopher McGratty - Keefe, Bruyette, & Woods, Inc., Research Division
Presentation
Operator
Welcome to the M&T Bank Second Quarter 2026 Conference Call. [Operator Instructions]
Please be advised that today's conference is being recorded.
I would now like to hand the conference over to Steven Wendelboe, Senior Vice President of Investor Relations. Please go ahead.
Steven Wendelboe
Senior Vice President of Investor Relations
Thank you, Chelsea, and good morning. I'd like to thank everyone for participating in M&T's Second Quarter 2026 Earnings Conference Call. If you have not read the earnings release we issued this morning, you may access it along with the financial tables and schedules by going to our Investor Relations website at ir.mtb.com.
Also, before we start, I'd like to mention that today's presentation may contain forward-looking information. Cautionary statements about this information are included in today's earnings release materials and in the investor presentation as well as our SEC filings and other investor materials. The presentation also includes non-GAAP financial measures as identified in the earnings release and investor presentation. The appropriate reconciliations to GAAP are included in the appendix.
Joining me on the call this morning is M&T's Senior Executive Vice President and CFO, Daryl Bible. Now I'd like to turn the call over to Daryl.
DaVita Inc. has more than doubled in share price within six months, driven by a strong Q1 '26 beat and a favorable court ruling. DVA fundamentals and long-term prospects remain largely unchanged, with 2026E AEPS recovery now expected at 30%+ and 10–16% annualized growth through 2028. I sold over 95% of my DVA position as the valuation exceeded $210/share, far above my fair value target of $130/share.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Two of the market’s most talked-about AI plays sit on very different footings this summer. Palantir (NASDAQ:PLTR | PLTR Price Prediction) has cooled after a torrid run, while AMD (NASDAQ:AMD) has ripped higher on accelerating Data Center demand.
Our proprietary model has a buy on both, but the upside profiles differ meaningfully. Our 24/7 Wall St. price target for PLTR is $161.23, implying 20.57% upside from $133.72. For AMD, the 24/7 Wall St. price target is $605.85, or 10.53% above $548.13. Confidence on both at 90%.
Metric PLTR AMD Current Price $133.72 $548.13 24/7 Wall St. Price Target $161.23 $605.85 Upside 20.57% 10.53% Recommendation BUY BUY Confidence 90% 90% How Palantir and AMD Got Here in 2026 Palantir is down 24.77% year to date and 10.35% over one year, well off its 52-week high of $207.52. Q1 2026 revenue hit $1.63 billion, up 84.7% YoY, with adjusted EPS of $0.33 beating estimates for the eighth straight quarter. CEO Alex Karp raised full-year guidance to 71% growth and touted a Rule of 40 score of 145%.
AMD is the opposite: up 155.94% YTD and 274.82% over one year. Q1 2026 revenue reached $10.25 billion (+37.85%), with Data Center contributing $5.78 billion (+57%). Q2 guidance calls for roughly $11.2 billion.
The Bull Case for Both AI Names PLTR bulls point to the $3.22 billion U.S. Commercial revenue guide (+120%), 46% GAAP operating margins, and $4.2 to $4.4 billion in projected adjusted free cash flow. Our bull-case one-year target is $203.13, a 51.91% return.
AMD bulls cite hard commitments: OpenAI’s 6GW deployment, Meta’s 1GW MI450 rollout, and Oracle’s 27,000-node cluster. Our AMD bull case reaches $636.61, or 16.14%.
What Could Go Wrong For Palantir, valuation is the elephant. A trailing P/E near 143 leaves no cushion, and Polymarket traders assign only 61.5% odds to closing above the current level this week. Our bear case sits at $141.58. Bulls counter that high stock-based compensation ($201.6 million in Q1) reflects growth-stage hiring.
