Track market-moving stories before they get noisy

Key Takeaways COIN entered prediction markets through Kalshi, adding event contracts across sports, politics and more.Prediction markets could reduce Coinbase Global's dependence on crypto volumes tied closely to asset prices.COIN acquired The Clearing Company to build scalable prediction-market infrastructure. For Coinbase Global (COIN - Free Report) , prediction markets are emerging as a new growth pillar, expanding the company’s addressable market and accelerating its transition into an “everything exchange.” Coinbase entered the prediction-market space in November 2025 through a partnership with Kalshi, a regulated U.S. exchange that enables users to trade on outcomes of real-world events, including elections, inflation, sports and scientific developments.

Prediction-market volumes have surged amid rising retail participation, sports-related activity, political events and demand for real-time information. As event contracts can generate trading activity regardless of cryptocurrency-market direction, they could reduce Coinbase’s dependence on crypto trading volumes, which remain highly correlated with asset prices.

Prediction markets also reinforce Coinbase’s “everything exchange” flywheel. Through a single account, customers can hold cash and USDC, trade cryptocurrencies, equities and derivatives, and express views on real-world outcomes.

To strengthen its position, Coinbase acquired The Clearing Company, a prediction-market specialist, bringing dedicated product and growth expertise in-house. The acquisition should accelerate Coinbase’s product roadmap and support the development of regulated, scalable prediction-market infrastructure, rather than leaving the company solely dependent on third-party distribution.

Although still at an early stage, prediction markets provide Coinbase with an attractive entry into the fast-growing event-based trading market. Over time, the segment could increase trading frequency, diversify revenues, improve customer retention and establish Coinbase as a single destination for multiple financial markets.

What About COIN’s Peers?Robinhood Markets (HOOD - Free Report) stays focused on accelerating growth through rapid product innovation and global expansion. Robinhood has been engaging in opportunistic acquisitions to deepen its footprint and expand its product reach within the United States and globally. Robinhood also noted that AI features and fast rollouts are increasing engagement, premium monetization and retention, while stronger tools attract both retail and advanced traders.

Interactive Brokers (IBKR - Free Report) continues to explore growth opportunities in the emerging markets of Taiwan, Mexico and India. Given the rapid growth of its European business, Interactive Brokers has substantially expanded its operations there. Interactive Brokers has been undertaking several measures to enhance its global presence.

COIN’s Price PerformanceShares of COIN have lost 34.9% in the year-to-date period, underperforming the industry.

Image Source: Zacks Investment Research

COIN’s Expensive ValuationCOIN trades at a price-to-earnings ratio of 67.03, significantly above the industry average of 16.69.

Image Source: Zacks Investment Research

Estimate Movement for COINThe Zacks Consensus Estimate for COIN’s third-quarter and fourth-quarter 2026 earnings per share (EPS) witnessed southbound movement in the last 30 days. The same holds true for 2026 and 2027.

Image Source: Zacks Investment Research

The consensus estimates for COIN’s 2026 revenues and earnings indicate year-over-year decreases. Nonetheless, the consensus estimates for 2027 revenues and earnings imply year-over-year increases.

COIN stock currently carries a Zacks Rank #5 (Strong Sell).

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

Key Takeaways AON launched Sidecar X with up to $200 million for representation, warranties and tax insurance.AON's M&A pipeline rose 60% in announced transaction volumes, supporting its 2026 outlook.Sidecar X aims to speed up coverage for larger, complex deals while offering clients a 10% premium discount. Aon plc (AON - Free Report) recently launched Sidecar X, an expanded version of its Sidecar platform, to connect insurance capital with complex transaction risks. The platform provides up to $200 million of capacity for representation and warranties and tax insurance.

It has built pre-agreed underwriting and claims frameworks into the offering, reducing the need to negotiate terms from scratch for each placement. The platform combines insurer capital with Aon’s proprietary analytics and market expertise. Sidecar X is available exclusively to Aon’s clients across markets, including the United States, Canada, the UK, EEA and Asia, covering representations and warranties and tax insurance.

The launch addresses a problem in transaction insurance as deals are becoming larger and more complex, while insurers and capital providers are becoming more selective. Sidecar X gives a dedicated capacity that can help clients secure coverage more efficiently for these transactions. The biggest benefits include speed and certainty. Aon is also offering clients a 10% premium discount, which could make insurance attractive in deal processes.

On the second-quarter earnings call, AON pointed out that its M&A pipeline had increased 60% in announced transaction volumes, which management expects to be a tailwind in the second half of 2026. Its Risk Capital revenues rose 5% to $3 billion in the second quarter, while total revenues increased 2% to $4.25 billion.

Sidecar X should support Aon’s transaction business by improving its ability to place larger and more complex risks. The headline capacity expands the risk that Aon can help clients insure, while the premium discount could encourage greater usage. Faster execution may improve Aon’s competitiveness in time-sensitive M&A transactions. For Aon, the opportunity is potentially higher transaction volumes and deeper client engagement strategically.

Price PerformanceAON shares have declined 1.6% in the year-to-date period compared with 3.8% fall of the industry.

Image Source: Zacks Investment Research

Zacks Rank & Key PicksAON currently has a Zacks Rank #3 (Hold). Investors interested in the broader Finance space may look at some better-ranked players like Horace Mann Educators Corporation (HMN - Free Report) , CNO Financial Group, Inc. (CNO - Free Report) and Ategrity Specialty Insurance Company Holdings (ASIC - Free Report) . While Horace Mann Educators currently sports a Zacks Rank #1 (Strong Buy), CNO Financial and Ategrity Specialty have a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Horace Mann Educators’ current-year earnings is pegged at $4.78 per share, which has witnessed two upward revisions over the past 30 days and no movement in the opposite direction. Furthermore, the consensus estimate for HMN’s 2026 revenues indicates a 3.9% year-over-year increase.

The consensus mark for CNO Financial’s current-year earnings is pegged at $4.74 per share, which indicates 16.2% year-over-year growth. It has witnessed two upward estimate revisions against none in the opposite direction in the past 30 days. CNO beat earnings estimates in each of the last four quarters, with an average surprise of 23.2%.

The Zacks Consensus Estimate for Ategrity Specialty’s current year earnings is pegged at $2.16 per share, which indicates 34.2% year-over-year growth. It has witnessed one upward estimate revision against none in the opposite direction in the past month. ASIC beat earnings estimates in the last four quarters, with an average surprise of 30.2%.

Shares of Wrap Technologies, Inc. (WRAP - Free Report) have declined 11.5% since the company reported its earnings for the quarter ended June 30, 2026 compared with a 0.2% change in the S&P 500 Index over the same period. Over the past month, Wrap shares have fallen 13.4%, while the S&P 500 has advanced 4.1%.

Wrap reported a second-quarter 2026 net loss of 4 cents per share, narrower than a loss of 7 cents per share in the prior-year quarter.

Revenues of $2.1 million denoted a 103% surge from $1 million a year earlier.

Product sales climbed to $1.7 million from $0.01 million, while technology-enabled services revenues declined to $0.3 million from $1 million.

Net loss narrowed to $2.3 million from $3.7 million. Net loss attributable to common stockholders was $2.4 million, narrower than a loss of $3.9 million in the prior-year quarter.

WRAP’s Other Key Business MetricsGross profit increased 217% to $1.5 million from $0.5 million, while gross margin expanded to 75.3% from 48.1%. Selling, general and administrative expenses rose 15% to $3.6 million, primarily reflecting higher non-cash share-based compensation. Research and development expenses decreased 6% to $0.2 million. The operating loss narrowed to $2.3 million from $2.9 million.

Wrap ended June with $4.8 million in cash and cash equivalents, up from $3.5 million as of Dec. 31, 2025. Total liabilities declined to $2 million from $3.9 million, principally because of the termination of its former Coconut Grove office lease. For the first six months of 2026, cash used in operating activities declined to $3.7 million from $5 million a year earlier.

WRAP: Management CommentaryManagement characterized the quarter as the company's strongest in years and emphasized its shift from a single-product business toward a broader portfolio spanning non-lethal restraint, training, body cameras and threat detection. The company sees the ATF's classification of BolaWrap 150 as an instrument of restraint rather than a firearm or weapon as potentially expanding its addressable market, particularly in private security. Management also highlighted returning Department of Justice grant funding and federal opportunities, including a Department of Homeland Security purchase order and training delivered during the quarter.

Wrap is also moving toward a recurring-revenue model through WrapTactics and its learning-management system. Management said the training capability is built and ready to sell, although the associated recurring revenues are expected in future periods rather than being reflected materially in current results.

Factors Influencing WRAP’s Headline NumbersRevenue growth was driven by increased shipments of BolaWrap 150 devices and cassettes to domestic and international customers following the company's transition toward a more direct, agency-focused sales approach. The decline in technology-enabled services reflected the continued wind-down of managed services and advisory arrangements associated with the W1 asset acquisition, partly offset by growth in WrapVision body-camera and software revenues.

Gross-margin improvement reflected higher product volumes, better absorption of fixed manufacturing overhead and a more favorable revenue mix. The narrower net loss also benefited from the absence of an $0.9 million non-cash warrant-valuation loss recorded in the year-ago quarter.

Other Developments at WRAPAfter quarter-end, Wrap pursued a strategic investment in Frenel Imaging and obtained an exclusive license to commercialize its thermal-polarimetric imaging technology in the United States and NATO markets. Wrap intends to integrate the technology into WrapShield, its developing threat-detection and response platform. The company also introduced WrapShield and completed its first operational prototype of Wraptor MX, a multi-shot non-lethal restraint platform. These initiatives remain early-stage, and the timing and amount of any resulting revenues are uncertain. 

Key Takeaways Lumentum trades at 11.4X trailing P/S, above the sector and peers Coherent and Cisco Systems.LITE is scaling 1.6T transceivers and OCS as hyperscalers shift AI clusters toward faster optical links.Lumentum's Q4 non-GAAP gross margin hit 50.4%, while the operating margin rose to 36.6%. Lumentum (LITE - Free Report) shares are trading at a premium, as suggested by a Value Score of D. In terms of the trailing 12-month price/sales, LITE is trading at 11.4X, higher than the broader Zacks Computer and Technology sector’s 6.55X. Lumentum is trading at a higher multiple compared with peers, including Coherent’s (COHR - Free Report) 6.4X and Cisco Systems’ (CSCO - Free Report) 6.38X, but at a slightly lower multiple than Broadcom’s (AVGO - Free Report) 11.58X.

LITE Shares Trade at a Premium
Image Source: Zacks Investment Research

Is Lumentum worth buying at current prices? Let us dig deep to find out.

LITE Shares Ride on AI ProspectsYear to date (YTD), Lumentum shares have outperformed the broader sector, as well as Coherent, Cisco Systems and Broadcom. LITE returned a whopping 162.9% YTD while the broader sector, Coherent, Cisco Systems and Broadcom have returned 18.9%, 90.3%, 46.6% and 13.4%, respectively.

LITE Stock’s Price Performance
Image Source: Zacks Investment Research

Lumentum is benefiting from the rapid expansion of AI and cloud infrastructure, which is increasing bandwidth requirements within and between data centers and accelerating the shift from electrical to optical connectivity. The company said that AI compute workloads are increasing in speed and bandwidth, prompting data center architects to rely increasingly on optical links. The company believes that this transition is still in its early stages and is expanding Lumentum’s total addressable market (TAM) across scale-out, scale-across and, increasingly, scale-up connectivity.

