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Tencent Music Entertainment Group Sponsored ADR (NYSE: TME - Get Free Report) was the target of unusually large options trading activity on Wednesday. Traders bought 2,335 call options on the company. This is an increase of 23% compared to the typical daily volume of 1,906 call options. Tencent Music Entertainment Group Stock Down 9.5% Shares of

Shares of Tencent Music Entertainment (TME 0.43%) fell 28.8% this week through 3:30 p.m. Friday, according to data from S&P Global Market Intelligence.

Tencent Music is sometimes regarded as the "Spotify (SPOT 1.07%) of China," since it's the leading streaming music subscription service in the country. However, Tencent Music's business is a bit different, as it also generates revenue from social music interactions, such as karaoke tipping and other interactive services.

This week, Tencent Music held its fourth-quarter earnings. While the headline numbers themselves weren't bad, some concerns emerged over certain KPIs (key performance indicators). Management also said it would no longer disclose certain KPIs going forward, fueling more investor skepticism.

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Subscriber deceleration overshadows a revenue beat In the fourth quarter, Tencent Music grew revenue 15.9% to $1.24 billion, which beat expectations, while adjusted (non-GAAP) earnings per American Depositary Share (ADS) were up a lower 8.8%, just meeting expectations.

Whenever a company grows profits at a lower rate than revenues, it could suggest that it's feeling competitive pressure. Moreover, investors appeared concerned about the slowdown in the subscription business, which grew just 13.2%, down from roughly 17% in the prior quarter. In general, investors like to see more revenue from subscriptions, which are perceived as "recurring" and higher quality, rather than advertising or other services that may be cyclical or more fleeting.

Adding to the anxiety was Tencent Music saying that it would no longer disclose quarterly online music monthly active users (MAUs), the number of paying users, or average revenue per user (ARPU). Instead, Tencent Music will only disclose total paying users at the end of each year.

As justification, management wrote:

... our business model has significantly evolved in recent years. As advertising and other IP-related offerings scale, and as we offer multi-tiered membership for online music subscriptions, the business impact of each paid membership varies. As a result, we are increasingly focused on revenue and profit as our primary performance indicators.

Investors never tend to like it when management discloses less about a business, so it's no surprise the stock sold off.

Image source: Getty Images.

Has TME gotten too cheap? After the sell-off, Tencent Music's stock trades at just 11.5 times trailing adjusted earnings per ADS.

That seems too cheap for the stock, which, even though revenue and earnings are slowing, did manage to grow adjusted earnings by close to 22% for the full year in 2025.

In short, the sell-off sparked by the removal of certain disclosures may create an opportunity for value investors to buy Tencent Music stock at a very cheap price today -- that is, for those comfortable owning Chinese stocks in their portfolio.

Tencent Music Entertainment Group NYSE: TME is China’s music streaming leader, amassing a huge market share. The entertainment company boasts approximately 528 million monthly active users (MAUs) and generated $1 billion in revenue from online music services in its latest quarter.

Tencent Music Entertainment Group Today

TME

Tencent Music Entertainment Group

$9.22 -0.05 (-0.49%)

As of 03:59 PM Eastern

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

52-Week Range$8.44▼

$26.70Dividend Yield2.50%

P/E Ratio11.52

Price Target$21.44

Meanwhile, the company’s top competitor, NetEase NASDAQ: NTES, brought in just $282 million in music revenue. With such a wide lead in revenue share, the “Spotify of China” is a fitting moniker for Tencent Music Entertainment.

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However, unlike Spotify Technology NYSE: SPOT, an emerging competitor is taking serious swings at TME’s dominance, frightening investors. This has been one of the key factors that have caused the stock to fall more than 60% from its 52-week high. However, given this name’s precipitous decline, there is reason to believe markets are overly pessimistic about TME’s future. At current levels, the stock may be able to stage a significant recovery.

Is Bytedance Sinking Its Teeth Into TME’s Users? In its latest quarter, TME put up solid results. Revenues rose by just under 16% year over year (YOY) to $1.24 billion, exceeding estimates near $1.23 billion. Adjusted earnings per depository share rose by 9% to 23 cents per share, in line with estimates. Despite these figures being well within expectations, shares fell 32% in the two days following the results. Investors seem to be worrying about a threat bubbling under the surface.

Bytedance is one of the largest privately owned companies in the world, recently valued at $550 billion. For reference, this figure is around $100 billion higher than the market capitalization of Costco Wholesale NASDAQ: COST. The company rose to prominence by creating TikTok.

Bytedance subsidiary Douyin (the Chinese version of TikTok) has been scaling its Soda Music platform at a breakneck clip. Its MAUs reached 120 million in September 2025, good for YOY growth of 90%. Six months later, that figure reportedly has increased to 140 million.

Especially when considering the trajectory of TME’s user base, it makes some sense why market participants are running for the hills. Although revenues rose strongly, Tencent saw a 5% YOY decrease in its MAUs in Q4 2025. This marks a continued acceleration in MAU decline, with the figure dropping by 4.3% in Q3 2025 and 3.2% in Q2 2025.

Many investors are likely worried that these users are defecting to Soda Music and that this decline will gain more momentum. As user count declines, TME’s monetizable base also falls, leading to concerns around the company’s future growth.

However, several factors suggest the reaction to these fears is overblown.

TME’S High Value Strategy Is Translating into Financial Gains Although Tencent's total MAUs are falling, the company's paying users are on the rise. Paying users increased during the quarter by 5.3% YOY to 127 million. Paying users are also increasing how much they spend. The company’s monthly average revenue per paying user increased by 7.2% YOY to approximately $1.70.

This shows that although low-value, non-paying users are falling, high-value paying users continue to increase. This dynamic is generating growth and greater profits at Tencent, despite what is happening at Soda Music. This comes as Soda specifically targets free and low-tier users, and the company has a “far inferior” content library compared to Tencent.

Rather than licensing large amounts of full-scale albums and rights, the firm leverages Douyin for much of its content. When Douyin creators release short-form videos featuring songs, users can seamlessly transition to Soda Music to listen to the whole track. In contrast, TME invests heavily in relationships with top-tier music labels and artists.

TME is offering a premium service, while Soda Music is attracting users further down the value chain. As the companies are targeting two fundamentally different types of listeners, it stands to reason that both firms can continue to grow in their niches. This is especially true for TME, considering that although total users are falling, they still far exceed paying users. At 528 million total users versus 127 million paying users, the firm still has a very large pool of more than 400 million non-paying users it can convert.

Still, there is a threat that Soda Music could look to target high-value users over time by expanding its offerings.

TME: Further Growth Could Lead to Significant Gains Overall, TME’s ability to continue growing is key when considering its valuation. Shares have fallen so far that they suggest the firm will see negative free cash flow growth over a multi-year period. Meanwhile, free cash flow has grown at a compound annual rate of around 11% over the past few years. However, growth did slow to 7.3% in 2025.

Tencent Music Entertainment Group Sponsored ADR (TME) Price Chart for Friday, June, 12, 2026

Still, markets seem to be pricing in a situation that is more bearish than the evidence suggests. With TME continuing to grow revenue and profits through high-value users, there is a significant chance that free cash flow can continue expanding as well. Should this play out, substantial long-term upside could be in store.

Notably, Wall Street analysts disagree on TME’s outlook. The MarketBeat consensus price target near $22 implies huge upside near 140%. However, targets updated after the company’s earnings report range from $12 to $23. The average of these targets is above $17, still implying more than 80% upside.

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Investors in Tencent Music Entertainment Group (TME - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Apr 17, 2026 $33 Call had some of the highest implied volatility of all equity options today.

What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?Clearly, options traders are pricing in a big move for Tencent Music Entertainment shares, but what is the fundamental picture for the company? Currently, Tencent Music Entertainment is a Zacks Rank #4 (Sell) in the Media Conglomerates industry that ranks in the Top 26% of our Zacks Industry Rank. Over the last 30 days, no analysts have increased their earnings estimates for the current quarter, while two analysts have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from 23 cents per share to 21 cents in that period.

Given the way analysts feel about Tencent Music Entertainment right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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Published in consumer-discretionary

, /PRNewswire/ -- Tencent Music Entertainment Group ("TME", or the "Company") (NYSE: TME and HKEX: 1698), the leading online music and audio entertainment platform in China, today announced that it has filed its annual report on Form 20-F that includes its audited financial statements for the fiscal year ended December 31, 2025 with the Securities and Exchange Commission (the "SEC") on April 17, 2026, U. S. Eastern Time.

The annual report can be accessed on TME's investor relations website at ir.tencentmusic.com and on the SEC's website at www.sec.gov. The Company will also provide a hard copy of the annual report containing its audited consolidated financial statements, free of charge, to its shareholders and American Depositary Share holders upon request.

About Tencent Music Entertainment

Tencent Music Entertainment Group (NYSE: TME and HKEX: 1698) is the leading online music and audio entertainment platform in China, operating the country's highly popular and innovative music apps: QQ Music, Kugou Music, Kuwo Music and WeSing. TME's mission is to create endless possibilities with music and technology. TME's platform comprises online music, online audio, online karaoke, music-centric live streaming and online concert services, enabling music fans to discover, listen, sing, watch, perform and socialize around music. For more information, please visit ir.tencentmusic.com.