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AMD’s downside is dominated by China export uncertainty on MI308 and NVIDIA’s grip on the AI accelerator market. Our AMD bear case is $464.38, a 15.28% loss. Wall Street is bullish on the stock. Rosenblatt raised the firm’s price target on AMD to $665 from $490 and keeps a Buy rating on the shares while UBS analyst Timothy Arcuri raised the price target to $700 from $670 and keeps a Buy rating.
How PLTR and AMD Stack Up Against NVIDIA and Snowflake NVIDIA (NASDAQ:NVDA) is the natural yardstick for AMD. NVIDIA posted Q1 FY27 revenue of $81.6 billion (+85.2%), and trades at a P/E of roughly 43. AMD’s 185 trailing multiple makes our AMD target look aggressive on absolute valuation but reasonable given AMD’s earnings ramp is still early.
Snowflake (NYSE:SNOW) is the closer read on PLTR. Snowflake grew Q1 FY27 revenue 33.5% to $1.39 billion with a 126% net retention rate, yet trades at a market cap under $100 billion versus Palantir’s roughly $311 billion. Palantir’s premium is earned by faster growth and 46% margins, making our $161.23 target appropriate.
Our Verdict on PLTR and AMD Our 24/7 Wall St. price target model is constructive on both: $161.23 on PLTR (Buy, 90% confidence) and $605.85 on AMD (Buy, 90% confidence).
The PLTR thesis strengthens if U.S. Commercial keeps compounding above 120%. The AMD thesis weakens if MI450 customer forecasts slip or China restrictions tighten.
Year PLTR Target AMD Target 2026 $161 $606 2027 $179 $647 2028 $198 $695 2029 $217 $740 2030 $236 $788 These projections assume both companies execute on current AI-driven growth trajectories. Meaningful upside or downside could come from a China export-control resolution for AMD or sustained triple-digit U.S. Commercial growth at Palantir.
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Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Bristol Myers Squibb (BMY - Free Report) , which belongs to the Zacks Medical - Biomedical and Genetics industry.
This biopharmaceutical company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 9.64%.
For the last reported quarter, Bristol Myers came out with earnings of $1.58 per share versus the Zacks Consensus Estimate of $1.44 per share, representing a surprise of 9.72%. For the previous quarter, the company was expected to post earnings of $1.15 per share and it actually produced earnings of $1.26 per share, delivering a surprise of 9.57%.
Price and EPS Surprise
With this earnings history in mind, recent estimates have been moving higher for Bristol Myers. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its nice Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. 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.
Bristol Myers has an Earnings ESP of +0.86% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on July 30, 2026.
Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.
Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
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The Direxion Daily Semiconductor Bear 3X Shares (NYSEARCA:SOXS) is up again today, climbing roughly 11% as memory chip stocks lead a broad semiconductor pullback. The move is a mirror image of what is happening under the hood: Micron Technology (NASDAQ:MU | MU Price Prediction) is down about 8% intraday and SK Hynix (NASDAQ:SKHY) is down 11%, dragging the Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ) down with them, and SOXS is designed to deliver three times the daily inverse of that basket. So, when chips are down by a certain amount, SOXS is generally up about 3x that (and vice versa).
The Trigger: A Chinese DRAM IPO Reprices the Competitive Map According to reporting from Barron’s, Chinese memory maker CXMT (ChangXin Memory Technologies) is set to begin taking orders for a listing on Shanghai’s STAR Market, aiming to raise roughly $8.5 billion, nearly double its initial target, at an implied market capitalization over $80 billion. That is a much larger war chest than investors expected for the country’s leading DRAM producer.
Why it lands so hard on Micron and SK Hynix: DRAM is a near-oligopoly. Three companies, Micron, Samsung, and SK Hynix, have historically controlled the bulk of global supply. CXMT is the world’s fourth-largest DRAM manufacturer, with DRAM share that roughly tripled year over year to about 8% in Q1, per Counterpoint Research. That is still well behind Micron at around 22% DRAM share, but the direction of travel is what spooked memory investors this morning. A well-funded fourth player with a mandate to keep expanding capacity is exactly what a supply-constrained market does not want to see.