The transition from 800G to 1.6T transceivers is expected to support strong systems growth. Lumentum has begun shipping 1.6T cloud transceivers, while hyperscale customers are rapidly transitioning their custom AI clusters from 800G to 1.6T. The company expects 1.6T adoption to accelerate from the first quarter of fiscal 2027 and remain strong through calendar 2027. Lumentum believes that it has been the first to market in several instances, ahead of larger competitors, giving it an opportunity to capture share. Higher-ASP 1.6T products, along with better yields and capacity utilization, are also improving transceiver profitability.

Lumentum’s OCS ramp is supported by strengthening demand under a multi-year, multi-billion-dollar purchase agreement. Systems revenues in the fourth quarter of fiscal 2026 increased 30% sequentially and 123% year over year, aided by record cloud transceiver shipments and the OCS ramp. LITE expects its fiscal first quarter to register more than $100 million in OCS revenues and said that demand visibility for 2027 remains very strong. The company is consequently expanding both internal manufacturing and contract-manufacturer capacity, and broadening the OCS roadmap to additional port counts and specialized configurations.

Co-packaged optics (CPO), near-packaged optics (NPO) and external light source modules are expected to move optics deeper into AI systems and potentially replace copper connections in scale-up networks. Lumentum has seen stronger demand signals from its lead CPO customers, secured an initial ELS module order and is participating in multiple NPO engagements. LITE identifies OCS, 1.6T cloud modules, ultra-high-power CPO lasers, ELS modules and NPO engagements as emerging growth drivers that are increasing the company’s optical TAM.

The growth outlook is increasingly translating into profitability for Lumentum. In the fourth quarter of fiscal 2026, the non-GAAP gross margin was 50.4%, up 1,260 basis points (bps) year over year, while the non-GAAP operating margin was 36.6%, up 2,160 bps. LITE attributed the improvement to manufacturing utilization, favorable product mix and selective price increases. Lumentum guided fiscal first-quarter revenues of $1.225-$1.275 billion and a non-GAAP operating margin of 39.5-40.5%, suggesting further operating leverage as AI-related revenue scales.

LITE’s 2027 Earnings Estimate Revision Shows Rising TrendThe Zacks Consensus Estimate for fiscal 2027 earnings is pegged at $18.71 per share, up 5.1% over the past 60 days, suggesting 115.8% growth from the fiscal 2026 reported figure.
 

The consensus mark for first-quarter fiscal 2026 earnings is pegged at $3.56 per share, unchanged over the past 60 days and indicating 223.64% growth from the figure reported in the year-ago quarter.

ConclusionLumentum’s premium valuation appears well-supported by its accelerating exposure to AI-driven optical networking demand, expanding addressable market and improving profitability. Strong momentum in 1.6T transceivers, OCS, CPO, NPO and external light source modules should help the company capitalize on hyperscalers’ rising investments in next-generation data center infrastructure.

At the same time, improving product mix, higher manufacturing utilization and operating leverage are translating robust revenue growth into sharply higher margins and earnings. The upward revision in the Zacks Earnings Estimates for fiscal 2027 further underscores improving confidence in Lumentum’s growth trajectory. Investors willing to accept the premium valuation may find Lumentum worth considering as a play on the continued expansion of AI and cloud infrastructure.

Lumentum currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Dycom's adjusted EBITDA jumped 74.6% to $262.5M, lifting the margin 141 basis points.Communications revenues rose 24.7% organically, while Building Systems posted a 17.7% EBITDA margin.DY's $11.9B backlog and strong fiber and data center demand support further margin improvement. Dycom Industries, Inc. (DY - Free Report) is showing encouraging signs of sustained profitability improvement as strong demand for digital infrastructure drives operating leverage across its business. In fiscal 2027 first-quarter results, adjusted EBITDA surged 74.6% year over year to $262.5 million, while the adjusted EBITDA margin expanded 141 basis points (bps) to 13.4%. The improvement came despite continued investments in workforce and footprint expansion.

The Communications segment remained a key contributor, generating $1.57 billion in revenues, up 24.7% organically, while adjusted EBITDA increased 28% to $192.4 million. Its margin reached 12.3%, up 31 bps year over year, supported by operating leverage as fiber-to-the-home and other multiyear infrastructure programs ramped. The Building Systems segment provided an even stronger catalyst for profitability. The segment generated $395.4 million in revenues and achieved a 17.7% adjusted EBITDA margin, with Power Solutions' performance exceeding initial expectations. Management now expects Building Systems to maintain margins in the high teens throughout fiscal 2027.

DY also expects modest margin improvement in Communications as operating leverage offsets investments needed to support growth. Strategic acquisitions could further strengthen profitability by expanding capabilities and creating cross-selling opportunities. The pending $275 million acquisition of National Technology Integrators is expected to add approximately $175 million in annual revenues at mid-to-high-teen historical EBITDA margins.

With record backlog, strong fiber and data center demand, disciplined project selection and continued operating leverage, Dycom appears positioned for further profitability gains. However, the company must execute effectively while scaling its workforce and integrating acquisitions to sustain the margin trajectory.

Dycom vs. EMCOR & Quanta: Who Has the Margin Edge?Dycom is well-positioned to benefit from accelerating AI, data center and digital infrastructure spending, alongside other market players, including EMCOR Group, Inc. (EME - Free Report) and Quanta Services, Inc. (PWR - Free Report) .

DY combines fiber-to-the-home, long-haul and middle-mile demand with expanding data center capabilities, while its $11.9 billion backlog, up 46.5% year over year, provides strong visibility. EMCOR benefits from robust data center-related electrical and mechanical construction demand, with RPOs reaching a record $17.14 billion in June 2026. Quanta offers broader exposure to power and utility infrastructure supporting rising electricity demand, with second-quarter 2026 backlog reaching $53.4 billion and RPOs $33.6 billion.

Overall, Dycom's fiber concentration and improving profitability provide an attractive growth profile alongside its larger diversified peers, EMCOR and Quanta.

DY Stock’s Price Performance & Valuation TrendShares of this specialty contracting firm have gained 28.1% year to date, underperforming the Zacks Building Products - Heavy Construction industry, but outperforming the broader Zacks Construction sector and the S&P 500 index.

Image Source: Zacks Investment Research

DY stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 23.63, as shown in the chart below.

Image Source: Zacks Investment Research

Earnings Estimate Trend of DycomDycom’s earnings estimates for fiscal 2027 and fiscal 2028 have trended downward in the past 30 days to $16.39 per share and $19.94 per share, respectively. However, the estimated figures for fiscal 2027 and fiscal 2028 imply year-over-year growth of 36.9% and 21.6%, respectively.

Image Source: Zacks Investment Research

Key Takeaways Analog Devices' Industrial revenues jumped 56% year over year to $1.80 billion in fiscal Q2 2026.ADI's automation, energy, healthcare and other industrial businesses grew more than 40% in the first half.ADI expects mid- to high-single-digit sequential Industrial growth in fiscal Q3 2026. Analog Devices’ (ADI - Free Report) Industrial segment is emerging as a key driver of its growth, supported by both a cyclical recovery and powerful secular trends. Industrial revenues rose 56% year over year to $1.80 billion in second-quarter fiscal 2026, accounting for 50% of total company revenues. For the first six months, Industrial revenues increased 48% to $3.30 billion.

The segment benefits from broad exposure across automated test equipment, aerospace and defense, automation, electronic test and measurement, sustainable energy, healthcare and broad-market industrial applications. Management noted that automation, ETM, sustainable energy, healthcare and broad-market businesses collectively grew more than 40% in the first half of fiscal 2026, while remaining below prior-cycle highs with lean channel inventories.

Automation is benefiting from factory modernization, robotics and reshoring, while energy demand is supported by grid modernization and electrification. Healthcare is also delivering double-digit growth as ADI expands into wearable and outpatient applications. Management expects Industrial to maintain above-seasonal growth, with mid- to high-single-digit sequential growth projected for fiscal third-quarter 2026.

ADI’s portfolio of high-performance sensing, signal chain, power management and connectivity supports the shift toward digital factories and next-generation robots across semiconductor fabs, biopharma and data centers. For the third quarter, management expects Industrial to grow mid- to high-single digits sequentially at the midpoint of guidance, which anchors a continued recovery.

Given Industrial’s 15- to 20-year average product lifecycles and above-corporate profitability, this mix can support durable margins as volumes normalize in the upcoming quarters. However, ADI faces competitive pressure from large semiconductor companies in this sphere.

How Competitors Fare Against ADIAnalog Devices competes with Texas Instruments (TXN - Free Report) and STMicroelectronics (STM - Free Report) in the Industrial segment. Texas Instruments competes with ADI in industrial signal chains, precision sensing and power management, especially in PLCs, factory automation and motor control. STMicroelectronics competes in industrial MCUs, motor drivers, sensors and automation systems.

In the robotics space, STMicroelectronics provides sensors, motor control ICs and power management for cobots, AMRs and humanoid robots. In automation, Texas Instruments provides low-power precision analog and sensing for medical imaging, patient monitoring and diagnostics.

Both STMicroelectronics and Texas Instruments compete with ADI in the aerospace and defense business through their radiation-hardened analog and mixed-signal ICs, secure communications and avionics systems.

ADI’s Price Performance, Valuation and EstimatesShares of ADI have gained 43.9% year to date compared with the Semiconductor - Analog and Mixed industry’s growth of 42.7%.

ADI YTD Performance Chart
Image Source: Zacks Investment Research

From a valuation standpoint, ADI trades at a forward price-to-sales ratio of 11.64X, higher than the industry’s average of 8.68X.

ADI Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings implies year-over-year growth of 59%. The consensus estimate for fiscal 2026 has been revised downward by a penny in the past 30 days.

Image Source: Zacks Investment Research

ADI currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Opendoor reached about 700 weekly purchase contracts, its strongest tally in years.Second-quarter acquisition contracts rose to 6,908 as marketing spending fell to just $5 million.OPEN expects a 4%-4.5% contribution margin as seasonal pressure remains. Opendoor Technologies Inc. (OPEN - Free Report) is showing a sharp pickup in acquisition activity even as the broader housing market remains challenging. On its second-quarter 2026 earnings call, management said the company is signing more than 500 home purchase contracts per week, with the prior week reaching around 700, its strongest weekly tally in years and more than five times the level seen a year ago.

The weekly numbers build on a strong second quarter. Opendoor generated 6,908 acquisition contracts, up from 5,136 in the first quarter. Homes purchased rose 77% sequentially and 149% year over year to 4,378, while the company ended the quarter with 2,310 homes under contract to purchase, compared with 393 a year earlier. More importantly, the higher volume came with far lower marketing spending. Opendoor spent just $5 million on marketing while producing more than 6,900 acquisition contracts. Management also said seller conversion improved significantly at comparable spreads, suggesting the company is not simply buying higher volume by taking on more pricing risk.