Investor Relations Contact
Tencent Music Entertainment Group
[email protected]
+86 (755) 8601-3388 ext. 885034

SOURCE Tencent Music Entertainment Group

Posted by Defense World Staff on Apr 27th, 2026

Shares of Tencent Music Entertainment Group Sponsored ADR (NYSE:TME – Get Free Report) have received an average recommendation of “Hold” from the fourteen brokerages that are currently covering the stock, Marketbeat reports. One research analyst has rated the stock with a sell recommendation, seven have issued a hold recommendation and six have given a buy recommendation to the company. The average 12 month price target among brokers that have issued a report on the stock in the last year is $22.0250.

Several research firms recently commented on TME. Morgan Stanley reaffirmed an “equal weight” rating on shares of Tencent Music Entertainment Group in a research report on Thursday, March 19th. Zacks Research lowered shares of Tencent Music Entertainment Group from a “hold” rating to a “strong sell” rating in a research note on Friday, April 17th. Benchmark reiterated a “hold” rating on shares of Tencent Music Entertainment Group in a research note on Wednesday, March 18th. Barclays lowered their price target on shares of Tencent Music Entertainment Group from $28.00 to $20.00 and set an “overweight” rating on the stock in a research note on Thursday, March 19th. Finally, Mizuho lowered their price target on shares of Tencent Music Entertainment Group from $28.00 to $23.00 and set an “outperform” rating on the stock in a research note on Wednesday, March 18th.

View Our Latest Research Report on Tencent Music Entertainment Group

Tencent Music Entertainment Group Trading Down 0.0% TME opened at $9.34 on Monday. The stock has a market capitalization of $14.46 billion, a P/E ratio of 9.43, a P/E/G ratio of 0.61 and a beta of 0.80. Tencent Music Entertainment Group has a 12 month low of $8.78 and a 12 month high of $26.70. The firm’s fifty day simple moving average is $11.69 and its 200 day simple moving average is $16.33. The company has a current ratio of 2.22, a quick ratio of 2.22 and a debt-to-equity ratio of 0.04.

Tencent Music Entertainment Group Increases Dividend The firm also recently declared an annual dividend, which was paid on Thursday, April 23rd. Shareholders of record on Thursday, April 2nd were paid a $0.24 dividend. This represents a yield of 262.0%. The ex-dividend date was Thursday, April 2nd. This is an increase from Tencent Music Entertainment Group’s previous annual dividend of $0.18. Tencent Music Entertainment Group’s dividend payout ratio (DPR) is presently 23.23%.

Institutional Investors Weigh In On Tencent Music Entertainment Group Several hedge funds and other institutional investors have recently added to or reduced their stakes in TME. Robeco Institutional Asset Management B.V. increased its stake in shares of Tencent Music Entertainment Group by 7.3% during the 4th quarter. Robeco Institutional Asset Management B.V. now owns 5,706,740 shares of the company’s stock worth $100,039,000 after purchasing an additional 387,109 shares during the last quarter. SG Americas Securities LLC increased its stake in shares of Tencent Music Entertainment Group by 85.7% during the 4th quarter. SG Americas Securities LLC now owns 542,198 shares of the company’s stock worth $9,505,000 after purchasing an additional 250,261 shares during the last quarter. Green Court Capital Management Ltd increased its stake in shares of Tencent Music Entertainment Group by 93.1% during the 3rd quarter. Green Court Capital Management Ltd now owns 1,039,078 shares of the company’s stock worth $24,252,000 after purchasing an additional 501,078 shares during the last quarter. Campbell & CO Investment Adviser LLC acquired a new position in shares of Tencent Music Entertainment Group during the 3rd quarter worth about $4,257,000. Finally, Zurcher Kantonalbank Zurich Cantonalbank increased its stake in shares of Tencent Music Entertainment Group by 414.3% during the 4th quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 1,130,608 shares of the company’s stock worth $19,820,000 after purchasing an additional 910,767 shares during the last quarter. 24.32% of the stock is currently owned by institutional investors and hedge funds.

About Tencent Music Entertainment Group (Get Free Report)

Tencent Music Entertainment Group (NYSE: TME) is a China-based digital music and audio entertainment platform that operates a portfolio of leading music streaming and social entertainment services. Its core consumer-facing products include streaming apps, online karaoke (KTV) services and live music and entertainment broadcasts. The company monetizes its content through a mix of subscriptions, digital music sales, in-app purchases, virtual gifting, advertising and licensing arrangements with rights holders.

The company traces its roots to the consolidation of Tencent’s music assets and was established in the mid-2010s to unify several prominent music properties under a single operating entity.

See Also Five stocks we like better than Tencent Music Entertainment Group

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• Tencent Music stock is trading at depressed levels. Where is TME stock headed?.

Analyst Flags Slowing Growth TrendsJiang noted on Wednesday that Tencent Music delivered largely in-line first-quarter 2026 results, with revenue rising 7% year-over-year to 7.9 billion Chinese yuan (~ $1,163,312,920).

Online music services revenue increased 12%, supported mainly by non-subscription businesses, while subscription growth slowed to 8% from 13% in the previous quarter.

She added that non-subscription music revenue climbed 23% year over year due to strong demand for live events, merchandise, and fan-focused offerings, while social entertainment revenue fell 11%.

Adjusted profit per ADS came in at 1.46 Chinese yuan (21 cents), matching consensus estimates.

Jiang Cuts Second-Quarter Revenue OutlookJiang lowered the second-quarter revenue growth forecast to 4% Y/Y from 9% previously, citing mounting industry headwinds and intensifying competition.

She also reduced her subscription growth projection to 3% from 6%, saying changing consumption trends are pressuring customer conversion and retention.

While Jiang remains positive on momentum in concerts and live events, she warned that advertising demand, fan monetization, and IP-related revenue could face near-term pressure.

Jiang added that rapid AI-driven changes in content creation and distribution, along with rising piracy risks, are creating additional uncertainty for Tencent Music's revenue outlook.

Ximalaya Deal Could Support FY26 OutlookJiang said the pending Ximalaya acquisition could help stabilize Tencent Music's 2026 outlook after receiving conditional approval from China's SAMR regulator.

She noted that the deal could add revenue and profit contributions that offset weaker organic growth trends, particularly in subscriptions and advertising.

However, Jiang said she wants clearer visibility into deal execution, financial impact and potential synergies before becoming more constructive on the stock.

TME Price Action: Tencent Music shares were down 1.38% at $8.94 at the time of publication on Wednesday. The stock is trading near its 52-week low of $8.74, according to Benzinga Pro data.

Photo via Shutterstock

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Key Takeaways RS has completed 76 acquisitions since 1994, expanding products and value-added processing.RS repurchased $594.1M worth of shares in 2025, raised its dividend 4.2% and ended 2025 with $216.6M in cash.RS faces headwinds from soft semiconductor and aerospace demand and higher aluminum costs. Reliance, Inc. (RS - Free Report) benefits from growth led by strategic acquisitions, a diversified business and product portfolio, and strong liquidity amid headwinds from weakness in select markets and cost pressures caused by tariffs.

RS’ shares have gained 3.5% in the past year compared with the Zacks Mining – Miscellaneous industry’s 38.6% rise.

Image Source: Zacks Investment Research

Let’s find out why RS stock is worth retaining at the moment.

RS Stock Gains on Acquisitions & Strong LiquidityReliance benefits from a resilient business model serving diverse end markets, strong execution and a sustained push for growth through acquisitions. The company has long pursued an aggressive acquisition strategy as a core driver of operating performance, completing 76 deals since its 1994 IPO, expanding both its product mix and value-added processing capabilities.

The acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals align with its strategy of investing in high-quality businesses. The buyout of Southern Steel Supply also expanded the company’s reach in the Southern United States and boosted its value-added processing services.

The buyout of Cooksey Iron & Metal Co boosts Reliance's presence in the fast-growing Southeastern market. The acquisition of American Alloy has expanded Reliance's product portfolio with specialty carbon steel plates as well as new production capabilities. The integration of FerrouSouth’s tolling operations also enhanced its toll processing capabilities and expanded capacity for Feralloy’s existing operations in the Southeastern United States.

Meanwhile, demand for non-residential construction, including infrastructure, Reliance’s largest end market by volume, strengthened in the fourth quarter of 2025 compared with the prior-year quarter. The company expects demand in this sector to remain healthy through the first quarter of 2026, supported by ongoing investment in data centers, manufacturing facilities and public infrastructure projects.

The company’s strong liquidity position also allows it to drive shareholder value. Reliance repurchased approximately 716,000 shares of its common stock during the fourth quarter for $200.1 million. RS also bought back shares worth $594.1 million during 2025.

The company’s board, in February 2026, raised its quarterly dividend by 4.2% to $1.25 per share. RS ended 2025 with cash and cash equivalents of $216.6 million. It generated $831.4 million in cash flow from operations during 2025, aided by prudent working capital management and profitability. RS deployed $1.18 billion of capital toward stockholder returns and organic growth activities last year.

Demand and Cost Headwinds Ail RelianceWhile Reliance is experiencing growth across several key markets, the semiconductor segment remains a weak link. Demand stayed soft in the fourth quarter compared with the prior year, as elevated inventories across the supply chain continued to dampen activity. The company expects these headwinds to carry into the first quarter.

Demand in the commercial aerospace market also remains soft, weighed down by elevated inventory levels across the supply chain. While Reliance expects a gradual recovery in 2026 driven by higher build rates, weakness in this segment is likely to persist through the first quarter.

Reliance also faces challenges from aluminum cost inflation due to tariffs amid an elevated supply and soft demand environment. Higher-than-expected aluminum costs led to last-in, first-out (“LIFO”) expense of $114 million for 2025 compared with the company’s estimate of $100 million, weighing on margins. RS sees LIFO expense of $100 million in 2026, mainly from higher carbon and aluminum product costs.