There is an important limit that keeps this from being an existential threat. CXMT is constrained by US sanctions that curb its access to the most advanced chipmaking equipment, so it cannot easily supply US customers or produce the most advanced high-bandwidth memory (HBM) that powers AI servers. HBM is the fastest-growing, highest-margin corner of DRAM, and it remains the domain of Micron and the two Korean incumbents. Still, more Chinese standard-DRAM supply pressures pricing across the industry, and Micron generates the large majority of its revenue from DRAM, including HBM.
Why the Selloff Is Notable Given Micron’s Fundamentals The competitive-share worry is hitting a stock that has been one of the year’s biggest AI beneficiaries. Micron is up roughly 245% year to date and about 730% over the past year, and the company most recently reported fiscal Q3 2026 revenue of $41.46 billion, up 346% year over year, with non-GAAP EPS of $25.11. CEO Sanjay Mehrotra said the results “reflect the strategic value of memory in the AI era” and guided Q4 revenue to $50 billion, plus or minus $1 billion, with gross margin near 86%. The stock carries a market capitalization of roughly $1 trillion and trades at about 6 times forward earnings, with a consensus analyst price target of $1,486. The fundamental picture remains intact. What changed today is the perceived competitive slope.
SK Hynix just listed in the USA as an ADR; its price is suffering today from the same DRAM competition fears plus profit-taking after a strong memory rally. When the two largest DRAM suppliers by market value both drop together, the semiconductor index has nowhere to hide, and that is precisely the setup SOXS is built to profit from on a single-day basis.
The Leverage Warning: SOXS Is a Short-Term Tactical Vehicle Today’s pop is dramatic, but it sits inside a brutal trend. Even with today’s pop and an amazing one-month return of over 1,000%, SOXS is still down 22% YTD, 66% over the last year, and 99.7% over the last five years, per Yahoo Finance.
Leveraged and inverse funds compound daily, which means a choppy but rising underlying index produces significant volatility drag on the inverse side. SOXS amplifies moves in both directions, and over any period longer than a single session the path matters as much as the destination. It is a short-term tactical vehicle for traders who want to press a specific view on chips over hours or days, or a hedging overlay for a semiconductor-heavy book. For anyone thinking about the AI hardware trade over a longer horizon, 24/7 Wall St. maintains a broader look at the names driving it in its 7 Stocks Powering the AI Boom research.
What to Watch Next The near-term question for memory stocks like Micron and SK Hynix, and therefore SOXS, is whether the CXMT overhang is a one-day repricing or the start of a rerating of DRAM’s supply outlook. Micron’s HBM franchise, where the company noted HBM4 in high-volume shipments and HBM4E targeting calendar 2027 volume production, remains outside CXMT’s reach under current export controls. If pricing on standard DRAM holds and HBM demand from AI accelerator makers stays firm, today’s move looks more like a sentiment shock than a fundamentals event. If Chinese capacity ramps faster than expected, the memory cycle’s next leg gets more complicated, and vehicles like SOXS will keep drawing tactical flows on the down days.
Contact [email protected] for any questions or corrections.
Over the past 12 months, Micron Technology (MU 6.99%) has been one of the hottest stocks in the stock market. It's up around 680% in that span, far outperforming every major U.S. index and all the "Magnificent Seven" stocks as of July 13. It's currently valued at around $1.05 trillion (the 15th most valuable public company in the world), but at its peak, its valuation reached $1.37 trillion.
Despite Micron's current momentum (up 193% this year), there's another popular tech stock that I'd invest in before Micron, even though Micron's returns are more than 28 times higher over the past year: Nvidia (NVDA 0.58%). It's been a "down" year for Nvidia so far -- it's only up 8% year to date -- but I like its long-term appeal more than Micron's right now.
Image source: The Motley Fool.