Seasonality remains a hurdle. Historically, Opendoor’s contribution margin has fallen sharply between the second and third quarters, with the average decline approaching 500 basis points excluding 2023. For third-quarter 2026, management expects a contribution margin of about 4%-4.5%, while revenues are expected to grow at least 20% year over year and contribution profit to more than double.

For now, the roughly 700-contract week suggests Opendoor’s turnaround is gaining operating momentum despite a difficult housing market. Still, acquisition contracts do not all translate into completed purchases. If volumes remain above the roughly 6,000-per-quarter level in management’s profitability framework while conversion, margins and cost discipline hold, the acceleration could become an important bridge from turnaround to sustained profitability.

Opendoor’s Competitive Landscape: Compass & RocketOpendoor’s accelerating contract volume comes as other real estate technology players are also emphasizing scale, conversion and operating efficiency. Compass, Inc. (COMP - Free Report) is pursuing a brokerage-led platform strategy rather than principal home buying. In the second quarter of 2026, Compass generated $4.3 billion in revenues and $363 million in adjusted EBITDA, while brokerage transactions rose 7.4% year over year versus 3.5% for the broader market. It also actioned its $300 million first-year cost-synergy target five months early.

Rocket Companies, Inc. (RKT - Free Report) offers another increasingly relevant comparison as it builds a broader homeownership ecosystem around mortgage origination, servicing and Redfin. Rocket posted $2.8 billion in adjusted revenues and $766 million in adjusted EBITDA in the second quarter of 2026, while purchase market share rose to a record 6.2% and refinance share reached 14.3%. More than 70% of revenues now come from recurring or less rate-sensitive businesses, helping reduce dependence on mortgage-rate cycles.

Overall, Opendoor currently stands out for combining faster contract growth with sharply lower marketing intensity.

OPEN’s Stock Price Performance, Valuation & EstimatesShares of Opendoor have lost 23.9% in the past six months, underperforming the Zacks Internet - Software industry, the broader Zacks Computer and Technology sector and the S&P 500 Index.

OPEN’s Six-Month Price Performance

Image Source: Zacks Investment Research

From a valuation standpoint, OPEN stock trades at a forward price-to-sales (P/S) multiple of 0.54, significantly below the industry’s average of 4.08.

P/S (F12M)

Image Source: Zacks Investment Research

OPEN’s estimates for 2026 indicate a loss of 12 cents per share, while those for 2027 point to earnings. Over the past 30 days, the 2026 estimates have remained unchanged, whereas those for 2027 have moved from breakeven to earnings of 1 cent per share.

Image Source: Zacks Investment Research

Duolingo
DUOL +7.54% 72

drew an upgrade to Buy from Neutral at DA Davidson, which set a $160 price target. Duolingo shares were up 4.49% premarket.

The argument is that investors are undervaluing product work, marketing changes and continued refinement of the monetization engine. DA Davidson expects daily active user growth to keep accelerating and bookings to converge with it. It also concedes the market has priced the risks around user deceleration and monetization effectively until now, but says Duolingo is nearing a turning point. The stock has fallen 65% over the past year.

The upgrade follows second-quarter results that beat on both lines, with adjusted earnings of $0.66 per share on revenue of $298.45 million against estimates of $0.58 and $295.44 million. Daily active users rose 23%, faster than the prior quarter, and Duolingo lifted its full-year adjusted EBITDA margin outlook to 26.5% from 25%.

UBS raised its price target to $150 after the print, while Scotiabank cut to $120 on a soft third-quarter revenue forecast.

Check the Warning Signs for

DUOL

now!

Key Takeaways Onto Innovation shares gained 26.1% in a month as Q2 revenue rose 35.3% to $343.1 million.ONTO's backlog topped $1.1 billion, with 30%-40% tied to 2027, improving growth visibility.Onto Innovation raised second-half revenue growth guidance to more than 25% over the first half. Onto Innovation Inc. (ONTO - Free Report) shares have advanced 26.1% in the past month, putting the focus on whether operating momentum can keep pace with a much higher stock price. Record quarterly revenues, margin expansion and rising estimates support the move.

Backlog extending into 2027 and a higher second-half outlook add visibility to the growth case. The offset is valuation. ONTO now discounts substantial execution, leaving less room for customer, cost, or qualification setbacks.

ONTO's Earnings Momentum Supports the RallySecond-quarter revenues climbed 35.3% year over year to $343.1 million. Non-GAAP earnings of $1.93 per share exceeded consensus by about 15%, while revenues topped management's $320-$330 million guidance range and the $325.6 million consensus mark.

Image Source: Zacks Investment Research

Advanced Nodes revenues rose 50% sequentially to about $120 million, with memory up roughly 60% and logic more than 40%. Inspection, led by the Dragonfly family, grew 30% sequentially as demand strengthened across 2.5D logic packaging and high-bandwidth memory applications.

Onto's Backlog Extends Growth VisibilityBacklog surpassed $1.1 billion. Management said roughly 60%-70% is tied to 2026 and 30%-40% covers 2027, reflecting customers' willingness to place purchase orders earlier than historical norms to secure supply.

Onto also received more than $200 million of Dragonfly orders from a single outsourced semiconductor assembly and test customer, with most scheduled for 2027. That order timing provides greater visibility, particularly in advanced packaging, where demand had historically been harder to forecast.

ONTO Raises the Bar for the Second HalfManagement raised expected second-half revenue growth to more than 25% over the first half, up from its prior 15% outlook. Third-quarter revenues are projected at $380-$400 million, with another sequential increase expected in the fourth quarter.

The third-quarter non-GAAP gross margin target is 57.3%-57.8%, while non-GAAP operating margin is projected at 31.5%-32.5%. Those targets imply further operating leverage, making delivery against the raised revenue and margin expectations central to the next leg of the rally.

ONTO's Premium Multiples Raise the Risk BarONTO trades at 15.2X trailing enterprise value-to-sales, well above its five-year median of 5.7X and the sector's 8.4X. The stock remains below its sub-industry multiple, but its own historical premium has widened materially.

That valuation indicates that substantial growth is already reflected in the shares. Sustaining the premium may require continued upward estimate revisions and consistent execution, because a revenue or margin miss could have a larger effect when expectations are elevated.

Onto's Execution Risks Could Test the RallyFour customers generated 57.3% of first-half 2026 revenues, leaving Onto sensitive to changes in major customers' capital plans. Trade-policy shifts, material and freight costs, supply-chain pressure and lengthy product qualifications add other execution variables.

KLA Corporation (KLAC - Free Report) supplies process-control and process-enabling solutions across wafer, integrated circuit and packaging manufacturing. Nova Ltd. (NVMI - Free Report) is another process-control peer, providing material, optical and chemical metrology and reporting record second-quarter sales in advanced-packaging dimensional metrology.

ONTO's Strong Rank Meets Weak Style ScoresThe setup remains constructive but not one-sided. ONTO's earnings outlook and backlog support the rally, while premium valuation and customer concentration increase sensitivity to any slowdown in revenues, margins, or estimate revisions.

ONTO currently carries a Zacks Rank #1 (Strong Buy), and the Zacks Consensus Estimate for earnings in the current fiscal year has risen 10.5% in the past month. The stock has a Value Score of F, Growth Score of D, Momentum Score of C and VGM Score of F. The Rank points to favorable near-term estimate-revision momentum, but the weak Value and VGM Scores show that the Style Scores provide limited broad support for the shares at current levels.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Takeaways Onto Innovation sees advanced-packaging revenue rising at least 80% in 2026 as AI demand broadens.ONTO's non-GAAP gross margin hit 57% in Q2, with operating margin expected near 32% in Q3.Four customers made up 57.3% of first-half 2026 revenue as ONTO trades well above its five-year median. Onto Innovation Inc. (ONTO - Free Report) is benefiting from accelerating AI-related demand, rising earnings expectations and improving profitability. Advanced packaging, advanced nodes and new process-control applications give the company several growth engines.

The trade-off is valuation. ONTO trades well above its own historical multiple and the broader market, so continued execution matters. Customer concentration, input costs and integration spending add risk when expectations are already elevated.

ONTO's AI Exposure Is BroadeningManagement expects advanced-packaging revenue to grow at least 80% in 2026 and advanced-node revenue to rise more than 35%. Dragonfly demand is expanding across high-bandwidth memory and 2.5D logic packaging, while Atlas G6 adoption is growing in logic and memory. Onto also has more than $50 million of silicon-photonics orders, with roughly two-thirds scheduled for 2027.

KLA Corporation (KLAC - Free Report) is seeing AI infrastructure drive process-control demand across foundry/logic, memory and advanced packaging. Nova Ltd. (NVMI - Free Report) also reported record second-quarter 2026 revenue from advanced logic devices and advanced-packaging solutions, underscoring the broader process-control opportunity tied to device complexity.

Onto's Margins Add Operating LeverageSecond-quarter non-GAAP gross margin reached 57%, while non-GAAP operating margin expanded to 30%. Management expects another 50 basis points of gross-margin improvement in each of the third and fourth quarters.

Image Source: Zacks Investment Research

Non-GAAP operating margin is expected near 32% in the third quarter and at least 33% exiting 2026. Extended factories are scaling alongside higher demand, giving Onto an avenue to convert revenue growth into stronger earnings growth if execution remains on track.

ONTO's Valuation Leaves Less Room for ErrorONTO trades at 15.2X trailing 12-month enterprise value-to-sales, versus a five-year median of 5.7X. The multiple also exceeds 8.4X for the Zacks sector and 5.7X for the S&P 500.

The counterpoint is the Zacks sub-industry's 38.5X multiple, which is much higher than ONTO's. Even so, the premium to ONTO's own history and the broader market means investors are already paying for sustained growth and margin expansion.

Onto's Risks Complicate the Buy CaseFour customers accounted for 57.3% of first-half 2026 revenues, making changes in large customers' capital plans consequential. Trade-policy shifts, material costs, fuel surcharges, freight expense and supply-chain constraints can also pressure execution.

Portfolio expansion adds another layer of cost. Semilab USA generated $20.7 million of second-quarter revenue but posted a $4.5 million operating loss. Onto must keep investing in product development and customer qualifications while integrating acquired technologies.

ONTO's Near-Term Signal Clashes With Style ScoresONTO's AI exposure, rising estimates and margin expansion support a constructive view, but the valuation leaves little room for execution misses. For new buyers, that mix favors a selective entry rather than chasing the stock solely on growth expectations.

The stock currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for 2026 earnings has risen 10.5% in the past month and 15.4% in the past 12 weeks, pointing to favorable near-term estimate-revision momentum.  You can see the complete list of today’s Zacks #1 Rank stocks here.

ONTO has a Value Score of F, Growth Score of D, Momentum Score of C and VGM Score of F. Those grades fall short of the A or B Style Scores that typically provide stronger confirmation for top-ranked stocks, leaving the near-term Rank signal more favorable than the broader style profile.

Key Takeaways Broadridge shares rose 11.9% in a month, outpacing the industry's 5.1% gain and S&P 500's 4.1%.Payward & Raiffeisen deals expand BR's digital asset governance and reconciliation capabilities.Broadridge raised its annual dividend 12% to $4.36 and authorized a new $1.5 billion buyback program. Shares of Broadridge Financial Solutions, Inc. (BR - Free Report) have a decent run over the past month. The stock has risen 11.9% compared with the industry’s 5.1% growth. The Zacks S&P 500 composite moved 4.1% upward during the said time frame.