RS’ Zacks Rank & Key PicksRS currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Basic Materials space include DuPont de Nemours, Inc. (DD - Free Report) , Compass Minerals International, Inc. (CMP - Free Report) and Balchem Corporation (BCPC - Free Report) .

While DD and CMP sport a Zacks Rank #1 (Strong Buy) each at present, BCPC carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for DD’s 2026 earnings is pegged at $2.28 per share, indicating an increase of 35.7% year over year. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 6.5%.

The Zacks Consensus Estimate for CMP’s current fiscal year earnings is pinned at 89 cents per share, indicating a 285.4% year-over-year increase. The Zacks Consensus Estimate for CMP’s current fiscal year earnings has been revised 27.1% upward over the past 60 days.

The Zacks Consensus Estimate for BCPC’s 2026 earnings is pinned at $5.47 per share, indicating a 6.2% year-over-year increase. The Zacks Consensus Estimate for BCPC’s 2026 earnings has been revised 1.1% upward over the past 60 days.

April 08, 2026 06:50 ET  | Source: Reliance, Inc.

PHOENIX, April 08, 2026 (GLOBE NEWSWIRE) -- Reliance, Inc. (NYSE:RS) announced today that it will report first quarter 2026 financial results for the period ended March 31, 2026, on Wednesday, April 22, 2026, after the market closes. Reliance management will host a conference call on Thursday, April 23, 2026, at 11:00 a.m. Eastern Time. The call will be broadcast live over the Internet hosted on the Investors section of the Company's website at reliance.com.

Reliance, Inc. First Quarter 2026 Conference Call Details

DATE:   Thursday, April 23, 2026     TIME:   8:00 a.m. Pacific Time
10:00 a.m. Central Time
11:00 a.m. Eastern Time     DIAL-IN:   (877) 407-0792 (U.S. and Canada)
(201) 689-8263 (International)     CONFERENCE ID:   13759369     WEBCAST:   https://viavid.webcasts.com/starthere.jsp?ei=1756570&tp_key=f18bbb31dc       For those unable to participate during the live broadcast, a replay of the call will also be available beginning that same day at 2:00 p.m. Eastern Time until 11:59 p.m. Eastern Time on May 7, 2026, by dialing (844) 512-2921 (U.S. and Canada) or (412) 317-6671 (International) and entering the conference ID: 13759369. The webcast will remain posted on the Investors section of Reliance’s website at reliance.com for 90 days.

About Reliance, Inc.
Founded in 1939, Reliance, Inc. (NYSE: RS) is a leading global diversified metal solutions provider and the largest metals service center company in North America. Through a network of approximately 310 locations in 41 states and 10 countries outside of the United States, Reliance provides value-added metals processing services and distributes a full-line of over 100,000 metal products to more than 125,000 customers in a broad range of industries. Reliance focuses on small orders with quick turnaround and value-added processing services. In 2025, Reliance’s average order size was $3,120, approximately 49% of orders included value-added processing, and approximately 40% of orders were delivered within 24 hours. Reliance’s press releases and additional information are available on the Company’s website at reliance.com.

CONTACT:
(213) 576-2428
[email protected]

or Addo Investor Relations
(310) 829-5400

Net sales of $4 billion, with record tons sold up 9.4% sequentially, exceeding expectations EPS of $5.10; non-GAAP EPS of $5.16, up 37% year-over-year also exceeding expectationsPretax income of $349.5 million, up 33% year-over-yearRepurchased $234.2 million of common stock PHOENIX, April 22, 2026 (GLOBE NEWSWIRE) -- Reliance, Inc. (NYSE: RS) (‘Reliance,’ the ‘Company,’ ‘we,' ‘our,' or ‘us’) today reported its financial results for the first quarter ended March 31, 2026.

(in millions, except tons sold in thousands, per ton and per share amounts)
                         Sequential Quarter     Year-Over-Year  Q1 2026
  Q4 2025
  % Change  Q1 2025
  % Change Income Statement Data:            Net sales$4,026.0  $3,498.6  15.1%  $3,484.7  15.5% Gross profit1$1,171.9  $954.7  22.8%  $1,033.3  13.4% Gross profit margin1 29.1%   27.3%  1.8%   29.7%  (0.6%)Non-GAAP gross profit margin1,2 29.1%   27.4%  1.7%   29.7%  (0.6%)Non-GAAP gross profit margin – FIFO1,2 30.1%   28.5%  1.6%   30.4%  (0.3%)LIFO expense$37.5  $38.7    $25.0   LIFO expense as a % of net sales 0.9%   1.1%  (0.2%)  0.7%  0.2% LIFO expense per diluted share, net of tax$0.54  $0.56    $0.35   Non-GAAP pretax expense adjustments2$4.3  $12.1    $2.3   Pretax income$349.5  $154.8  125.8%  $262.4  33.2% Non-GAAP pretax income2$353.8  $166.9  112.0%  $264.7  33.7% Non-GAAP pretax income – FIFO2$391.3  $205.6  90.3%  $289.7  35.1% Pretax income margin 8.7%   4.4%  4.3%   7.5%  1.2% Non-GAAP pretax income margin2 8.8%   4.8%  4.0%   7.6%  1.2% Non-GAAP pretax income margin – FIFO2 9.7%   5.9%  3.8%   8.3%  1.4% Net income – Reliance$264.9  $116.5  127.4%  $199.7  32.6% Diluted EPS$5.10  $2.22  129.7%  $3.74  36.4% Non-GAAP diluted EPS2$5.16  $2.40  115.0%  $3.77  36.9% Non-GAAP diluted EPS – FIFO2$5.70  $2.96  92.6%  $4.12  38.3%              Balance Sheet and Cash Flow Data:            Cash provided by operations$151.4  $276.1  (45.2%) $64.5  134.7% Free cash flow2$87.2  $202.9  (57.0%) $(22.4)  Net debt-to-total capital2 16.9%   14.4%     14.4%   Net debt-to-EBITDA2 1.0x   0.9x     0.9x   Total debt-to-EBITDA2 1.2x   1.1x     1.1x                Capital Allocation Data:            Capital expenditures$64.2  $73.2    $86.9   Dividends$66.6  $63.5    $65.2   Share repurchases$234.2  $200.1    $253.2                Key Business Metrics:            Tons sold 1,672.7   1,528.7  9.4%   1,628.9  2.7% Average selling price per ton sold$2,414  $2,292  5.3%  $2,143  12.6%              Please refer to the footnotes at the end of this press release for additional information.     
Management Commentary
“Reliance is off to a strong start to 2026, capitalizing on favorable market fundamentals with first quarter volumes, pricing and earnings exceeding our expectations. Strong pricing and demand momentum continued to build throughout the quarter across our diversified product and end market portfolio,” said Karla Lewis, President and Chief Executive Officer of Reliance. “Our teams executed exceptionally well, converting increased shipments and higher prices into outsized earnings contributions, driving year-over-year growth of 37% in non-GAAP earnings per share of $5.16 on a 15% increase in sales. These results demonstrate the strength of our opportunistic and flexible operating model and continued execution of our smart, profitable growth strategy.”

“As previously announced, we also secured two significant government contracts in the first quarter to supply the border wall and Joint Strike Fighter projects through our AMI Metals, Inc. (“AMI”) subsidiary, further reinforcing Reliance’s role as a trusted partner on critical U.S. infrastructure and defense programs. These wins illustrate our ability to support large and complex projects by leveraging the scale, logistics capabilities, processing expertise, deep supply‑chain relationships and existing operating infrastructure of the Reliance Family of Companies. Our diversified platform allows us to concurrently meet the needs of large program partners as well as small-order, quick-turn customers.”

Mrs. Lewis concluded, “Our strong balance sheet and liquidity position remain key competitive advantages, affording us the flexibility to continue to concurrently invest in our business, pursue strategic acquisitions, and return capital to our stockholders while maintaining our disciplined approach to capital deployment. We are encouraged by rising customer optimism and activity across our broad end market exposure, with continued strong and growing momentum in the infrastructure, data center, energy, and defense sectors. Extending lead times at our mill suppliers also bode well for a continued strong pricing environment, where access to metal becomes a strategic advantage. Reliance’s unique scale, diverse portfolio, financial strength, domestic mill relationships and expanding services to support our customers, along with our focus on execution, position us exceptionally well to further capitalize on the opportunities ahead in 2026.”

First Quarter 2026 Financial Highlights
Earnings per share were $5.10; non‑GAAP earnings per diluted share were $5.16, above management’s guidance of $4.50 to $4.70 and up 37% year-over-year. Results included approximately $0.54 per share of LIFO expense compared to management’s expectation of $0.36 per share, representing an incremental $0.18 impact, primarily due to higher-than-anticipated carbon steel and aluminum product cost increases.

Record quarterly tons sold increased 2.7% year-over-year and 9.4% sequentially, exceeding management’s expectation for a 5% to 7% increase. Reliance’s first quarter year-over-year growth in tons sold outperformed the industry-wide decrease of 5.1% reported by the Metals Service Center Institute (“MSCI”) by nearly 8 percentage points. Reliance has now outperformed the MSCI’s quarterly year-over-year shipment results for 13 consecutive quarters.

Average selling price per ton sold increased 5.3% sequentially, also surpassing management’s expectation of a 3% to 5% increase, supported by higher carbon steel, aluminum and stainless steel pricing.