What Micron has working in its favor Micron is a memory and storage chip company that has found itself in the right place at the right time. As major AI hyperscalers -- such as Amazon, Microsoft, and Alphabet -- have spent (and plan to continue spending) billions building out data centers, companies that make the hardware that populates those data centers have seen surges in demand.
One key piece of hardware is the memory chips that Micron makes. Unfortunately for the AI hyperscalers, the sudden increase in demand has far outweighed the current supply of these chips. Fortunately for Micron, the supply-demand imbalance has allowed it to jack up prices and noticeably increase its profitability and margins.
In its most recent quarter (ended May 28), Micron's revenue increased 346% year over year to $41.5 billion, and its net income increased 1,398% to $28.2 billion.
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What Nvidia has working in its favor Nvidia's graphics processing units (GPUs) are the go-to chips in the AI world. These units, and its software system, are why Nvidia is crucial to the AI ecosystem. It's also why its valuation has soared over the past few years, and it now sits as the world's most valuable public company, with a market cap of over $4.9 trillion.
Since the current AI infrastructure build-out began, Nvidia has had a virtual monopoly on AI accelerator chips, and it has transformed its business. In its latest quarter (ended April 26), Nvidia made $81.6 billion in revenue, up 85% from the same quarter last year. Of that $81.6 billion, $75.2 billion (92%) came from its data center segment.
Data center hardware and software are now Nvidia's bread and butter, but it still has a presence in gaming and robotics that keeps it somewhat diversified.
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Why I would go with Nvidia over Micron Although Micron is undoubtedly the hotter stock right now, it's important to remember just how cyclical the memory hardware industry can be. The industry is riding high right now because of supply-demand imbalances, but that won't always be the case. Micron alone is spending around $27 billion this year to build out new facilities to ramp up production.
Once supply inevitably catches up to demand -- especially as competitors like SK Hynix and Samsung Electronic also ramp up supply -- Micron is likely to see its pricing power significantly reduced.
Nvidia's business isn't foolproof by any means. Major companies like Amazon, Microsoft, and Alphabet are beginning to develop their own advanced AI chips to reduce their dependence on Nvidia, but Nvidia is much more than just its chips. It has managed to build a full-stack ecosystem that includes software that developers have grown accustomed to. Jumping ship from Nvidia's ecosystem isn't easy or cheap.
With a valuation near $5 trillion, it would be much tougher for Nvidia to double in value than it would be for Micron, but I believe Micron has a much higher chance of a correction than Nvidia does. My preference for Nvidia has just as much to do with its long-term trajectory as it does with limiting potential downside.
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$8.5 billion. That is what Chinese memory maker ChangXin Memory Technologies, or CXMT, is set to raise in its Shanghai STAR Market listing, nearly double its initial target, at an implied market cap near $85.5 billion. The proceeds represent an incoming war chest, not yet in the bank, earmarked to expand production of the same commodity DRAM chips that make up a huge portion of Micron Technology (NASDAQ:MU | MU Price Prediction)’s business.
What It Means Micron is a DRAM company first. CXMT’s DRAM market share roughly tripled year over year to about 8% in the first quarter, per Counterpoint Research, still well behind Micron’s roughly 22%, but a triple in a year is still an amazing trajectory. That’s unnerving investors, especially as the fresh capital should enable CXMT to invest in further closing the gap. Commodity DDR4 and DDR5 used in PCs, servers, and smartphones is exactly where a well funded Chinese entrant can press hardest, and it is exactly the pool Micron swims in outside the United States.
Of course, it’s worth noting that CXMT is subject to US sanctions that curb its access to the most advanced chipmaking equipment, which limits its ability to supply US customers and to make the most advanced high-bandwidth memory (HBM) that powers AI servers. That caps the near-term damage. It does not eliminate the pressure on standard DRAM pricing that Micron needs to hold to defend the fat margins it just printed.
How fat? Q3 FY26 came in at $41.5 billion in revenue, non-GAAP EPS of $25.11, and GAAP gross margin of 84.6% versus 37.7% a year ago. Operating income ran $33.3 billion. Those margins are the prize CXMT is aiming at, even if it never touches HBM.