Image Source: Zacks Investment Research

BR’s first-quarter fiscal 2027 earnings are expected to be down 9.3% year over year. Earnings for fiscal 2027 and 2028 are projected to rise 9.8% and 10.2% year over year, respectively. Revenues are expected to increase 5.02% in fiscal 2027 and 5.34% in fiscal 2028.

Factors That Bode Well for BRBroadridge’s collaboration with Payward Services is a positive development that strengthens its position in digital asset governance by extending proxy voting and shareholder communications to eligible xStocks holders. The initiative bridges traditional shareholder rights with blockchain-based ownership, potentially expanding Broadridge’s addressable market as tokenized securities gain adoption. With xStocks already supporting more than 500 tokenized assets across equities, ETFs and pre-IPO offerings, the partnership could drive additional demand for Broadridge’s governance, reporting and proxy infrastructure while reinforcing its role in the evolving tokenized securities market.

The company’s expanded agreement with Raiffeisen Bank International is also a positive development that strengthens its recurring technology and solutions business. The deployment of BRx Match will enable CRISP to manage a projected fourfold increase in transaction volumes across 14 markets while improving automation, exception management and regulatory compliance through ISO 20022 support. The cloud-based platform should help BR deepen its relationship with a long-standing client and generate opportunities for further adoption, as financial institutions modernize reconciliation infrastructure and scale operations across global markets.

Broadridge has demonstrated a strong commitment to its shareholders through consistent dividend payments, despite the fluctuations in its cash position. BR paid dividends of $331 million, $368.2 million and $402.3 million in fiscal 2023, 2024 and 2025, respectively. This consistency underscores its dedication to creating long-term value for investors. At the end of fiscal 2026, the company paid dividends worth $443.5 million.

In the first quarter of fiscal 2027, the board of directors increased Broadridge’s annual dividend by 12% to $4.36 per share and declared a quarterly dividend of $1.09 per share. The board also authorized a new $1.5 billion share repurchase program, replacing the remaining authorization under the previous plan. These actions underscore Broadridge’s commitment to returning capital to shareholders while maintaining flexibility to support EPS growth through share repurchases.

Key Risks to WatchBR is facing mounting pressure from surging expenses, which are hampering the company’s prospects. The total operating cost increased 7% year over year in 2024, 3.8% year over year in 2025 and 8.4% year over year in 2026, driven by higher distribution expenses, volume-related expenses and the impact of acquisitions and investments.

Moreover, the company operates in a highly competitive environment, with intense competition from financial technology and business process service providers pressuring pricing, innovation and client retention. Meanwhile, volatility in the macroeconomic environment, including changing interest rates, market conditions and economic uncertainty, could weigh on client spending and transaction activity, potentially hampering Broadridge’s growth prospects and financial performance.

Broadridge currently carries a Zacks Rank #3 (Hold).

Stocks to ConsiderA couple of better-ranked stocks in the Internet - Software industry are Astera Labs, Inc. (ALAB - Free Report) and Twilio (TWLO - Free Report) .

Astera Labs sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ALAB has an encouraging earnings surprise history. It has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 17.07%.

Twilio also sports a Zacks Rank of 1 at present. It has an encouraging earnings surprise history, surpassing the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 13.95%.

AI Cold War Catches Light: Federal Friction in the Server RackApplied Optoelectronics NASDAQ: AAOI is positioning its laser manufacturing and automated U.S.-based production capabilities as key differentiators as data-center customers expand AI infrastructure, according to Chief Financial Officer and Chief Strategy Officer Stefan Murry at the Rosenblatt Age of AI Tech Summit.

Murry said the company’s technology foundation is its indium phosphide laser capability, which predates its transceiver business. Customers value the company’s internal laser fabrication because it provides a differentiated supply chain and can improve supply continuity at a time when laser availability is constraining industry growth, he said.

Get AAOI alerts:

MarketBeat Week in Review – 05/18 - 05/22He also highlighted Applied Optoelectronics’ automated transceiver manufacturing process. Murry said automation can enable economically viable U.S. production, an attribute that customers increasingly value amid geopolitical tensions, supply-chain disruptions and uncertainty over potential government restrictions on Chinese suppliers.

“They’re willing to pay a premium for U.S. production,” Murry said.

Laser Capacity and CPO Opportunity Why Applied Optoelectronics Stock May Be Near a Turning PointMurry said the company can produce high-power continuous-wave lasers used in silicon photonics applications, including lasers in the 300- to 400-milliwatt range for co-packaged optics, or CPO. While he said several major competitors can produce lasers that meet customer specifications, Applied Optoelectronics sees its designs as competitive, particularly in narrow-linewidth performance at higher power levels.

The company’s primary limitation is manufacturing capacity rather than technology, according to Murry. Applied Optoelectronics is shipping small quantities of high-power lasers for customer evaluation but does not yet have sufficient capacity to address all of the demand it is seeing.

The company currently uses four-inch wafers for laser production and said its recently acquired fabrication equipment is capable of supporting a future transition to six-inch wafers. Murry said the company does not have a fixed timetable for that transition, which will depend on production economics, yields and substrate availability.

Applied Optoelectronics expects its capacity additions in the latter half of 2027 to support greater participation in both traditional scale-out data-center deployments and newer scale-up architectures. Murry said scale-up systems could require roughly an order-of-magnitude more lasers, with laser die sizes also substantially larger than in current deployments.

“There is not enough capacity in the industry right now to even come close to meeting the demand from scale-up,” Murry said.

Transceiver Production Ramp Murry said two large hyperscale customers are driving most of the company’s 800G transceiver volume, with several additional customers purchasing or preparing to purchase smaller quantities. The company’s expected increase in 800G sales during the third quarter is being supported mainly by added capacity at its Taiwan facility.

Applied Optoelectronics plans its manufacturing expansion in increments of about 100,000 units per month, Murry said. The company had more than 200,000 units of monthly capacity following the end of the prior quarter and is working toward 650,000 units per month by year-end.

The company has 1.6 million square feet of space available in the Houston area, where it is beginning to develop additional production capacity. Initial U.S. transceiver capacity is expected to begin coming online later this year, though Murry said the larger contribution from the facility is expected in 2027 and 2028. Laser production is currently located in Sugar Land, Texas, and the company intends to add further laser production capacity in the Houston area rather than overseas.

Murry said Applied Optoelectronics is effectively sold out through at least the second half of next year for certain products and must avoid overcommitting capacity to new customers. He said the company’s capacity-expansion plans could support market share of around 20%, though larger competitors would remain in the industry.

Margins, Capital Spending and Customer Agreements The company expects gross margin to exit the year in the low- to mid-30% range, Murry said, potentially around 32% to 33%. Short-term pressures include expedited supply-chain costs, somewhat higher component and substrate prices, and an expected decline in the company’s higher-margin 100G business as one customer shifts available memory toward higher-speed deployments.

Murry said expedite costs should become less significant after the fourth quarter as suppliers adjust to higher 1.6T demand. Applied Optoelectronics continues to target gross margin of approximately 40% by the end of 2027. CPO-related laser-chip margins could exceed 60%, while module margins would fall between chip-level and current transceiver-margin levels, he said.

The company is discussing CPO opportunities with five companies, including some that are also evaluating near-packaged optics, or NPO. Murry said he expects Applied Optoelectronics to have more than one CPO customer, though capacity may limit how much demand it can serve.

Capital expenditures are expected to remain elevated in the second half of the year, at least matching first-half spending. Murry said most spending is directed toward production equipment, machinery and real estate, with anticipated returns on current investments of roughly nine to 10 months.

Applied Optoelectronics expects to use a mix of operating cash flow, customer contributions, debt structures, government subsidies and, to a lesser extent over time, equity financing to fund growth. The company also sees its cable-TV business, which it said is generating at least $350 million in annual revenue, as likely to grow for another year or two before leveling off in line with the sector’s longer investment cycles.

About Applied Optoelectronics (NASDAQ:AAOI)Applied Optoelectronics, Inc develops and manufactures high-speed fiber-optic networking products designed to support the growing bandwidth demands of data centers, telecommunications carriers and internet content providers. The company's core offerings include pluggable optical transceiver modules, transponders and optical components that enable data transmission at rates ranging from 1G to 400G. These products are used to facilitate long-haul, metro and intra-data center connectivity, addressing the need for scalable, low-latency and energy-efficient solutions in modern network infrastructures.

The company's product portfolio spans small-form factor pluggable modules such as SFP+, QSFP+ and QSFP28 units, as well as more advanced form factors like CFP2 and OSFP for ultra-high-speed applications.

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

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Should You Invest $1,000 in Applied Optoelectronics Right Now?Before you consider Applied Optoelectronics, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Applied Optoelectronics wasn't on the list.

While Applied Optoelectronics currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

The AI boom is creating opportunities across semiconductors, cloud computing, enterprise software, infrastructure, cybersecurity, and automation.

Inside this report, you’ll find 10 companies positioned to benefit as artificial intelligence moves from hype to real-world deployment and becomes a core growth driver for corporate America.

Get This Free Report

Key Takeaways QUBT sold, delivered and installed its Dirac-3 quantum optimization machine at a global consulting firm. QUBT's NeuraWave reached deployment readiness, combining photonic and digital computing for AI inference. QUBT's Planck Dynamics framework deal could exceed $10 million as specified customer milestones are met. Quantum Computing Inc. or “QCi” (QUBT - Free Report) expanded customer adoption across its quantum optimization and photonic computing platforms. The company successfully sold, delivered and installed its Dirac-3 quantum optimization machine at a leading global consulting firm. The Dirac-3 system will support enterprise customers on complex optimization applications, including portfolio optimization.

NeuraWave, its next-generation photonic reservoir computing platform, also reached deployment readiness. This platform combines photonic and digital computing to deliver fast, energy-efficient AI inference and advanced signal processing for edge computing applications across defense, telecommunications, robotics, healthcare industrial monitoring and other markets. 

QCi entered into a framework agreement with Planck Dynamics to support the deployment of almost multiple dozens of NeuraWave photonic reservoir computing systems as customer milestones are achieved. The agreement represents an important commercial validation of NeuraWave’s readiness to address emerging AI infrastructure requirements with a potential aggregate program value in excess of $10 million, subject to the achievement of specified customer milestones and other conditions.

QCi also received an order from a leading university for its quantum-secure communications system, supporting further research and signaling continued customer traction.

Peer UpdateRigetti (RGTI - Free Report) will deliver a 9-qubit Novera system to the Pittsburgh Supercomputing Center’s TangleLab testbed, expanding its quantum-HPC collaboration. The company is also fulfilling on-premises systems, including a 108-qubit program for C-DAC in India, amid continued demand from universities, national labs and research organizations.

D-Wave Quantum (QBTS - Free Report) announced several new and renewed commercial and research customer engagements, including AT&T, Nasdaq Verafin, Oki Electric, Shionogi, Unisys, and one of the world’s largest gambling and entertainment companies. The company also announced a forthcoming gate-model quantum computing simulator, which is expected to be the first specifically designed for error-aware programming.

QUBT’s Share Price PerformanceOver the past year, QCi’s shares have plunged 43.1% compared with the industry’s 12.6% decline. 