Gross profit margin of 29.1% increased 180 basis points sequentially and decreased 60 basis points from 29.7% in the prior-year quarter. Non‑GAAP FIFO gross profit margin, which excludes LIFO adjustments and represents management’s ongoing assessment of operating performance, increased sequentially to 30.1% from 28.5% in the fourth quarter of 2025 and was slightly lower than 30.4% in the prior-year quarter, which benefited from rapid and significant price increases consequent to new Section 232 tariffs. While gross profit margins for certain products such as aluminum have been impacted by elevated tariffs, Reliance is realizing higher gross profit per ton across the majority of its product categories.

Growth in shipments and gross profit dollars per ton, supported by continued market share gains, provided operating leverage and improved earnings conversion, driving pretax income of $349.5 million, an increase of 33% year-over-year.

End Market Commentary
Non-residential construction demand (including infrastructure), representing Reliance’s largest end market by tons, improved from the first quarter of 2025. The Company expects non-residential construction demand to remain healthy in the second quarter of 2026, supported by strong activity across data centers, energy infrastructure, and public infrastructure.

Demand across the broader manufacturing end market Reliance serves improved compared to the first quarter of 2025, primarily due to growth in the industrial machinery, shipbuilding, military, consumer products and construction machinery sectors. Reliance anticipates that demand for its products across the broader manufacturing sector will remain healthy in the second quarter of 2026.

Demand in aerospace improved compared to the first quarter of 2025. Reliance anticipates commercial aerospace demand to remain steady in the second quarter of 2026 with build-rate increases supporting improvement throughout the year. Demand in the defense and space related portions of Reliance’s aerospace business is expected to remain robust in the second quarter of 2026.

Demand for the toll processing services Reliance provides to the automotive market was stable compared to the first quarter of 2025. The Company expects demand for automotive toll processing to remain relatively steady at healthy levels in the second quarter of 2026. Reliance’s toll processing operations remain flexible and able to quickly adapt to the variable demands of the automotive market.

Demand for certain products Reliance sells into the semiconductor market improved compared to the first quarter of 2025. The Company anticipates stable to improving demand for its semiconductor products in the second quarter of 2026.

Balance Sheet, Cash Flow and Stockholder Returns
As of March 31, 2026, Reliance had $249.7 million of cash and cash equivalents and total debt of $1.7 billion, including $550 million outstanding under its $1.5 billion revolving credit facility. The Company generated $151.4 million of cash flow from operations in the first quarter of 2026, reflecting a typical seasonal working capital increase related to strong shipment volume and higher metals pricing.

The Company returned approximately $301 million to stockholders in the first quarter of 2026 through dividend payments of $67 million and $234 million of share repurchases, at an average price of approximately $299 per share. Reliance’s share repurchase activity reduced outstanding common shares by 3% year-over-year. Since 2021, Reliance has repurchased $3.4 billion of its common stock at an average price of approximately $234 per share, reducing outstanding common shares by 22%.

On February 17, 2026, Reliance increased its regular quarterly dividend by 4.2% to $1.25 per share of common stock (annualized rate of $5.00 per share), marking the 33rd dividend increase since the Company’s 1994 IPO. On April 17, 2026, the Board of Directors declared a quarterly cash dividend of $1.25 per share of common stock, payable on June 5, 2026 to stockholders of record as of May 22, 2026.

Recent Government Contract Awards
As previously announced in March 2026, Reliance’s wholly owned subsidiary, AMI was awarded two significant U.S. government infrastructure and defense contracts that further strengthen the Company’s position as a trusted partner on large‑scale, complex government infrastructure and defense projects.

AMI was awarded a multi-year contract by the U.S. Department of Homeland Security (“DHS”) with a total maximum estimated value of up to $2.24 billion to provide steel and steel logistics support services for the construction of the border wall along the Southwest U.S. border. Phase 1 of the project, during which Reliance estimates sales of approximately $1.4 billion, commenced in April 2026 and is expected to continue through mid-2027.AMI also won a five‑year indefinite delivery/indefinite quantity (IDIQ) contract to supply processed aluminum plate in support of the Joint Strike Fighter defense platforms, including the F‑35 Lightning II. The contract, which is effective from January 2027 through December 2028, renews AMI’s existing contract and provides for up to three one-year renewal periods. The agreement has a maximum estimated value of $654 million and includes an approximate 10% increase in average volumes from previous targets. These awards highlight Reliance’s scale, logistics capabilities, and processing expertise across both carbon steel and aluminum, and reinforce the Company’s long‑standing relationships with domestic mills and major defense customers.

Business Outlook
Reliance anticipates both demand and pricing in the second quarter of 2026 will remain generally consistent at healthy levels across the key products and end markets it serves, despite ongoing domestic and international trade policy uncertainty and the conflict in the Middle East which could pose supply availability and macroeconomic risks. With underlying assumptions for ongoing activity in the second quarter generally consistent with the prior quarter and factoring in activity under the DHS border wall contract, the Company expects tons sold to increase 1.0% to 3.0% compared to the first quarter of 2026 and to increase 4.5% to 6.5% compared to the second quarter of 2025. Additionally, Reliance expects its average selling price per ton sold to be up 1.5% to 3.5% compared to the first quarter of 2026 supported by announced mill price increases given healthy underlying demand for those products. Based on these assumptions, the Company anticipates non‑GAAP earnings per diluted share in the range of $5.15 to $5.35 for the second quarter of 2026, representing year‑over‑year growth of approximately 16% to 21% and inclusive of LIFO expense of $37.5 million, or $0.54 per diluted share.

Our second quarter 2026 guidance includes an estimated 3.0% contribution to tons sold, a 1.0% lower consolidated average selling price and approximately $0.15 to $0.20 of earnings per share related to shipments associated with the border wall contract. Although the average selling price and gross profit margins under the border wall contract are below company-wide averages, these shipments are expected to contribute at above average earnings levels through efficient execution within Reliance’s existing operating network, providing significant operating leverage and supporting improved profitability on incremental project volumes. Shipments under this contract began in April 2026 and we anticipate that volumes will increase as we move throughout the year. Many variables may impact the timing of shipments so we will provide impact and earnings contribution guidance from the border wall contract on a quarterly basis.

Conference Call Details
A conference call and simultaneous webcast to discuss Reliance’s first quarter 2026 financial results and business outlook will be held on Thursday, April 23, 2026 at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time. To listen to the live call by telephone, please dial (877) 407-0792 (U.S. and Canada) or (201) 689-8263 (International) approximately 10 minutes prior to the start time and use conference ID: 13759369. The call will also be broadcast live over the Internet hosted on the Investors section of the Company's website at investor.reliance.com.

For those unable to participate during the live broadcast, a replay of the call will also be available beginning that same day at 2:00 p.m. Eastern Time until 11:59 p.m. Eastern Time on May 7, 2026, by dialing (844) 512-2921 (U.S. and Canada) or (412) 317-6671 (International) and entering the conference ID: 13759369. The webcast will remain posted on the Investors section of Reliance’s website at reliance.com for 90 days.

About Reliance, Inc.
Founded in 1939, Reliance, Inc. (NYSE: RS) is a leading global diversified metal solutions provider and the largest metals service center company in North America. Through a network of approximately 310 locations in 41 states and 10 countries outside of the United States, Reliance provides value-added metals processing services and distributes a full-line of over 100,000 metal products to more than 125,000 customers in a broad range of industries. Reliance focuses on small orders with quick turnaround and value-added processing services. In 2025, Reliance’s average order size was $3,120, approximately 49% of orders included value-added processing, and approximately 40% of orders were delivered within 24 hours. Reliance’s press releases and additional information are available on the Company’s website at reliance.com.

Forward-Looking Statements
This press release contains certain statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, discussions of Reliance’s: industry and end markets; business strategies; acquisitions; expectations concerning the Company’s future growth and profitability; ability to generate industry leading returns for its stockholders; future demand and metals pricing; results of operations; margins; profitability; taxes; liquidity; cash flows; capital expenditures; expectations for macroeconomic conditions, including inflation and the possibility of an economic recession or slowdown; anticipated effects from regulatory changes, including taxation, tariffs and other trade barriers; litigation matters and capital resources. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “preliminary,” “range,” “intend” and “continue,” the negative of these terms, and similar expressions.

These forward-looking statements are based on management's estimates, projections and assumptions as of today’s date that may not prove to be accurate. Forward-looking statements involve known and unknown risks and uncertainties and are not guarantees of future performance. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements as a result of various important factors, including, but not limited to, actions taken by Reliance, as well as developments beyond its control, including, but not limited to: changes in domestic and worldwide political and economic conditions; changes in U.S. and foreign trade policies and programs, including tariffs and trade policies and programs specifically affecting metals product markets and pricing; slowing economic growth, inflation, rising unemployment or other macroeconomic factors that could materially impact Reliance, its customers and suppliers; metals pricing; demand for Reliance’s products and services; the possibility that the expected benefits of government contracts, acquisitions and capital expenditures may not materialize as expected; and the impacts of labor constraints and supply chain disruptions. Deteriorations in economic conditions, including as a result of tariffs or trade barriers, economic policies, inflation, economic recession, slowing growth, outbreaks of infectious disease, or geopolitical conflicts such as in Ukraine, Iran and the Middle East, could lead to a decline in demand for the Company’s products and services and negatively impact its business, and may also impact financial markets and corporate credit markets which could adversely impact the Company’s access to financing or the terms of any financing. The Company cannot at this time predict all of the impacts of domestic and foreign tariffs and trade policies, inflation, product price fluctuations, economic recession, outbreaks of infectious disease, or geopolitical conflicts and related economic effects, but these factors, individually or in any combination, could have a material adverse effect on the Company’s business, financial position, results of operations and cash flows.