Market Reaction Not surprisingly, Micron traded down sharply on the news, with shares off 7% as of the time of this writing. The move is not solely about CXMT. Memory names sold off across the board (SK Hynix’s (NASDAQ:SKHY) US-listed ADR is down 9% on the day as well) as traders locked in a strong run, but the DRAM competition headline sat squarely at the center of the narrative.
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Part of the problem here is that Micron is up over 240% year to date and 730% over one year as of yesterday. A rerating of that scale needs the fundamentals to keep sprinting. Q4 guidance says they will: $50 billion ± $1 billion in revenue and non-GAAP EPS of $31.00 ± $1.00. That guidance assumes DRAM pricing holds. A better-funded CXMT is a direct threat to that assumption in the commodity segment where Micron cannot hide behind HBM.
Then look at the capital intensity of Micron’s own defense. Capital expenditures hit $7.8 billion in Q3 alone, up 166.37% year over year. CEO Sanjay Mehrotra framed it directly: “Micron is investing at record levels in technology, products and supply to address our customers’ rapidly growing demand.” Record capex is the price of staying ahead. It is also the number that CXMT’s IPO proceeds are designed to match on the low end of the technology ladder. The AI leg of the story hinges on a small number of buyers whose orders can flex.
SK Hynix looks insulated today as the DRAM revenue leader that dominates HBM. The longer term question, several years out, is whether a funded CXMT can close the technology gap under sanctions. If it does, the pressure eventually reaches the largest incumbents too.
Bottom Line For long term holders, the CXMT raise highlights that these competitive threats are intensifying. Micron’s Q3 numbers are the peak of an AI memory cycle, and the stock has been priced accordingly. The $8.5 billion raise is the first hard evidence that the competitive equation on commodity DRAM is changing in the background. The next catalyst is fiscal Q4 2026 earnings, when management’s confidence in that $50 billion revenue guide meets the first questions about what a bigger CXMT means for pricing into calendar 2027. That is the number to watch – and we’ll all be waiting.
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The stock market’s advance from late March through early July produced several major winners, but few were more impressive than Micron Technology ((MU - Free Report) ) and Marvell Technology ((MRVL - Free Report) ). Both stocks more than tripled from their spring lows as investors rushed into companies positioned at critical points across the AI infrastructure buildout.
Micron benefited from surging demand for high-bandwidth memory, a critical component for AI inference, the fastest growing requirement for LLMs. Memory has historically been one of the most commoditized and cyclical areas of the semiconductor industry. But as demand began overwhelming available supply, Micron found itself controlling one of the scarcest resources in the AI ecosystem. Pricing power followed, earnings estimates soared and the stock responded accordingly.
Marvell’s rally was similarly dramatic. The company was already benefiting from rapid growth across custom silicon, interconnects, switching and optical networking, which is the plumbing that allows increasingly large AI data centers to function. Then Nvidia CEO Jensen Huang added fuel to the move by identifying Marvell as a potential future trillion-dollar company.
But after extraordinary three-month runs, both stocks have reversed sharply. Micron is now more than 20% below its recent high, while Marvell has fallen more than 35%.
So, is it time to buy the pullback?
Not quite. Micron is approaching a potentially attractive setup, but Marvell likely needs more time to stabilize.
The AI Sentiment Pendulum Swings AgainI do not believe the AI boom is ending. However, it seems the narrative pendulum had swung too far toward exuberance, and periods of extreme optimism typically require a meaningful reset before the next sustainable advance can begin.
We have seen this pattern several times throughout the AI boom. Concerns about capital spending, cheaper Chinese models, declining inference costs, competitive threats and uncertain returns on investment have repeatedly triggered sharp pullbacks.
Each concern has some merit. The largest technology companies are spending unprecedented amounts on AI infrastructure, while the ultimate economics of many AI services remain uncertain. But similar doubts have emerged before, and the broader semiconductor cycle has consistently resumed its advance after expectations and positioning cooled.