Image Source: Zacks Investment Research

QUBT’s Expensive ValuationQUBT currently trades at a forward 12-month price-to-sales (P/S) of 41.05X compared with the industry’s median of 4.10X.

Image Source: Zacks Investment Research

QUBT Stock Estimate TrendOver the past 30 days, QCi’s loss per share estimate for 2026 has moved south.

Image Source: Zacks Investment Research

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

Shares of Bitcoin (CRYPTO:BTC) miners pivoting to AI infrastructure are moving lower together Tuesday morning, with Cipher Mining (NASDAQ:CIFR) stock down 9% to $16.77 and TeraWulf (NASDAQ:WULF) shares down 7% to $16.45. Rising Treasury yields sit at the center of the move.

The 10-year yield is trading near the upper end of its 52-week range, pressuring long-duration cash flow valuations across a group financing multi-year data center construction against contracted revenue arriving later. HIVE Digital Technologies (NASDAQ:HIVE) shares are down 7% to $2.87, giving back most of Monday’s surge. MARA Holdings stock is down 5% to $9.24, and Riot Platforms shares are down 4% to $19.23.

Rising Yields Reprice the AI Miner Trade The 10-year Treasury yield is 4.7%, near the top of its 52-week range of 3.9% to 4.7%. Every name in this cohort is spending heavily now against revenue arriving in 2027 and 2028, and higher rates raise both borrowing costs and the discount rate applied to future cash flows.

The Nasdaq is down more than 1% and the Philadelphia Semiconductor Index is down more than 5%, so AI infrastructure exposure is under pressure across the board. Each miner in this group retains Bitcoin mining operations and treasury exposure while building HPC capacity for AI tenants, making long-term rates a unified driver (we profiled seven non-chipmaker suppliers powering the same buildout in a free AI infrastructure report).

Cipher Mining Takes the Hardest Hit Cipher Mining stock is absorbing extra pressure beyond the macro, with major sell-side firms adjusting their views on the heavy AI infrastructure pivot. As a capital-intensive Bitcoin miner building industrial-scale high-performance computing data centers for hyperscale tenants, Cipher occupies a concentrated corner of the group with stock up 25% year to date through Monday’s close, so Tuesday’s decline arrives from a level that had absorbed sizable gains earlier in the year.

TeraWulf operates Lake Mariner in New York with 102 MW of revenue-generating critical IT capacity and 336 MW under construction and controls a pipeline of roughly 2.1 GW across five sites with 839 MW of contracted capacity under long-term leases with Anthropic and Core42. The stock was up 53% year to date through Monday’s close, while Riot Platforms has secured 241 MW of contracted critical IT capacity at Rockdale representing $9.8 billion in long-term contracted revenue, with a Corsicana campus under a non-binding letter of intent for up to 1 GW and its shares up 58% year to date through Monday’s close.

TeraWulf, Riot, MARA, and HIVE Follow MARA Holdings operates 19 data centers across four continents, holds a bitcoin treasury of 35,577 BTC and recently secured rights to a 2 GW site in Texas as part of a targeted powered land portfolio of up to 4.8 GW. The stock was up 8% year to date through Monday’s close.

HIVE Digital Technologies surged Monday on a five-year, $350 million GPU cloud services agreement through its BUZZ HPC subsidiary expected to generate $70 million in annualized revenue, with $185 million in capital expenditures and a $35 million upfront customer deposit. That deal offered no protection once yields moved, and its shares were up 19% year to date through Monday’s close.

The Sector ETF Confirms Group-Wide Selling The Valkyrie Bitcoin Miners ETF (NASDAQ:WGMI) is down 6% to $47.32, sitting in the middle of individual name declines. That placement signals group-wide selling rather than isolated weakness, and WGMI is a narrow thematic fund concentrated in Bitcoin miners, carrying meaningful concentration risk.

The fund was up 31% year to date through Monday’s close.

What to Watch The bull case is that Cipher Mining, TeraWulf, Riot, MARA, and HIVE hold contracted revenue backlogs, controlled scarce power capacity, and long-duration leases with creditworthy AI customers, none of which changed Tuesday. The bear case is that these are loss-making businesses in heavy investment phases where higher rates directly raise capital costs, and Cipher Mining specifically is absorbing analyst reductions.

Given the volatility of this cohort and low absolute share prices of some names, position sizing should stay moderate. Traders could look for signs that the 10-year yield breaks above its 52-week high. Shareholders may want to keep an eye on whether their exposure can absorb further rate volatility before 2027 and 2028 lease deliveries begin producing cash flow.

Contact [email protected] for any questions or corrections.

powered by

TSLA buy on robotaxi/AI re-rating

Buy Tesla (TSLA). The stock is already reacting to AI/robotaxi headlines, and the market is still “de-emphasizing” near-term fundamentals—meaning incremental proof (robotaxi expansion, Cybercab event progress, Optimus demos) can drive a fast multiple re-rate. Analyst sentiment is also skewing more positive than the long-run average (45% Buy vs 55–60% typical), leaving room for upgrades if events confirm momentum. Key risk: FSD/robotaxi performance stays unreliable (frequent disengagement/collisions), forcing investors to treat robots as marketing instead of a scalable business.

Key Risk: FSD/robotaxi fails to scale—disengagements and safety issues keep proving it’s not ready for mass use.

TSLA sell into valuation risk

Sell Tesla (TSLA). The bearish case is simple: valuation assumes autonomy and humanoid robots work on a timeline that current evidence doesn’t support. With operating margin at 1.4%, negative free cash flow, and energy margin down, the stock has little cushion if robotaxi/Cybercab timelines slip. Johnson’s tracked disengagement rate and collision disclosures directly challenge the “ready now” narrative, and the average target ($374) is far below the recent peak. Key risk: Tesla delivers credible, measurable autonomy/robotaxi expansion fast enough to justify the current expectations (not just events, but real-world scale).

Key Risk: Tesla proves autonomy is ready at scale—real robotaxi adoption and performance beat the valuation assumptions.

Tesla TSLA shares reversed earlier losses on Tuesday and were trading in the green as investors focused on the electric-vehicle maker's artificial intelligence ambitions and potential robotaxi and humanoid robot businesses.

Tesla shares entered Tuesday down about 25% year to date and had gained only around 1% over the previous 12 months, reflecting a prolonged period of limited gains as investors await evidence of progress in the company's AI-related businesses.

Tesla launched an AI-trained robotaxi service in June 2025, although its rollout across several cities has been gradual.

The company is also preparing to introduce the Cybercab, a steering-wheel-less robotaxi, according to The Information.

Tesla has separately been developing Optimus, an AI-trained humanoid robot, although investors have had limited recent visibility into its capabilities.

Baird analyst Ben Kallo said investor attention remains focused primarily on Tesla's robots and robotaxis rather than its traditional automotive and energy operations.

He described the current environment as one in which fundamentals have been "extremely de-emphasized."

Kallo rates Tesla Buy and has a $475 price target.

According to FactSet, 45% of analysts covering Tesla rate the shares Buy, below the typical 55% to 60% Buy-rating ratio for S&P 500 companies.

The average analyst price target is around $374, down from a March peak of approximately $415.

GLJ Research reiterated its Sell rating and maintained a $24.86 price target, implying a 92% downside from current price levels.

GLJ Research analyst Gordon Johnson highlighted Tesla's 1.4% operating margin in the second quarter, negative $1.1 billion in free cash flow and a decline in energy gross margin to 20.4%.

Johnson also raised concerns about Tesla’s robotaxi ambitions, arguing that the company’s Full Self-Driving (FSD) performance does not yet support the expectations built into the stock’s valuation.

He cited tracked data showing FSD v14 on Tesla’s HW4 system disengaging about every 40 miles.

The data covers 865 vehicles, with 18 active in the past week.

Johnson also pointed to 22 collisions reported in National Highway Traffic Safety Administration filings over the past 12 months, saying the figures raise questions about whether Tesla’s autonomous driving technology is ready to justify its current valuation.

Those concerns extend to the Cybercab, Tesla’s planned steering-wheel-free robotaxi.

While Johnson expects the planned Austin event to attract attention, he does not view the event itself as evidence that the vehicle is ready for widespread use.

Johnson also questioned Tesla’s valuation estimates for its future businesses.

He cited management estimates of roughly $20 trillion for Optimus, the company’s humanoid robot business, and about $5 trillion for autonomy and other businesses.

SpaceX merger remains a potential catalystInvestors are also watching speculation about a potential combination between Tesla and SpaceX, both led by Elon Musk.

Gary Black, managing partner at The Future Fund, believes there is a high probability of a Tesla-SpaceX merger this year but remains cautious about Tesla's valuation.

He expects SpaceX could potentially make an all-stock offer for Tesla at a roughly 20% premium.

Black said such a transaction could create strategic synergies and simplify Musk's responsibilities across the two companies. However, he also warned that existing Tesla shareholders could face substantial dilution in an all-stock transaction.

Black estimates Tesla is trading at roughly 195 times 2026 earnings and argues that its valuation leaves limited room for attractive returns even with strong long-term earnings growth.

Intel and AMD shares suffered sharp declines on Tuesday as a broader market sell-off swept through technology stocks, with investors increasingly concerned about rising borrowing costs, persistent inflation and elevated oil prices.

The Philadelphia Semiconductor Index fell more than 5%, reflecting the pressure across the chip sector.

Intel INTC shares declined over 7%, while AMD fell roughly 5.5%.

Brent crude futures also rose 0.5% to around three-week highs as hopes for an end to the Middle East conflict faded.

Higher oil prices have renewed concerns about inflation and the potential for interest rates to remain elevated for longer.

The 30-year Treasury yield reached its highest level since 2007, while the benchmark 10-year yield remained near its highest level since January 2025.

Higher long-term yields can be particularly damaging for technology stocks because they reduce the present value of future earnings while increasing financing costs for companies investing heavily in expansion.

"The yields are ⁠troubling people because it portends a tighter environment and it's going to be more expensive to borrow money," said Kim Forrest, chief investment officer at Bokeh Capital Partners in a Reuters report.

"Especially in this whole AI thing where time to pay it back is uncertain. It makes for a nervous investor environment."

Intel's decline was compounded by company-specific concerns after UBS lowered its price target to $112 from $121 while maintaining a Neutral rating.

The reduction added to concerns that Intel's near-term upside could remain limited despite its longer-term ambitions in artificial intelligence and semiconductor manufacturing.

A major issue for investors is the dilution resulting from Intel's $20 billion common stock offering, which closed on August 12 at $95 a share.

The offering involved approximately 210.5 million new shares.

Bank of America estimates that the increased share count could reduce Intel's earnings per share by roughly 4% to 5% as the dilution is incorporated into forward estimates.

The bank recently cut its price target to $145 from $160 but retained a constructive view of the company.

BofA argued that the scale of the capital raise demonstrates management's confidence in attracting major customers to Intel's foundry business.

However, the dilution has become a significant overhang for the stock. A positive catalyst from Monday has also faded.

Nvidia's regulatory filing revealing a roughly $30 billion stake in Intel initially boosted sentiment, but investors have since shifted their focus toward dilution and the latest analyst downgrade.

AMD also came under pressure as the broader market decline erased gains linked to the company's recent financing plans.