The statements contained in this press release speak only as of the date hereof, and Reliance disclaims any and all obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason, except as may be required by law. Important risks and uncertainties about Reliance’s business can be found in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and in other documents Reliance files or furnishes with the United States Securities and Exchange Commission.

CONTACT:         
(213) 576-2428
[email protected]

or Addo Investor Relations
(310) 829-5400

(Tables to follow)

First Quarter 2026 Major Commodity Metrics
                        Tons Sold (tons in thousands; % change)  Average Selling Price per Ton Sold (% change) Q1 2026
  Q4 2025
  Sequential Quarter Change
  Q1 2025
  Year-Over-Year Change
  Sequential Quarter Change
  Year-Over-Year Change
 Carbon steel 1,383.9   1,252.9   10.5%   1,344.4   2.9%   4.5%   13.2% Aluminum 85.1   77.1   10.4%   84.1   1.2%   9.5%   23.1% Stainless steel 78.2   69.8   12.0%   76.0   2.9%   2.9%   4.1% Alloy 33.0   27.9   18.3%   31.5   4.8%   (1.8%)  8.8% Copper & brass 4.9   4.9   —   5.0   (2.0%)  8.1%   27.1%                              Sales ($'s in millions; % change)        Q1 2026
  Q4 2025
  Sequential Quarter Change
  Q1 2025
  Year-Over-Year Change
       Carbon steel$2,218.1  $1,922.3   15.4%  $1,904.2   16.5%       Aluminum$754.6  $624.5   20.8%  $605.6   24.6%       Stainless steel$539.0  $467.1   15.4%  $503.2   7.1%       Alloy$180.6  $155.5   16.1%  $158.4   14.0%       Copper & brass$101.9  $93.5   9.0%  $81.7   24.7%                              Sales by Product ($'s as a % of total sales)              Q1 2026
  Q4 2025
  Q1 2025
            Carbon steel structurals 12%   13%   12%              Carbon steel plate 11%   11%   12%              Carbon steel tubing 9%   9%   9%              Hot-rolled steel sheet & coil 9%   8%   8%              Carbon steel bar 5%   5%   5%              Galvanized steel sheet & coil 5%   5%   5%              Cold-rolled steel sheet & coil 2%   2%   2%              Carbon steel 53%   53%   53%                                    Heat-treated aluminum plate 6%   5%   5%              Aluminum bar & tube 5%   5%   5%              Common alloy aluminum sheet & coil 5%   5%   5%              Common alloy aluminum plate 1%   1%   1%              Heat-treated aluminum sheet & coil 1%   1%   1%              Aluminum 18%   17%   17%                                    Stainless steel bar & tube 6%   6%   7%              Stainless steel sheet & coil 5%   5%   5%              Stainless steel plate 2%   2%   2%              Stainless steel 13%   13%   14%                                    Alloy 4%   4%   4%                                    Copper & brass 3%   3%   2%                                    Miscellaneous* 5%   6%   6%              Toll processing & logistics 4%   4%   4%              Other 9%   10%   10%                                    Total 100%   100%   100%                                    * Includes titanium, fabricated parts, PVC pipe and scrap.          RELIANCE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except shares in thousands and per share amounts)
        Three Months Ended March 31,2026  2025 Net sales$4,026.0  $3,484.7         Costs and expenses:       Cost of sales (exclusive of depreciation and amortization shown below) 2,854.1   2,451.4 Warehouse, delivery, selling, general and administrative ("SG&A") 734.8   690.2 Depreciation and amortization 69.2   68.7   3,658.1   3,210.3         Operating income 367.9   274.4         Other (income) expense:       Interest expense 15.4   11.5 Other expense, net 3.0   0.5 Income before income taxes 349.5   262.4 Income tax provision 83.9   61.9 Net income 265.6   200.5 Less: net income – noncontrolling interests 0.7   0.8 Net income – Reliance$264.9  $199.7         Earnings per share:       Basic$5.13  $3.76 Diluted$5.10  $3.74         Weighted average shares outstanding:       Basic 51,633   53,075 Diluted 51,974   53,399         Cash dividends declared per common share$1.25  $1.20        RELIANCE, INC.UNAUDITED CONSOLIDATED BALANCE SHEETS(in millions, except shares in thousands and par value)  March 31,
  December 31,
  2026  2025*
 AssetsCurrent assets:     Cash and cash equivalents$249.7  $216.6 Accounts receivable, less allowance for credit losses of $22.8 and $22.1 1,953.5   1,539.9 Inventories 2,234.9   2,187.8 Prepaid expenses and other current assets 135.2   165.6 Income taxes receivable —   31.2 Total current assets 4,573.3   4,141.1 Property, plant and equipment, net 2,630.8   2,633.3 Operating lease right-of-use assets 331.5   315.2 Goodwill 2,175.4   2,169.9 Intangible assets, net 953.0   960.1 Cash surrender value of life insurance policies, net 41.9   48.0 Other long-term assets 103.4   105.7 Total assets$10,809.3  $10,373.3       Liabilities and EquityCurrent liabilities:     Accounts payable$552.1  $375.2 Accrued expenses 152.5   150.0 Accrued compensation and retirement benefits 171.5   198.1 Accrued insurance costs 56.4   56.4 Current maturities of long-term debt —   0.7 Current maturities of operating lease liabilities 69.2   67.7 Income taxes payable 41.1   — Total current liabilities 1,042.8   848.1 Long-term debt 1,693.5   1,420.2 Operating lease liabilities 266.3   250.9 Long-term retirement benefits 25.3   24.9 Other long-term liabilities 74.4   74.1 Deferred income taxes 574.9   575.6 Total liabilities 3,677.2   3,193.8 Commitments and contingencies     Equity:     Preferred stock, $0.001 par value: 5,000 shares authorized; none issued or outstanding —   — Common stock and additional paid-in capital, $0.001 par value and 200,000 shares authorized     Issued and outstanding shares—51,049 and 51,735 0.1   0.1 Retained earnings 7,218.5   7,257.6 Accumulated other comprehensive loss (95.7)  (87.6)Total Reliance stockholders’ equity 7,122.9   7,170.1 Noncontrolling interests 9.2   9.4 Total equity 7,132.1   7,179.5 Total liabilities and equity$10,809.3  $10,373.3       * Derived from audited financial statements.            RELIANCE, INC.UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS(in millions)      Three Months Ended March 31,2026  2025 Operating activities:     Net income$265.6  $200.5 Adjustments to reconcile net income to net cash provided by operating activities:     Depreciation and amortization 69.2   68.7 Stock-based compensation 13.3   12.2 Other 7.6   6.5 Changes in operating assets and liabilities:     Accounts receivable (416.2)  (332.1)Inventories (47.7)  (85.9)Prepaid expenses and other assets 83.1   80.8 Accounts payable and other liabilities 176.5   113.8 Net cash provided by operating activities 151.4   64.5       Investing activities:     Purchases of property, plant and equipment (64.2)  (86.9)Other (5.8)  (0.7)Net cash used in investing activities (70.0)  (87.6)      Financing activities:     Proceeds from long-term debt borrowings 925.0   788.0 Principal payments on long-term debt (652.7)  (458.0)Cash dividends and dividend equivalents (66.6)  (65.2)Share repurchases (234.2)  (253.2)Taxes paid on net-settled restricted stock units (14.7)  (11.5)Other (3.4)  (18.7)Net cash used in financing activities (46.6)  (18.6)Effect of exchange rate changes on cash and cash equivalents (1.7)  1.4 Increase (decrease) in cash and cash equivalents 33.1   (40.3)Cash and cash equivalents, beginning balance 216.6   318.1 Cash and cash equivalents, ending balance$249.7  $277.8       Supplemental cash flow information:     Interest paid$13.2  $10.0 Income taxes paid, net$12.5  $13.9                    RELIANCE, INC.NON-GAAP RECONCILIATION(in millions, except per share amounts)                   Net Income Diluted EPS March 31,
  December 31,
  March 31,
  March 31,
  December 31,
  March 31,
 Three Months Ended2026  2025  2025  2026  2025  2025 Net income – Reliance$264.9  $116.5  $199.7  $5.10  $2.22  $3.74 Impairment and restructuring charges 3.8   14.7   2.3   0.07   0.28   0.04 Non-recurring settlement charges (credits), net 0.5   (1.9)  —   0.01   (0.04)  — Gains related to sales of non-core assets —   (0.7)  —   —   (0.01)  — Income tax benefit related to above items (1.1)  (3.1)  (0.6)  (0.02)  (0.05)  (0.01)Non-GAAP net income – Reliance 268.1   125.5   201.4   5.16   2.40   3.77 LIFO expense, net of tax 28.1   29.0   18.8   0.54   0.56   0.35 Non-GAAP net income – Reliance – FIFO$296.2  $154.5  $220.2  $5.70  $2.96  $4.12                    March 31,
  December 31,
  March 31,
        Three Months Ended2026  2025  2025        Pretax income$349.5  $154.8  $262.4          Impairment and restructuring charges 3.8   14.7   2.3          Non-recurring settlement charges (credits), net 0.5   (1.9)  —          Gains related to sales of non-core assets —   (0.7)  —          Non-GAAP pretax expense adjustments 4.3   12.1   2.3          Non-GAAP pretax income 353.8   166.9   264.7          LIFO expense 37.5   38.7   25.0          Non-GAAP pretax income – FIFO$391.3  $205.6  $289.7                             March 31,
  December 31,
  March 31,
        Three Months Ended2026  2025  2025        Gross profit – LIFO$1,171.9  $954.7  $1,033.3          Restructuring charges 1.0   3.0   1.8          Non-GAAP gross profit 1,172.9   957.7   1,035.1          LIFO expense 37.5   38.7   25.0          Non-GAAP gross profit – FIFO$1,210.4  $996.4  $1,060.1                            Gross profit margin – LIFO 29.1%   27.3%   29.7%          Restructuring charges as a % of sales —   0.1%   —          Non-GAAP gross profit margin 29.1%   27.4%   29.7%          LIFO expense as a % of sales 0.9%   1.1%   0.7%          Non-GAAP gross profit margin – FIFO 30.1%   28.5%   30.4%                            Certain percentages may not calculate due to rounding.
                   March 31,
  December 31,
  March 31,
         2026  2025  2025        Total debt$1,700.0  $1,427.7  $1,481.1          Less: unamortized discounts and costs (6.5)  (6.8)  (8.1)         Carrying amount of debt 1,693.5   1,420.9   1,473.0          Less: cash and cash equivalents (249.7)  (216.6)  (277.8)         Net debt 1,443.8   1,204.3   1,195.2          Total Reliance stockholders' equity 7,122.9   7,170.1   7,101.8          Total capital$8,566.7  $8,374.4  $8,297.0                            Net debt-to-total capital 16.9%   14.4%   14.4%                             March 31,
  December 31,
  March 31,
          Twelve Months Ended2026  2025  2025          Net income$806.7  $741.6  $774.7          Depreciation and amortization 278.7   278.2   273.8          Impairment 9.9   9.9   11.7          Interest expense 59.6   55.7   42.1          Income taxes 249.6   227.6   231.4          EBITDA$1,404.5  $1,313.0  $1,333.7                            Net debt-to-EBITDA 1.0x   0.9x   0.9x          Total debt-to-EBITDA 1.2x   1.1x   1.1x                             March 31,
  December 31,
  March 31,
        Three Months Ended2026  2025  2025        Cash provided by operations$151.4  $276.1  $64.5          Less: capital expenditures (64.2)  (73.2)  (86.9)         Free cash flow$87.2  $202.9  $(22.4)         
Reliance presents certain non‑GAAP measures, including non‑GAAP gross profit, pretax income, net income and earnings per share, to provide meaningful period-to-period comparisons of its operating performance. These non‑GAAP measures reflect adjustments for certain items, including impairment and restructuring charges related to the closure or reorganization of certain locations, non‑recurring settlement charges and credits, and gains on the sale of non‑core property, plant and equipment, which can reduce the comparability of GAAP results across periods. Reliance uses first‑in, first‑out (“FIFO”) gross profit, margin, and other FIFO-based performance measures to assess its ongoing performance and provide a basis for comparison with competitors that do not use the last-in, last-out (“LIFO”) inventory accounting method. See footnote 1 for additional information regarding the Company’s gross profit and gross profit margin. In addition, Reliance presents net debt‑to‑EBITDA and total debt‑to‑EBITDA as measures of leverage used by management to monitor debt levels relative to operating performance, for which EBITDA is used as a proxy. Free cash flow is presented as a measure of cash generated by operations that may be used to repay scheduled debt maturities, fund additional growth initiatives, or be returned to stockholders.