The process is never as clean as a theoretical model. Sentiment moves between enthusiasm and skepticism, producing irregular peaks and drawdowns around a longer-term trend. So far, however, each major cycle within the AI trade has ultimately resolved higher.
Image Source: Zacks Investment Research
Given the size of the recent declines and the sharp reversal in sentiment, I suspect the semiconductor correction is now closer to its end than its beginning. That does not mean the final low is already in. The group could still experience another leg lower, but much of the excess enthusiasm is leaving, and the risk-reward profile is becoming more constructive as expectations reset.
That does not mean every pullback should be purchased immediately. The underlying trend can remain intact while individual stocks decline further, consolidate for months or permanently lose leadership. Investors still need to distinguish between a durable business inflection and a stock that simply ran too far ahead of itself.
MU and MRVL Were Fundamental Rallies, Not Pure SpeculationIt is important to recognize that the advances in Micron and Marvell were supported by genuine business growth.
I highlighted both companies well before their most recent rallies. Last summer, I discussed Marvell’s compelling long-term setup following a disappointing earnings reaction in this interview. I also identified Micron as a non-consensus AI winner here near the beginning of what became an extraordinary advance.
The fundamentals subsequently exceeded even optimistic expectations.
That separates the current situation from a purely speculative bubble. Investors were not merely bidding up unprofitable companies based on distant promises. Micron and Marvell produced substantial revenue growth, rapidly improving earnings and exposure to areas of the AI supply chain where demand remains strong.
Still, even fundamentally justified rallies can overshoot. After moves of this magnitude, more air may need to come out before either stock is ready for its next sustained leg higher.
Micron’s Unbelievable Earnings GrowthMicron’s recent financial performance has been exceptional and helps explain why the stock gained so much so quickly.
In fiscal Q3 2026, ended May 28, Micron earned $25.11 per share on a non-GAAP basis, up more than 1,200% from $1.91 one year earlier. Revenue increased 346%, climbing from $9.30 billion to $41.46 billion.
Image Source: Zacks Investment Research
The company’s outlook suggested that the acceleration was not finished. Management guided fiscal Q4 revenue to approximately $50 billion, with non-GAAP earnings approaching $31 per share. Both would represent records by enormous margins.
Micron’s earnings revisions have been equally remarkable. According to Goldman Sachs, the company accounted for roughly 51% of all S&P 500 earnings-per-share revisions during the recent period it measured. That is an astounding contribution from one company and demonstrates how aggressively expectations have been repriced around memory demand.
But that concentration also creates risk.
Micron is no longer an overlooked AI beneficiary. Investors now broadly understand the high-bandwidth-memory shortage, the company’s pricing power and the scale of its earnings growth. Future gains will increasingly depend on whether Micron can continue exceeding already elevated expectations.
The company also remains exposed to the memory cycle. AI may have created something closer to a silicon super-cycle, but supply eventually responds to high prices. Customers can adjust spending, competitors can expand production and exceptionally strong margins can attract additional capacity.
Technically, Micron is now testing an important support area. The stock has not yet broken its broader uptrend, but a decisive move below that level would weaken the setup and suggest that the reset has further to run.
For investors interested in buying the pullback, Micron is the more compelling of the two stocks. However, I would still wait for evidence that support is holding and volatility is beginning to decline rather than trying to predict the exact bottom.
Image Source: TradingView
Jensen Huang’s Trillion-Dollar Call on MarvellMarvell has also delivered unusually strong growth, although its underlying inflection began well before the stock’s most recent surge.
For a time, that improvement was hidden beneath weak headline results. Total revenue barely increased from $5.5 billion in fiscal 2024 to $5.77 billion in fiscal 2025 as deep downturns in Marvell’s legacy carrier and enterprise businesses offset rapid data-center growth.
One layer beneath the headline numbers, however, the transformation was already underway.