The chipmaker reportedly priced a $4.75 billion bond offering to help fund its expansion into artificial intelligence and data centers.

The transaction was AMD's largest-ever US dollar bond financing, according to NAI 500.

The debt deal gives AMD additional financial flexibility as it manages upcoming funding requirements, including $875 million in bonds due to mature next month.

The financing comes as AMD attempts to capture a larger share of the rapidly expanding AI accelerator market.

At its Advancing AI event, the company raised its projection for the total AI chips market to $1.4 trillion by 2030, according to TipRanks.

For investors, however, the near-term market environment is making it harder for even strong AI growth stories to escape pressure.

Nvidia
NVDA -2.37% 95

received a higher price target from GF Securities as the chipmaker prepares to report quarterly results, with analyst Jeff Pu maintaining a Buy rating and pointing to demand for its next-generation Vera Rubin platform.

Pu lifted his target to $345 from $308. He expects new orders and Nvidia's system design approach to support the product cycle, with additional demand potentially coming from cloud providers and newer AI infrastructure companies.

The analyst also sees Nvidia gaining ground against custom accelerator chips and rival platforms. Microsoft
MSFT +0.36% 96

, Amazon
AMZN +0.04% 93

, Alphabet's Google
GOOG +0.04% 96

, and Oracle
ORCL -1.57% 90

have increased demand for Vera Rubin, according to the note.

Pu said Nvidia could also benefit from higher activity at Anthropic and broader interest in open-weight AI models. The company is scheduled to release fiscal second-quarter results on Aug. 26.

Check the Warning Signs for

GOOG

now!

powered by

NVDA buy on yield dip

Buy NVDA. The selloff is driven by higher Treasury yields and a broad chip pullback, not a break in Nvidia’s AI demand. BofA’s view is that Nvidia’s frontier-AI commitments (supply, land, power, infrastructure) and GPU rental/compute scarcity keep growth durable, and the valuation gap vs its own FCF multiples supports buying weakness ahead of Aug 26.

Key Risk: AI capex slows faster than Nvidia’s commitments can be monetized, cutting rental rates and free-cash-flow growth.

Semis basket buy (memory/CPU laggards)

Buy the iShares Semiconductor ETF (SOXX) or VanEck Semiconductor ETF (SMH) selectively, using the broad weakness (WDC, Sandisk, Marvell, Seagate down 6–7%) as entry. If yields stabilize, the market’s “risk-off” move should mean-revert across semis, and Nvidia’s rebound narrative can pull the whole group higher.

Key Risk: Yields keep rising and the macro hit spreads into a sustained earnings downgrade cycle for semis.

Nvidia shares NVDA fell around 2% in early Tuesday trading as higher Treasury yields pressured semiconductor stocks and weighed on the broader market.

The decline came alongside a wider pullback across chip stocks.

Western Digital fell almost 7%, while Sandisk dropped more than 6%. Marvell Technology and Seagate Technology also fell more than 6%.

The S&P 500 declined 0.5%, while the Nasdaq Composite fell 1.1%. The Dow Jones Industrial Average was down 191 points, or 0.4%.

The 30-year Treasury yield climbed more than 1 basis point to 5.323%, after reaching its highest level since June 2007 on Monday.

Yields have risen as investors remain concerned about persistent inflation and elevated oil prices.

US crude rose on Monday and gained another 0.9% Tuesday to trade above $85 a barrel as negotiations between the US and Iran stalled.

Nvidia's Tuesday decline comes after a strong rebound in recent weeks.

Shares closed around $225 on Monday for a second consecutive session, a level not seen since mid-May.

The stock's recent advance has pushed its year-to-date gain above 16%, compared with gains of about 15% for the Nasdaq Composite and 13% for the S&P 500.

From the recent market bottom on July 29, Nvidia shares have gained about 15%, compared with a 1.5% advance for the iShares Semiconductor ETF and an almost 2% gain for the VanEck Semiconductor ETF.

Nvidia had trailed those semiconductor baskets for much of the year as investors shifted toward memory and CPU stocks and renewed questions emerged over the sustainability of the company's growth.

The recent rebound has coincided with a broader recovery in the AI infrastructure trade.

Nvidia's increased financial support for key customers is also looking less risky than initially feared, while a new financing initiative could make funding the broader AI buildout more attainable.

New details on revenue growth at OpenAI and Anthropic, both major Nvidia chip customers, have also supported expectations that the companies can continue spending on compute.

Nvidia is scheduled to report its fiscal 2027 second-quarter results on August 26.

BofA maintains bullish view on Nvidia stockBofA Securities reiterated its Buy rating and $350 price target on Nvidia following the company's $105 billion in commitments related to OpenAI.

BofA said after discussions with Nvidia senior management that the chipmaker remains committed to securing chip supply, land, power and infrastructure for frontier AI labs and so-called neo-clouds.

According to BofA, the strategy is intended to diversify Nvidia's customer base beyond public hyperscalers that are increasingly developing their own custom chips.

BofA cited solid GPU rental rates, compute scarcity and Nvidia's free cash flow generation as factors supporting the company's commitments.

The firm also highlighted risks if AI demand slows, which could pressure Nvidia's growth rate and balance sheet.

BofA expects Nvidia to provide more disclosure around its off-balance-sheet commitments when it reports earnings on August 26.

BofA said Nvidia trades at 18 times and 15 times calendar 2027 and 2028 enterprise value to free cash flow, respectively, compared with its blended valuation multiples of 36 times and 22.5 times.

The firm views that valuation gap as a compelling opportunity while maintaining its $350 price target.

Virgin Galactic Holdings, Inc. (NYSE: SPCE) ("Virgin Galactic" or the "Company") today announced that on August 14, 2026, the U.S. District Court for the Eastern District of New York (the "District Court") issued an order granting final approval of the settlement resolving all claims pending in the shareholder derivative actions captioned In re Virgin Galactic Holdings, Inc. Derivative Litigation, Case No. 1:22-cv-00933 (E.D.N.Y.) and St. Jean v. Branson et al., Case No. 1:22-cv-7551 (E.D.N.Y.).

As part of the settlement, the Company’s insurers will pay $2.75 million to Virgin Galactic, half of which the Company will retain, with the remaining half paid to plaintiffs’ counsel for attorneys’ fees and costs. In accordance with the District Court’s order, all claims in these actions, and all other claims related to or based upon the allegations in these actions, have been fully released.

In connection with the settlement, there was no finding of wrongdoing by the Company or any of its directors or officers.

About Virgin Galactic

Virgin Galactic is an aerospace and space travel company that enables safe, repeatable commercial human spaceflight and high-altitude scientific discovery. With its advanced air-launch vehicles and industry-leading cost structure, the company is preparing to take humans to space at an unprecedented rate, creating transformative personal experiences and supporting advanced suborbital study and strategic government initiatives. Discover how Virgin Galactic is driving innovation and scaling its business at https://www.virgingalactic.com/.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260818938468/en/

Check the Warning Signs for

SPCE

now!

Key Takeaways Walmart enters Q2 earnings with steady traffic, e-commerce growth and expanding omnichannel capabilities. WMT expects Q2 constant-currency sales growth of 4%-5% and operating income growth of 7%-10%. Walmart faces fuel-cost pressure, cautious lower-income consumers and a premium industry valuation. Walmart Inc. (WMT - Free Report) is set to report second-quarter fiscal 2027 results on Aug. 20, with healthy momentum supported by steady customer traffic, e-commerce and marketplace growth, a strong value proposition and expanding omnichannel capabilities. Investors will likely watch whether digital strength, higher unit volumes and an improving business mix can support profit growth despite elevated fuel costs and cautious consumer spending.

The Zacks Consensus Estimate for second-quarter revenues stands at $186.3 billion, indicating an increase of nearly 5% from the same period last year. The consensus mark for earnings has fallen by a penny in the past 30 days to 73 cents per share, which, however, suggests a 7.4% jump from the figure reported in the year-ago period.

Walmart has a trailing four-quarter negative surprise of 0.6%, on average. In the last reported quarter, the company delivered an earnings surprise of 1.5%.

What the Zacks Model Predicts for WMT’s Q2 EarningsAs investors prepare for WMT’s quarterly announcement, the question looms regarding an earnings beat or miss. Our proven model predicts an earnings beat for Walmart this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Walmart has a Zacks Rank #3 and an Earnings ESP of +0.71% at present. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Factors Likely to Aid WMT’s Q2 ResultsWalmart’s second-quarter performance is likely to have benefited from continued strength in its value proposition as consumers sought savings amid pressure on household budgets. Management entered the quarter with roughly 7,200 rollbacks and indicated that it would continue leaning into price investments to reinforce customer loyalty and market-share gains. The combination of everyday low prices, broader assortment and convenience is likely to have supported transactions and unit volumes. Management expects second-quarter constant-currency sales growth of 4%-5%.

Continued e-commerce and marketplace momentum is also likely to aid results. Walmart has been improving delivery speeds by leveraging its stores, clubs and fulfillment infrastructure, while broader third-party assortment has helped deepen customer engagement. Supply-chain automation and AI-led inventory and fulfillment improvements may have enhanced productivity and operating leverage.

The company’s evolving profit mix is likely to have remained another positive. Higher-margin advertising, membership and marketplace businesses have become increasingly meaningful contributors to profitability. Sam’s Club’s membership fee increase became effective May 1, potentially providing an incremental benefit during the quarter. Management expects second-quarter constant-currency operating income growth of 7%-10% and indicated that profitability should accelerate from first-quarter levels.

Potential Headwinds to WMT’s Q2 ResultsElevated fuel costs are expected to have remained a notable margin pressure and may have contributed to higher retail-price inflation. Lower-income consumers also appeared increasingly budget-conscious amid pressure on household spending, per the last earnings call.

Apart from this, management expects the merchandise-mix benefit in the second quarter to be less pronounced than in the prior quarter, which received some support from higher tax refunds. These factors may have partly offset the benefits from Walmart’s solid sales momentum and improving business mix.

WMT Stock Price PerformanceOver the past year, Walmart stock has rallied 12.9% compared with the industry’s growth of 11.6% and the Zacks Retail – Wholesale sector’s jump of 3.1%. Meanwhile, WMT underperformed the S&P 500’s 23.7% rise during the same period.

Image Source: Zacks Investment Research

In the said time frame, Walmart surpassed other retailers such as The Kroger Co. (KR - Free Report) , Costco Wholesale Corporation (COST - Free Report) and Dollar General Corporation (DG - Free Report) . While DG shares have gained 6.4% over the past year, KR and COST have declined 20.4% and 2.8%, respectively.

Walmart’s Valuation PictureWalmart shares are currently trading at a forward 12-month price-to-earnings (P/E) multiple of 36.98, above the industry average of 33.98 but below the stock’s one-year median of 38.67. The company also commands a sizable premium to peers Kroger and Dollar General, which trade at forward P/E multiples of 10.4 and 15.55, respectively. However, Walmart’s valuation remains below Costco’s multiple of 42.5.
 

Image Source: Zacks Investment Research

The premium valuation relative to the industry and several peers suggests that the market is assigning considerable value to Walmart’s scale, defensive characteristics, omnichannel capabilities and expanding higher-margin businesses. At the same time, the multiple leaves less room for execution missteps, making sustained sales and profit growth important for supporting the valuation.