Footnotes
1 Gross profit (calculated as net sales less cost of sales) and gross profit margin (calculated as gross profit divided by net sales) are non-GAAP financial measures as they exclude depreciation and amortization expense associated with the corresponding sales. About half of Reliance's orders are basic distribution with no processing services performed. For the remainder of its sales orders, Reliance performs “first-stage” processing, which is generally not labor intensive as it is simply cutting the metal to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, is not significant and is excluded from cost of sales. Therefore, Reliance’s cost of sales is substantially comprised of the cost of the material it sells. Reliance uses gross profit and gross profit margin, as shown, as measures of operating performance. Gross profit and gross profit margin are important operating and financial measures, as their fluctuations can have a significant impact on Reliance's earnings. Gross profit and gross profit margin, as presented, are not necessarily comparable with similarly titled measures for other companies.
2 See accompanying Non-GAAP Reconciliation.

Reliance (RS - Free Report) reported $4.03 billion in revenue for the quarter ended March 2026, representing a year-over-year increase of 15.5%. EPS of $5.16 for the same period compares to $3.77 a year ago.

The reported revenue represents a surprise of +4.97% over the Zacks Consensus Estimate of $3.84 billion. With the consensus EPS estimate being $4.63, the EPS surprise was +11.45%.

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

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

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

Average selling price per ton sold: $2,414.00 compared to the $2,386.05 average estimate based on three analysts.Shipments (Tons sold): 1.67 million compared to the 1.63 million average estimate based on three analysts.Tons Sold - Stainless steel: 78.2 thousand versus 76.88 thousand estimated by two analysts on average.Tons Sold - Aluminium: 85.1 thousand versus the two-analyst average estimate of 85.42 thousand.Tons Sold - Alloy: 33 thousand compared to the 30.97 thousand average estimate based on two analysts.Tons Sold - Carbon steel: 1.38 million compared to the 1.34 million average estimate based on two analysts.Net Sales- Carbon Steel: $2.22 billion compared to the $2.09 billion average estimate based on two analysts. The reported number represents a change of +16.5% year over year.Net Sales- Alloy: $180.6 million versus $162.37 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +14% change.Net Sales- Stainless Steel: $539 million versus $533.12 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +7.1% change.Net Sales- Aluminium: $754.6 million versus the two-analyst average estimate of $667.76 million. The reported number represents a year-over-year change of +24.6%.View all Key Company Metrics for Reliance here>>>

Shares of Reliance have returned +11.9% over the past month versus the Zacks S&P 500 composite's +8.6% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

Key Takeaways Reliance reported Q1 EPS of $5.16, beating estimates, with net sales rising 15.5% year over year.RS saw higher shipments and a 12.6% jump in average selling price per ton, boosting results.Reliance expects steady demand across construction, manufacturing, and aerospace into Q2. Reliance, Inc. (RS - Free Report) posted profits of $264.9 million or $5.10 per share for the first quarter of 2026, up from $199.7 million or $3.74 per share in the year-ago quarter.

Barring one-time items, the company recorded earnings of $5.16 per share. It outpaced the Zacks Consensus Estimate of $4.63.

The company reported net sales of $4,026 million, representing a year-over-year increase of approximately 15.5%. The top line also beat the Zacks Consensus Estimate of $3,835.3 million.

Reliance’s Segment UpdateReliance reported a 2.7% year-over-year increase in shipments (thousand tons sold) to 1,672.7. The figure surpassed our estimate of 1,633.8. The average selling price per ton rose 12.6% year over year to $2,414. It was above our estimate of $2,362.2.

Demand for non-residential construction, including infrastructure, Reliance’s largest end market by volume, strengthened compared with the first quarter of 2025. The company expects demand in this sector to remain healthy through the second quarter of 2026, supported by strong activity across data centers, energy infrastructure and public infrastructure.

Demand within the broader manufacturing market improved year over year, driven by growth across the military, industrial machinery, consumer products, construction machinery sectors and shipbuilding. Reliance expects the demand to remain healthy in the second quarter.

Aerospace demand was higher compared with the prior-year quarter. Reliance expects commercial aerospace demand to remain consistent in the second quarter due to build-rate increases, while defense and space-related activity is expected to remain strong.

Demand for automotive toll processing services remained flat year over year. Reliance expects steady performance through the second quarter. The company’s toll processing operations remain agile and responsive to the automotive market’s demand fluctuations.

In the semiconductor market, demand improved relative to the first quarter of 2025. Reliance expects stable to improving demand conditions in the second quarter.

RS’ Financial PositionAs of March 31, 2026, Reliance held $249.7 million in cash and cash equivalents, with total outstanding debt amounting to $1.7 billion. This includes $550 million borrowings under the company’s $1.5 billion revolving credit facility.

In the first quarter, Reliance generated $151.4 million in operating cash flow. It reflects the typical increase in seasonal working capital caused by strong shipment volume and higher metals pricing.

Reliance repurchased its common stock during the first quarter, bringing down the outstanding common shares by 3% year over year, at an average price of $299 per share, for a total of $234 million.

Reliance’s Outlook Reliance expects demand in the first quarter to remain healthy across its diverse end markets, though ongoing domestic and international trade policy uncertainty and Middle East conflict could pose supply availability and macroeconomic risks, influencing performance. The company projects tons sold to increase 1% to 3% from the prior quarter and 4.5% to 6.5% from the year-ago quarter.

The average selling price per ton is anticipated to be up 1.5-3.5% sequentially. Based on these assumptions, the company forecasts adjusted earnings per share in the range of $5.15 to $5.35 for the second quarter, which includes an estimated LIFO expense of $37.5 million, or 54 cents per share.

RS’ Price PerformanceReliance’s shares have gained 21.3% in the past year compared with the 57% growth of the industry.

Image Source: Zacks Investment Research

RS’ Zacks Rank & Key PicksRS currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Aura Minerals Inc. (AUGO - Free Report) , Air Products and Chemicals, Inc. (APD - Free Report) and Albemarle Corporation (ALB - Free Report) .