Data-center revenue grew 88% in fiscal 2025 and represented approximately 75% of the company’s business by year-end, up from roughly 50%. Custom AI silicon entered volume production while Marvell’s electro-optics business continued supplying the connectivity required to move data across increasingly complex AI systems.
Once the weakness in the legacy businesses began to ease, the underlying growth became visible in the consolidated results.
Fiscal 2026 revenue reached a record $8.2 billion, representing growth of 42%, while data-center revenue surpassed $6 billion. Non-GAAP earnings rose 81% to $2.84 per share, and fiscal Q1 2027 revenue increased another 28%.
Image Source: Zacks Investment Research
Those results help explain why Marvell has become a prominent AI infrastructure companies. The business spans several important areas, including custom accelerators, optical connectivity, switching and data-center interconnects.
But the valuation leaves little room for disappointment.
Marvell trades at more than 50x forward earnings, although long-term earnings growth forecasts are also near 50%. That combination can support a premium multiple, but only while growth remains exceptional and execution consistently exceeds expectations.
Marvell may eventually become a trillion-dollar company, but getting there would require years of extraordinary compounding. Even at an elevated multiple, a $1 trillion valuation would imply approximately $20 billion in annual profit. That is an enormous leap from the company’s current earnings base.
For that reason, I would not treat the trillion-dollar prediction as a near-term investment thesis. It is better understood as an expression of Marvell’s strategic importance within the AI infrastructure ecosystem.
The immediate technical picture is less encouraging. Momentum has shifted decisively lower, volatility remains elevated and the stock has not yet established a clear support level. Rather than buying simply because Marvell is 35% below its high, I would wait for visible base-building, tighter trading ranges and evidence that sellers are becoming exhausted.
Image Source: TradingView
Micron Is Closer to a Buy Than MarvellBoth stocks remain tied to powerful long-term trends, but the risks are different.
Micron’s primary risk is the durability of the memory cycle. Investors must determine how long high-bandwidth-memory demand can outpace supply and whether exceptional pricing and margins can persist as production expands.
Marvell’s primary risks are valuation and execution. The company must continue converting its strong positioning in custom silicon and connectivity into earnings growth sufficient to justify a premium multiple.
Micron currently offers the more attractive setup because its earnings momentum is stronger and the stock is testing a clearly defined technical level. Marvell has experienced a more serious momentum breakdown and likely needs a longer period of stabilization.
That does not mean Micron should be purchased indiscriminately. A break below support could create another meaningful leg lower, particularly if broader semiconductor sentiment continues deteriorating.
For now, I would classify Micron as a stock to watch closely near support. Marvell remains a stock to wait on until its volatility declines and a credible base begins to form.
How Investors Can Approach MU and MRVL The recent declines in Micron and Marvell look more like sentiment resets than evidence that the AI infrastructure boom is breaking. Their rallies were supported by legitimate business growth, extraordinary earnings momentum and exposure to some of the most strategically important parts of the semiconductor industry.
But strong businesses do not automatically become attractive stocks at every price.
The narrative pendulum is now swinging away from exuberance and back toward skepticism. That process could continue for several weeks or months as investors question AI spending, future returns and whether the industry has expanded capacity too aggressively.
Micron is closer to an actionable entry, but investors should first look for support to hold and trading conditions to stabilize. Marvell carries a more demanding valuation and has suffered a more decisive technical breakdown, making patience especially important.
The larger AI opportunity likely remains intact. But after rallies of this magnitude, investors do not need to rush. MU is a watch near support, while MRVL remains a wait. A durable bottom could eventually create attractive opportunities in both, but neither stock has fully completed its reset.