How to Play WMT Stock Now?Walmart’s resilient traffic trends, e-commerce momentum, expanding higher-margin businesses and improving operating leverage offer a favorable setup ahead of the second-quarter release. The positive Earnings ESP and Zacks Rank #3 also point to increased odds of an earnings beat. However, elevated fuel costs, pressure on lower-income consumers and a premium valuation warrant some caution. Against this backdrop, existing investors may consider holding the stock, while new investors may prefer to await greater clarity on earnings momentum and margin trends.

Key Takeaways Target is set to report Q2 fiscal 2026 results on Aug. 19, with revenue and EPS estimates pointing to growth.Target's merchandising, digital convenience and inventory initiatives may have supported Q2 performance.Tough comparisons, first-half cost pressures and a recent share rally temper Target's favorable setup. With Target Corporation (TGT - Free Report) set to announce its second-quarter fiscal 2026 earnings results on Aug. 19, before the market opens, investors face a critical question: Can TGT continue its streak of surprising results, or will challenges in the retail space temper growth?

The Zacks Consensus Estimate for second-quarter revenues stands at $26.10 billion, indicating a 3.5% increase from the prior-year reported figure. On the earnings front, the consensus estimate has risen by a couple of cents to $2.26 per share over the past seven days, implying a 10.2% year-over-year jump.

Target has a trailing four-quarter earnings surprise of 8.2%, on average. In the last reported quarter, this Minneapolis-based company surpassed the Zacks Consensus Estimate by 21.3%.

Image Source: Zacks Investment Research

What the Zacks Model Indicates for TGT’s Q2 EarningsAs investors prepare for Target’s second-quarter results, the question looms regarding an earnings beat or miss. Our proven model predicts that an earnings beat is likely for Target this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Target has a Zacks Rank #2 and an Earnings ESP of +4.59%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Factors Likely to Have Shaped Target's Q2 OutcomeTarget’s sharpened merchandising strategy is likely to have supported second-quarter performance, with the retailer continuing to emphasize newness, relevance and value across key categories. Management entered the quarter with plans for a major refresh of its grocery assortment and the early stages of a broader reinvention of the home business while maintaining momentum in beauty, health and wellness, baby, toys and food. The 2026 FIFA World Cup, which kicked off in June, may also have provided an incremental traffic and demand tailwind during the quarter. Target has also been leaning into culturally relevant, exclusive partnerships and trend-driven assortments that can create excitement and encourage store visits.

Alongside merchandising improvements, Target has been investing in store staffing, training and operating tools with the aim of improving service, product availability and checkout experiences. It has also been working to improve inventory reliability, particularly in frequently purchased categories such as food, essentials and beauty, while using better forecasting and supply-chain visibility to keep products available when guests need them. These initiatives could have supported traffic and conversion by making stores easier to shop and reducing operational friction.

Target’s expanding digital and convenience ecosystem may also have contributed positively. The company continues to build around same-day fulfillment, Target Circle services, and its stores-as-hubs model, giving customers greater flexibility in how they shop and receive purchases. At the same time, businesses such as Roundel, Target Circle membership offerings, and the Target+ marketplace have been adding another layer of growth beyond traditional merchandise sales. Continued investments in stores, remodels, fulfillment capabilities and supply-chain infrastructure should also have helped Target better support digital demand while improving speed and reliability. Together, these efforts may have strengthened customer engagement and broadened the company’s sources of growth during the second quarter.

That said, management had cautioned about a tough year-over-year comparison as Target began cycling a strong prior-year period that benefited from a major gaming-product launch. The benefit from higher tax refunds seen in the first quarter should fade over the rest of the year. Cost pressures are another concern, as Target expected certain headwinds related to new-store openings, remodels and shrink to be more pronounced in the first half of the year.

Target Stock Price PerformanceTarget, which competes with Costco Wholesale Corporation (COST - Free Report) and Dollar General Corporation (DG - Free Report) , has seen its shares rally 18.7% against the industry’s decline of 2.2%. While shares of Costco have declined 12.9%, Dollar General has advanced 16%. 

TGT vs. Peers
Image Source: Zacks Investment Research

Does Target Present a Strong Case for Value Investing?Target’s valuation remains discounted relative to the industry. The stock currently trades at a forward 12-month P/E multiple of 17.34, well below the industry average of 31.18. However, TGT is trading above its 12-month median P/E of 14.46, suggesting that while the stock remains attractively valued versus peers, it is no longer as inexpensive relative to its recent historical range.

Target is trading at a discount to Costco (42.50) but at a premium to Dollar General (15.55).

TGT's P/E F12M Multiple
Image Source: Zacks Investment Research

Final Words on Target StockTarget appears well positioned heading into its second-quarter earnings release, supported by improving merchandising execution, stronger digital and convenience capabilities, better inventory availability and continued investments in the guest experience. The earnings setup also appears favorable, with the Zacks model indicating a higher likelihood of another earnings beat. Still, tougher year-over-year comparisons, first-half cost pressures and the stock’s recent rally warrant some restraint, particularly as the shares are no longer as inexpensive relative to their recent valuation history. Current investors may consider holding their positions ahead of the release, while prospective investors could look to accumulate the stock selectively rather than chase the recent gains. A stronger-than-expected second-quarter report and encouraging commentary could support further upside.

Home Depot Today

HD

Home Depot

$339.49 +1.61 (+0.48%)

As of 12:38 PM Eastern

This is a fair market value price provided by Massive. Learn more.

$289.10▼

$426.752.75%

24.11

$373.89

Home Depot’s NYSE: HD stock price signaled a trend-following entry earlier this year, having completed a head-and-shoulders reversal at a critical uptrend line.

Momentum was recently boosted by a solid Q2 report, which revealed inherent strengths despite the tepid housing market, with professional and small projects contributing to growth and margin. The impact of IEEPA tariff refunds was in the mix, but viewed as a positive, given unexpectedly higher input costs.

Get Home Depot alerts:

Home Depot’s capital return, centered on dividends, remains safe and reliable. The outlook for sustainability and distribution increases is improving, and that’s what keeps buy-and-hold investors who own so much of HD stock in the mix. HD’s buy-and-hold quality is reflected in its institutional holdings, which account for 70% of the float, and its retail holdings, which account for virtually all of the remaining shares.

Institutions, the larger of the two groups, provide a solid support base, with their activity aligning with the technical Buy signal. MarketBeat data reveals them accumulating at a robust 4.5-to-1 pace over the trailing 12 months, with activity ramping in early Q3 ahead of the Q2 release. The Q3 ramp is particularly telling, as it is the strongest buying signal the group has given in approximately three years.

Home Depot's Q2 Tops Estimates on Stronger-Than-Expected DemandHome Depot had a decent quarter, with revenue growing by 5.7% to $47.9 billion, about $660 million better than expected. The 140 basis points of outperformance came from solid comps, up 1.7%, with a transaction decline offset by a higher ticket average. Within the mix, small projects were a surprising strength, helping to offset price increases and keep margins healthy.

Margin was a strength, though mixed factors are at play. On the one hand, costs are rising, leading to margin contraction and slower earnings growth. On the other hand, operational performance, unexpected consumer strength, leverage from new stores, and the impact of tariff refunds largely offset the cost increase.

Net income of $4.8 billion was up approximately 5% year-over-year, as was the adjusted $4.92 in earnings per share (EPS), and both came in better than forecasted. Adjusted EPS outperformed MarketBeat’s consensus by approximately 400 basis points, suggesting the guidance is cautious.

The company reaffirmed guidance, calling for about 3.5% revenue growth, 1% comp store growth, about 2% EPS growth, and 15 new stores. EPS growth is underpinned by tariff refunds, which are expected to continue offsetting cost increases, but fundamental strengths are also present. The growing store count and comp-store strength suggest outperformance is possible.

Home Depot Analysts See a Path to $375 and BeyondThe analysts' response to the release included caution, specifically focused on margin compression and cost increases, but was otherwise very bullish.

Home Depot Stock Forecast Today12-Month Stock Price Forecast:
$373.89
9.29% Upside

Moderate Buy
Based on 32 Analyst Ratings

Current Price$342.10High Forecast$430.00Average Forecast$373.89Low Forecast$310.00Home Depot Stock Forecast Details

Analysts from Wells Fargo, Royal Bank of Canada, and Jefferies cited margin outperformance, comp-store strength, and surprising strength in small projects in their commentaries. They highlighted the importance of tariff refunds amid rising costs, but see an improved setup and a higher stock price by year’s end. The implication is clear: renewed confidence in the 12-month forecast, which pegs the stock as a Moderate Buy with a price target near $375.

That consensus price target doesn't represent a robust upside, but rather is a stepping stone to higher prices down the road. A move to $375 would put this market in the high end of its trading range and on track for a breakout. The question is when it will come, and it may not be until well into 2027. By then, the market should have a clearer view.

High Rates Keep Home Depot's Recovery on HoldThe next major catalyst for Home Depot is the unsticking of housing markets, which is not expected until later in 2027, if at all in 2027. The primary hurdle is interest rates, which are unlikely to fall substantially in the foreseeable future. The more likely scenario is that rates remain high through year’s end and well into next year, given high prices and their impact on inflation.

Until then, small projects and maintenance will continue to drive Home Depot’s business and dividend payments. Worth an annualized 2.7% while near the critical support level, HD’s dividend payment is about 65% of its earnings, has been increased for more than 15 consecutive years, and runs a high-single-digit compound annual growth rate.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Should You Invest $1,000 in Home Depot Right Now?Before you consider Home Depot, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Home Depot wasn't on the list.

While Home Depot currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

MarketBeat just released its list of the 7 hottest IPOs expected to hit Wall Street in 2026. See which companies are preparing to go public and why investors are watching closely.

Get This Free Report

On Aug. 4, McDonald's (MCD +1.16%) reported that U.S. same-store sales growth slowed to just 0.8% as "business slowed significantly" in the second quarter. CEO Chris Kempczinski pinned the shortfall on the company's own execution, and U.S. chief Joe Erlinger was replaced the same day in what the company called a "planned transition."

For a brand built on consistency, the results since last year have been anything but. That's when traffic patterns within the restaurant industry began to change as diners became more value-conscious.

At roughly 20.5 times forward earnings, the stock trades below its five-year average, pricing in modest earnings growth from here. So, is this an opportunity now for investors?

Image source: The Motley Fool.

The value prop didn't register McDonald's spent years raising prices to offset inflation. By last fall, Kempczinski acknowledged that lower-income diners had been pulling back for a couple of years. The company responded by relaunching Extra Value Meals, which drove a recovery, with U.S. same-store sales growing 3.9% in the first quarter of 2026. In April, management expanded the value platform with a new under-$3 menu and a $4 breakfast meal deal.

But the rollout gave operators too much leeway, leading a third of franchisees to price items higher than originally intended. To fund the new menu, management also pulled back on digital offers and removed the Buy One, Add One for $1 deal that loyal customers relied on. Kempczinski called the combination "a bad trade."

Traffic fell in the second quarter, even as comps rose 0.8% on higher average checks. Management said U.S. comps were "slightly negative" in July, and the timeline for a fix could run beyond the third quarter. The company also pushed its 50,000-restaurant target back a year, to 2028, citing the consumer backdrop and higher development costs.