Aura Minerals is slated to report first-quarter 2026 results on May 6. The Zacks Consensus Estimate for earnings is pegged at $1.84 per share, indicating 397.3% year-over-year growth. AUGO sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Air Products is scheduled to report second-quarter fiscal 2026 results on April 30. The Zacks Consensus Estimate for APD’s second-quarter earnings per share is pegged at $3.05, indicating 13.38% year-over-year growth. APD carries a Zacks Rank #2 (Buy) at present.

Albemarle is slated to report first-quarter 2026 results on May 6. The consensus estimate for ALB’s earnings per share is pegged at $1.07. ALB presently carries a Zacks Rank #2.

Investors interested in stocks from the Mining - Miscellaneous sector have probably already heard of SSR Mining (SSRM) and Reliance (RS). But which of these two stocks presents investors with the better value opportunity right now?

It has been about a month since the last earnings report for Reliance (RS - Free Report) . Shares have added about 5.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Reliance due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Reliance, Inc. before we dive into how investors and analysts have reacted as of late.

Reliance’s Q1 Earnings and Sales Surpass Estimates on Higher PricesReliance posted profits of $264.9 million or $5.10 per share for the first quarter of 2026, up from $199.7 million or $3.74 per share in the year-ago quarter.

Barring one-time items, the company recorded earnings of $5.16 per share. It outpaced the Zacks Consensus Estimate of $4.63.

The company reported net sales of $4,026 million, representing a year-over-year increase of approximately 15.5%. The top line also beat the Zacks Consensus Estimate of $3,835.3 million.

Segment UpdateReliance reported a 2.7% year-over-year increase in shipments (thousand tons sold) to 1,672.7. The figure surpassed our estimate of 1,633.8. The average selling price per ton rose 12.6% year over year to $2,414. It was above our estimate of $2,362.2.

Demand for non-residential construction, including infrastructure, Reliance’s largest end market by volume, strengthened compared with the first quarter of 2025. The company expects demand in this sector to remain healthy through the second quarter of 2026, supported by strong activity across data centers, energy infrastructure and public infrastructure.

Demand within the broader manufacturing market improved year over year, driven by growth across the military, industrial machinery, consumer products, construction machinery sectors and shipbuilding. Reliance expects the demand to remain healthy in the second quarter.

Aerospace demand was higher compared with the prior-year quarter. Reliance expects commercial aerospace demand to remain consistent in the second quarter due to build-rate increases, while defense and space-related activity is expected to remain strong.

Demand for automotive toll processing services remained flat year over year. Reliance expects steady performance through the second quarter. The company’s toll processing operations remain agile and responsive to the automotive market’s demand fluctuations.

In the semiconductor market, demand improved relative to the first quarter of 2025. Reliance expects stable to improving demand conditions in the second quarter.

Financial PositionAs of March 31, 2026, Reliance held $249.7 million in cash and cash equivalents, with total outstanding debt amounting to $1.7 billion. This includes $550 million borrowings under the company’s $1.5 billion revolving credit facility.

In the first quarter, Reliance generated $151.4 million in operating cash flow. It reflects the typical increase in seasonal working capital caused by strong shipment volume and higher metals pricing.

Reliance repurchased its common stock during the first quarter, bringing down the outstanding common shares by 3% year over year, at an average price of $299 per share, for a total of $234 million.

OutlookReliance expects demand in the first quarter to remain healthy across its diverse end markets, though ongoing domestic and international trade policy uncertainty and Middle East conflict could pose supply availability and macroeconomic risks, influencing performance. The company projects tons sold to increase 1% to 3% from the prior quarter and 4.5% to 6.5% from the year-ago quarter.

The average selling price per ton is anticipated to be up 1.5-3.5% sequentially. Based on these assumptions, the company forecasts adjusted earnings per share in the range of $5.15 to $5.35 for the second quarter, which includes an estimated LIFO expense of $37.5 million, or 54 cents per share.

How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 7.35% due to these changes.

VGM ScoresAt this time, Reliance has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Reliance has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

June 04, 2026 16:05 ET  | Source: Reliance, Inc.

PHOENIX, June 04, 2026 (GLOBE NEWSWIRE) -- Reliance, Inc. (NYSE: RS) announced today that Karla Lewis, President and Chief Executive Officer, and Stephen Koch, Executive Vice President and Chief Operating Officer, will participate in the Wells Fargo 16th Annual Industrials & Materials Conference on Tuesday, June 9, 2026, in Chicago, Illinois. Reliance is scheduled to present on Tuesday, June 9th at 3:45 p.m. CT.

The presentation will be webcast live over the Internet, hosted on the Investors section of the Company's website at investor.reliance.com. In addition to the live webcast, a replay will be available on the Company’s website for 90 days following the event.

About Reliance, Inc.
Founded in 1939, Reliance, Inc. (NYSE: RS) is a leading global diversified metal solutions provider and the largest metals service center company in North America. Through a network of approximately 310 locations in 41 states and 10 countries outside of the United States, Reliance provides value-added metals processing services and distributes a full-line of over 100,000 metal products to more than 125,000 customers in a broad range of industries. Reliance focuses on small orders with quick turnaround and value-added processing services. In 2025, Reliance’s average order size was $3,120, approximately 49% of orders included value-added processing, and approximately 40% of orders were delivered within 24 hours. Reliance’s press releases and additional information are available on the Company’s website at reliance.com.

CONTACT:
(213) 576-2428
[email protected]
or Addo Investor Relations
(310) 829-5400

Reliance, Inc. (RS) Presents at 16th Annual Wells Fargo Industrials & Materials Conference Transcript

Investors are curious if this is a buying opportunity.

*Stock prices used were the afternoon prices of June 8, 2026. The video was published on June 10, 2026.

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Listen to the audio version of this article (generated by AI).

On a warm day in mid-July, some 80 scientists comprised of Nobel laureates and nuclear security experts gathered in a 10th-floor conference room at the University of Chicago. They were then asked to imagine their own deaths…

A presenter guided the group’s attention out of the window, past the gothic spires of campus, and traced which neighborhoods could vanish from differently sized nuclear blasts. The exercise, recently chronicled in Popular Mechanics, is part of the process behind one of the most recognizable symbols on Earth: the Doomsday Clock.

When artist Martyl Langsdorf drew it for the Bulletin of the Atomic Scientists’ first magazine cover in 1947, she set the hand at seven minutes to midnight for no scientific reason at all… the placement simply “suited my eye.” The hand has always been a judgment call.

This past January, the Bulletin’s board moved it to 85 seconds to midnight, the closest in its history, citing nuclear arsenals, climate, and the unchecked rise of unregulated artificial intelligence.

Wall Street, it turns out, keeps a clock of its own for AI. And every selloff like the one we just lived through is the crowd grabbing the hand and winding it backward… a collective verdict that the technology’s world-changing promise sits further out than feared, that the disruption is overstated, that midnight is receding.

The stakes of the two clocks differ by orders of magnitude, of course. The mechanism, though, is the same. On the latest episode of Being Exponential with Luke Lango, we read the machinery, and find it running faster than ever.

Watch the full episode here. Also, be sure to subscribe to Being Exponential on X (formerly Twitter) for more exclusive content:

What the Selloff Got Wrong Some blamed Broadcom Inc. (AVGO) for kicking it off. However, we are not buying that story. Broadcom delivered nearly 50% revenue growth, nearly 80% semiconductor revenue growth, more than 140% AI semiconductor revenue growth, and a $30 billion backlog… records across the board. As we say in the episode, there is no fundamental weakness in that report.

And the spending headlines keep stacking up. China is reportedly committing nearly $300 billion over five years to a national network of AI data centers. Nebius Group N.V. (NBIS) is investing 1.7 billion euros to build capacity in the U.K. Advanced Micro Devices Inc. (AMD) just announced plans to invest up to 2 billion pounds there over the same stretch. SK Telecom is planning a gigawatt-scale AI cloud in South Korea. OpenAI just raised $122 billion and filed for its IPO. SpaceX is set to raise roughly $75 billion in its own offering.

So what actually spooked the market? We look at three real risks: escalation with Iran sending oil above $110 to $120 and reigniting inflation, political shifts that shouldn’t matter until 2028, and the creeping sense that the market has gotten too euphoric. In the full episode, we walk through why each one, examined closely, looks far more manageable than the tape suggests.

The Toy Every Corporation Wants Then there’s the viral story that Uber (UBER) blew through its Anthropic token budget… held up in some corners as proof AI isn’t paying off. Our read flips that on its head: buy a kid a new toy, and of course he plays with it every waking hour until you set some limits. The limits don’t mean the toy was a mistake.

Companies are moving from token-maxing to token-budgeting – and a budget line item is precisely what institutionalization looks like. Read the conference calls, and company after company reports AI improving operations across software, hardware, and consumer businesses alike.

The $5 Trillion Floodgate The episode’s centerpiece is the wave of “kilicorn” IPOs – SpaceX near $1.75 trillion, OpenAI and Anthropic each tracking toward roughly $1.5 trillion. Call it $5 trillion in new market cap hitting public markets in a single year. Many investors read that as a top signal.

History reads it differently…

The giant IPOs of the dot-com era came in 1998 and 1999, and the smaller companies trickled through the gates afterward. The big bulls open the gates first. There’s also one development in particular that could supercharge one corner of this trade: reports that the White House is weighing direct stakes in frontier AI labs, which we interpret as an OpenAI story… and a bullish one for pre-IPO vehicles like SuRo Capital Corp. (SSSS).