Key Takeaways Intuitive Surgical is relying on technology, clinical evidence and its ecosystem to defend market leadership.ISRG uses da Vinci 5 and refurbished XiR to serve different budgets while protecting premium positioning.Intuitive Surgical emphasizes value, training, AI tools and services instead of competing on price. Intuitive Surgical (ISRG - Free Report) is navigating an increasingly competitive robotic surgery landscape as domestic Chinese manufacturers, European innovators and large global medtech companies expand their presence. Management acknowledged persistent competitive and pricing pressures in China, particularly amid lower tender activity and policy-driven pricing. The company, however, remains confident that it can preserve its leadership through differentiated technology, strong clinical evidence and a comprehensive ecosystem, rather than competing solely on price.
A key pillar of Intuitive Surgical's strategy is a tiered product portfolio that addresses varying customer budgets without diluting its premium positioning. The flagship da Vinci 5 targets hospitals seeking advanced capabilities such as Force Feedback, AI-enabled digital features and higher utilization, while the refurbished Xi (XiR) platform serves cost-sensitive markets, particularly outside the United States.
Management believes XiR offers a compelling value proposition because customers receive access to the full Intuitive Surgical ecosystem — including instruments, software, services and training — at a more affordable price point. This segmentation allows the company to compete across multiple price tiers while protecting margins on its latest-generation platform.
Rather than engaging in price wars, Intuitive Surgical continues to focus on value-based selling. Management said customer discussions increasingly focus on the overall value of a robotic surgery program — including improved patient outcomes, greater procedural efficiency, higher utilization and expansion of minimally invasive surgery — rather than the upfront purchase price of a robot. The company is also tailoring pricing and commercial strategies by geography while working with policymakers to strengthen reimbursement frameworks and demonstrate long-term clinical and economic benefits.
Perhaps Intuitive Surgical's strongest competitive moat remains its ecosystem. Beyond a large installed base, the company offers integrated surgeon training, digital services through My Intuitive+, telepresence capabilities, clinical evidence generation and AI-driven innovations powered by real-world surgical data. Management believes this combination of technology, outcomes data, service infrastructure and customer support creates a durable competitive advantage that will be difficult for newer entrants to replicate as global competition intensifies.
Peer UpdatesGlobus Medical (GMED - Free Report) is defending its position in robotic spine surgery by combining differentiated technology with a broader procedural ecosystem rather than competing on hardware alone. Management emphasized that ExcelsiusGPS continues to benefit from its ground-up design, navigation-based workflow, ease of use and proven reliability across nearly 130,000 robotic procedures. The company stated that newer competing systems are yet to match its accuracy and workflow efficiency.
GMED is also strengthening its moat through robotics pull-through, flexible leasing and rental models that expand placements while driving recurring implant revenues. Integration of patient-specific implants, navigation, robotics and surgical intelligence into a closed-loop ecosystem further differentiates Globus Medical, while aggressive surgeon recruitment and cross-selling help capture market share despite intensifying competition from Medtronic and other entrants.
Stereotaxis (STXS - Free Report) is responding to intensifying competition by transforming itself from a single-product robotics company into a comprehensive endovascular robotics platform. Rather than relying on its legacy robotic system, the company has launched GenesisX, MAGiC robotic ablation catheters and the Synchrony digital surgery cockpit, reducing its historical dependence on Johnson & Johnson while expanding recurring revenue opportunities.
Management believes GenesisX's ability to operate in existing catheter labs without construction significantly broadens its addressable market. At the same time, investments in AI, automation, wireless robotic platforms and the Robocath acquisition position Stereotaxis to compete across electrophysiology, neurovascular and cardiovascular interventions. By building an integrated ecosystem of robotics, proprietary devices and digital intelligence, the company aims to create a differentiated long-term competitive position despite growing global competition.
ISRG’s Price Performance, Valuation and EstimatesShares of ISRG have lost 32.9% so far this year compared with a 13% decline for the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, Intuitive Surgical trades at a forward price-to-earnings ratio of 34.18X, above the industry average. But, it is still lower than its five-year median of 69.50X. ISRG carries a Value Score of D.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Intuitive Surgical’s 2026 earnings implies a 16.6% rise from the year-ago period’s level.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