The landlord has staying power McDonald's is a burger chain that doubles as one of the world's largest landlords. The company collects more than $10 billion in annual rent from its franchisees. It owns the buildings of roughly 80% of its 45,000-plus restaurants and the land under about 56% of them.

This real estate portfolio, in which rent tops royalties by billions of dollars a year, provides the stability that has funded 49 consecutive years of dividend increases. But the same model that delivers the rent can slow things down when the value message needs to move in lock-step.

The same week, Restaurant Brands International reported that U.S. same-store sales at Burger King jumped 8.5%, its second straight quarter of accelerating growth. In Q2, Burger King beat the U.S. burger industry by more than nine points. Four years into a rebuild of its restaurants and operations, Burger King is winning back traffic with a better Whopper.

Today's Change

(

1.16

%) $

3.09

Current Price

$

268.62

For McDonald's, it'll take time to get the value message aligned, but the company's rent stream amply covers the 2.7% dividend yield. Investors should watch for guest counts in the U.S. to turn positive and for details on its strategy at the company's Investor Day on Sept. 23.

At roughly 20.5 times forward earnings, the stock trades below its five-year average, offering a reasonable price for patient investors.

AMG National Trust Bank purchased a new stake in Chevron Corporation (NYSE:CVX – Free Report) in the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The firm purchased 42,697 shares of the oil and gas company’s stock, valued at approximately $7,077,000.

Several other hedge funds and other institutional investors also recently added to or reduced their stakes in CVX. Norges Bank purchased a new position in Chevron during the 4th quarter worth approximately $3,727,586,000. Bank of New York Mellon Corp purchased a new stake in shares of Chevron during the 2nd quarter worth approximately $2,378,114,000. State Street Corp lifted its holdings in shares of Chevron by 9.1% in the third quarter. State Street Corp now owns 152,605,988 shares of the oil and gas company’s stock valued at $23,698,184,000 after purchasing an additional 12,789,399 shares in the last quarter. Berkshire Hathaway Inc lifted its stake in Chevron by 6.6% in the 4th quarter. Berkshire Hathaway Inc now owns 130,156,362 shares of the oil and gas company’s stock valued at $19,837,131,000 after buying an additional 8,091,570 shares in the last quarter. Finally, Northwestern Mutual Wealth Management Co. increased its position in Chevron by 822.0% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 6,211,258 shares of the oil and gas company’s stock worth $946,658,000 after purchasing an additional 5,537,580 shares in the last quarter. Institutional investors and hedge funds own 72.42% of the company’s stock.

Analyst Upgrades and Downgrades Several brokerages have weighed in on CVX. Jefferies Financial Group reiterated a “buy” rating and issued a $216.00 price target on shares of Chevron in a report on Friday, July 10th. UBS Group reissued a “buy” rating on shares of Chevron in a research report on Tuesday, June 23rd. Wolfe Research upgraded shares of Chevron from a “peer perform” rating to an “outperform” rating and set a $210.00 price target on the stock in a report on Thursday, July 2nd. Mizuho set a $224.00 price target on shares of Chevron in a report on Monday, August 3rd. Finally, Weiss Ratings raised shares of Chevron from a “hold (c)” rating to a “buy (b)” rating in a research report on Tuesday, August 11th. Twenty investment analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, Chevron currently has a consensus rating of “Moderate Buy” and an average target price of $207.13.

Get Our Latest Report on Chevron Chevron News Roundup Here are the key news stories impacting Chevron this week:

Positive Sentiment: Major Angola discovery expands Chevron’s resource base. Chevron’s 105-4X exploration well in offshore Angola’s Block 0 encountered a hydrocarbon column exceeding 600 meters (about 2,000 feet), including more than 90 meters of net pay in the primary Pinda reservoir. The size of the find strengthens the company’s long-term production outlook and supports its strategic exploration program in Sub-Saharan Africa. Reuters article Positive Sentiment: Potential tie-in could reduce development costs. The discovery is located near existing Block 0 infrastructure, creating the possibility of a relatively efficient tie-back and potentially accelerating development while limiting capital requirements. However, commerciality, appraisal work and a development timeline have not yet been established. Chevron Stock Rises After Major Angola Discovery Positive Sentiment: Higher oil prices provide additional sector support. Reports that Brent crude was approaching $89 a barrel amid continued disruption and uncertainty around the Strait of Hormuz are supportive of Chevron’s upstream revenue and cash-flow prospects, although the geopolitical situation also raises market and operating risks. Brent Crude Nears $89 Neutral Sentiment: Income appeal remains part of the investment case. Chevron continues to be highlighted by analysts as a dividend-paying energy major with potential upside, but the dividend coverage and valuation were not materially changed by these reports. Dividend Stocks Article Insider Activity at Chevron In related news, CEO Michael K. Wirth sold 5,547 shares of the business’s stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $187.00, for a total value of $1,037,289.00. Following the completion of the sale, the chief executive officer owned 26,308 shares of the company’s stock, valued at approximately $4,919,596. The trade was a 17.41% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Also, Director John B. Hess sold 100,000 shares of the stock in a transaction that occurred on Monday, August 3rd. The stock was sold at an average price of $194.26, for a total value of $19,426,000.00. Following the completion of the transaction, the director owned 178,045 shares in the company, valued at $34,587,021.70. This represents a 35.97% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders sold 1,196,212 shares of company stock valued at $231,819,366. 0.56% of the stock is currently owned by company insiders.

Chevron Price Performance NYSE CVX opened at $202.75 on Tuesday. The company has a 50-day moving average price of $183.57 and a two-hundred day moving average price of $187.25. Chevron Corporation has a 52 week low of $146.49 and a 52 week high of $214.71. The stock has a market cap of $400.59 billion, a price-to-earnings ratio of 19.44, a price-to-earnings-growth ratio of 0.61 and a beta of 0.49. The company has a current ratio of 1.25, a quick ratio of 0.98 and a debt-to-equity ratio of 0.19.

Chevron (NYSE:CVX – Get Free Report) last issued its quarterly earnings data on Friday, July 31st. The oil and gas company reported $6.06 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $5.55 by $0.51. Chevron had a return on equity of 11.09% and a net margin of 9.57%.The business had revenue of $67.20 billion during the quarter, compared to analyst estimates of $62.72 billion. During the same period in the prior year, the company posted $1.77 EPS. The business’s revenue for the quarter was up 57.4% compared to the same quarter last year. Analysts forecast that Chevron Corporation will post 15.86 EPS for the current year.

Chevron Dividend Announcement The company also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Wednesday, August 19th will be issued a dividend of $1.78 per share. This represents a $7.12 annualized dividend and a dividend yield of 3.5%. The ex-dividend date is Wednesday, August 19th. Chevron’s payout ratio is currently 68.26%.

Chevron Company Profile (Free Report)

Chevron Corporation (NYSE: CVX) is an American multinational energy company engaged in virtually all aspects of the oil and gas industry. As an integrated energy firm, Chevron’s core activities include upstream oil and natural gas exploration and production, midstream transportation and storage, downstream refining and marketing of fuels and lubricants, and petrochemical manufacturing through joint ventures and subsidiaries. The company markets fuels under brands such as Chevron, Texaco and Caltex and supplies a range of products and services to retail customers, industrial users and commercial fleets worldwide.

Chevron traces its corporate lineage to the early petroleum companies that eventually became Standard Oil of California and has evolved through significant mergers and restructurings, including the acquisitions of Gulf Oil and Texaco.

See Also Five stocks we like better than Chevron Commodities Are Booming, But These 3 ETFs Tell Different Stories 3 Active ETFs Making Big Moves in August This ETF Is Outperforming by Avoiding the S&P 500’s Biggest Problem Birkenstock Beats the Skeptics—But Not on EPS Want to see what other hedge funds are holding CVX? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Chevron Corporation (NYSE:CVX – Free Report).

Receive News & Ratings for Chevron Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Chevron and related companies with MarketBeat.com's FREE daily email newsletter.

Key Takeaways Western Gateway, spanning 1,300 miles, may expand daily capacity from 230,000 barrels to 320,000 barrels. Western Gateway is expected to improve Phillips 66's market access, logistics flexibility & product placement.The 10-year take-or-pay contracts should support PSX's cash flow when Western Gateway enters service in 2029. Phillips 66 (PSX - Free Report) is using its midstream business to build a more stable cash-flow base, alongside its refining operations. In the second quarter of 2026, Midstream adjusted EBITDA increased to $1.05 billion from $860 million in the first quarter, supported by record natural gas liquids fractionation and liquefied petroleum gas export volumes. Management expects the Midstream segment, along with the Marketing and Specialties segments, to provide consistent cash generation and targets a $4.5-billion Midstream adjusted EBITDA run rate by the end of 2027.

Western Gateway is likely to enhance PSX’s cash-flow potential, supported by its 49.9% ownership stake and $2.5 billion investment. The planned 1,300-mile refined-products system will initially have capacity of 230,000 barrels per day, with potential expansion to 320,000 barrels per day. Primarily 10-year take-or-pay contracts should support long-term cash generation once the project enters service in 2029. Its ability to expand capacity with limited additional capital and without new pipe could allow PSX to benefit from rising demand while limiting incremental investment.

Western Gateway is poised to strengthen Phillips 66’s refining business by connecting its Central Corridor and Gulf Coast refining assets with its West Coast and Southwest marketing network. This additional outlet will improve market access, logistics flexibility and product placement while supporting refinery throughput and regional margins. Thus, Western Gateway is expected to generate direct midstream returns while creating indirect benefits for PSX’s refining operations.

MPC & DINO Have Similar Advantages As PSXMarathon Petroleum (MPC - Free Report) and HF Sinclair (DINO - Free Report) stand out as peers with midstream operations that support their refining businesses through stronger logistics and market access.

Marathon Petroleum conducts its midstream business primarily through its majority ownership interest in MPLX, whose pipelines, terminals, storage and marine assets are integrated with MPC’s refining system. MPLX’s infrastructure moves crude and refined products and provides logistics flexibility, helping MPC optimize refinery feedstocks, product placement and access to higher-value markets. In second-quarter 2026, MPC’s Midstream adjusted EBITDA increased to $1.8 billion from $1.6 billion a year earlier, demonstrating the growing contribution of the business to MPC’s cash-generation profile.

HF Sinclair has an integrated midstream network that supports its refining and marketing operations across the Mid-Continent, Southwest and Northwest regions. DINO’s crude and petroleum-product pipelines, terminals and storage facilities provide logistics flexibility and help move refinery output to attractive markets. DINO is pursuing its Go-West pipeline initiative, which is expected to increase access to western markets and strengthen the connection between its refining assets and growing fuel demand.

PSX’s Price Performance, Valuation & EstimatesPhillips 66 shares have surged 95.9% over the past year compared with the industry’s 83.9% growth.

Image Source: Zacks Investment Research

From a valuation standpoint, PSX trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 10.82X. This is above the broader industry average of 5.55X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for PSX's third-quarter 2026 earnings has seen downward revisions over the past seven days. Meanwhile, estimates for fourth-quarter and 2026 earnings have seen upward revisions.

Image Source: Zacks Investment Research

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