Where does all that fresh IPO capital go? Straight back into compute… which means more networking, more memory, more chips, more cooling, more power.

The Jobs Report Mirage One last contrarian call. Last week’s strong jobs report – more than 170,000 added – revived claims that the AI labor apocalypse was overhyped. We walk through the Challenger, Gray & Christmas data telling a different story: nearly 100,000 job cuts in May, the largest May figure since 2020, with AI cited in roughly 40% of them. AI-driven cuts have already passed 88,000 this year – about 60% more than all of 2025, just five months in.

In the full episode, we lay out the specific accumulation zone we’re watching on the VanEck Semiconductor ETF (SMH), why we believe the Summer of AI resumes once the SpaceX IPO clears, and the one scenario that would actually change our minds.

Watch the latest episode of Being Exponential With Luke Lango here. And be sure to subscribe to Being Exponential on X (formerly Twitter) for more exclusive content.

HomeStock IdeasLong IdeasTech 

SummaryBroadcom is poised for an AI-driven inflection point in eFY27, underpinned by multi-year XPU agreements with major CSPs and AI developers.AI semiconductor and networking demand, alongside infrastructure software growth, supports durable operating margins despite near-term gross margin pressures.I reiterate a strong buy rating with a $665/share price target (26.82x eFY27 EV/aEBITDA), reflecting robust growth expectations and a recent share price pullback. Pali Rao/E+ via Getty Images

Broadcom (AVGO) is set to realize its AI semiconductor inflection point in eFY27 going forward as CSPs and AI developers leverage XPUs to build out AI training and inferencing capacity. With growing demand for

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

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

Broadcom’s NASDAQ: AVGO latest earnings report was a blow to highly bullish investors who bid up shares drastically going into the release. In the seven days leading up to Broadcom's report, shares gained more than 15%, pushing them to never-before-seen levels exceeding $475.

Broadcom Today

$382.07 -3.50 (-0.91%)

As of 04:00 PM Eastern

52-Week Range$244.17▼

$495.00Dividend Yield0.68%

P/E Ratio63.68

Price Target$490.13

In contrast, Broadcom shares are down about 20% since the report, having dropped as low as $375. This came despite Broadcom posting beats on sales and adjusted earnings per share (EPS) and providing total guidance that was better than expected.

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However, artificial intelligence (AI) semiconductor sales guidance for Q3 fiscal 2026 (FY2026) and fiscal year 2027 (FY2027) fell short of very high expectations. (Note that Broadcom’s fiscal reporting period is slightly ahead of the standard reporting period used by many companies.)

Nonetheless, investors may be able to take solace in the fact that Broadcom’s report did little to deter the bullish sentiment among Wall Street analysts. In fact, analysts overwhelmingly moved their targets to the upside—a clear sign of confidence despite investor disappointment.

Analyst Price Targets Rise in Wake of Post-Earnings PlummetThe MarketBeat consensus price target on Broadcom sits near $490, a figure that implies solid upside of more than 20%. However, analysts by and large raised their price targets after the report. Overall, MarketBeat tracked just one analyst who lowered their target in response: Timothy Arcuri of UBS Group, whose target fell by just $5 to $485. In contrast, more than 10 analysts increased their target.

Broadcom Stock Forecast Today12-Month Stock Price Forecast:
$490.13
28.59% Upside

Moderate Buy
Based on 33 Analyst Ratings

Current Price$381.16High Forecast$582.00Average Forecast$490.13Low Forecast$375.00Broadcom Stock Forecast Details

Among all targets updated after Broadcom’s report, the average was around $515—considerably more optimistic than the consensus forecast. This updated average implies upside in the range of 30% and signals an expectation that shares could move well beyond past all-time highs.

Updated price targets on Broadcom do have a somewhat wide range; the lowest updated targets come from both DA Davidson and Royal Bank of Canada at $400. Despite this, both firms increased their targets, doing so by 6.7% and 11.1%, respectively. Meanwhile, Harlan Sur at JPMorgan Chase & Co. increased his target by 16%, moving the figure up to $580, the most bullish among post-earnings updates.

When it comes to ratings, analysts are also overwhelmingly showing confidence in Broadcom. The stock now retains zero Sell ratings, three Hold ratings, and a whopping 30 Buy ratings.

JPMorgan’s Question Hits Shares While Its Price Target SoarsNotably, Harlan Sur asked a key question on Broadcom’s earnings call, seeking to get the semiconductor company to raise its FY2027 AI outlook. Interestingly, though the answer contributed to Broadcom’s sell-off, Sur himself drastically increased his price target.

After two quarters in FY2026, Broadcom generated $19 billion in AI revenue and is guiding for $56 billion for the full year. This implies $37 billion over the two final quarters of FY2026. For FY2027, Broadcom is guiding for full-year AI semiconductor revenue of over $100 billion. Together, this brings the company’s 18-month AI revenue guidance to $137 billion—with the $37 billion portion in the second half of FY2026 firmly solidified.

The goal of Sur’s question was to get Broadcom to raise the FY2027 portion. Sur said, “Just given the strength of all your programs… is it fair to assume that your 18-month AI backlog second half of this year to first half through all of fiscal '27 sits at $200 billion or better?”

Here, Sur is asking Broadcom if its 18-month AI revenue backlog actually sits at $200 billion or higher. If Broadcom said yes, it would be implicitly adding $63 billion in backlog to its 18-month $137 billion guidance ($137 billion + $63 billion = $200 billion). Given that the $37 billion figure for the rest of FY2026 is firmly in place, the $63 billion addition would have to be allocated to FY2027.

Ultimately, Hock Tan did not agree to Sur’s framing, holding the company’s FY2027 AI outlook at over $100 billion. Still, Tan did note that Broadcom “will exceed very easily $100 billion in 2027." Overall, Sur’s attempt to get Broadcom to concretely raise its FY2027 outlook failed—contributing to investor disappointment and the stock’s big drop.

Sur and Other Analysts Walk Away Feeling More Confident in BroadcomThe answer to Sur’s question was a key reason why Broadcom shares sold off, as investors wanted the company to increase its AI guidance. While this clearly disappointed the market, Sur’s own reaction to Broadcom’s report showed anything but disappointment. Sur issued a huge price target increase and now has one of the highest targets of any analyst covering the stock.

That is something worth taking notice of—the analyst scrutinizing this name closely walked away with a much greater level of confidence. Furthermore, general price target moves clearly showed that Wall Street analysts became more bullish after the report. Overall, these factors point to a continuation of Broadcom’s positive outlook, despite post-earnings volatility.

Should You Invest $1,000 in Broadcom Right Now?Before you consider Broadcom, 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 Broadcom wasn't on the list.

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Wall Street’s verdict on Broadcom (NASDAQ:AVGO | AVGO Price Prediction) is unambiguously bullish, with the analyst consensus price target now sitting above the stock’s own 52-week high after a brutal post-earnings selloff. The smart money signal is clear: sell-side desks have leaned harder into the name precisely as retail capitulated, and institutional positioning hasn’t blinked.

Broadcom stock currently trades near $376, after a sharp post-earnings drawdown from $495 at the time of its Q2 FY2026 earnings filing. The pullback came despite a record quarter and a guidance bar that implies 84% year-over-year revenue growth for Q3 FY2026.

That dislocation is the headline story. Analysts haven’t followed retail out the door, and the consensus number now looks like a monster target rather than a modest one.

The Analyst Signal Is Loud The Wall Street consensus price target on Broadcom stock stands at $522.06, a level that sits above the stock’s 52-week high of $495. The coverage book is heavily skewed bullish: 7 Strong Buy, 37 Buy, 4 Hold, zero Sell, and zero Strong Sell ratings, or roughly 92% bullish.

Institutional positioning corroborates that conviction. 80% of Broadcom’s float sits in institutional hands, and there’s no visible exit by the funds that actually move the tape. Mizuho’s recent ASIC channel-check note flagged a large TPU shipment ramp and a sizable revenue opportunity tied to the Google relationship and the Apollo and Blackstone AI partnership, an example of the bullish framework on the sell side.

Crowd sentiment tells the opposite story. Reddit chatter on AVGO stock has been neutral with low activity, and a Polymarket contract on Broadcom becoming the second-largest company by market cap on June 30 sits at just less than 1% implied probability. In other words, the professional bid and the retail bid have decoupled.

The Gap Between Wall Street and the Tape The arithmetic gap between the $522.06 consensus and Broadcom’s current handle widened sharply this month after AVGO stock fell 12% over the past month, even as fiscal year results came in ahead of estimates on every line. Broadcom’s Q2 FY2026 non-GAAP EPS landed at $2.44, AI semiconductor revenue hit $10.8 billion, and management guided Q3 AI revenue to $16 billion, up over 200% year over year.

The bear case is real and worth weighing, though. Broadcom trades at a P/E ratio of 66x trailing and a forward earnings multiple of 34x, gross margin is set to compress to 74% in Q3 as TPU mix scales, and the customer base is concentrated among a handful of hyperscalers. Broadcom CFO Kirsten Spears acknowledged on the call that “as the TPUs continue to accelerate, there will be pressure overall on gross margin.”

The bull case rests on visibility. Broadcom CEO Hock Tan reiterated guidance for fiscal 2027 AI semiconductor revenue in excess of $100 billion, with Q2 AI bookings of over $30 billion against $10.8 billion shipped. That kind of book-to-bill is what the consensus target is leaning on.

Is the Smart Money Right? The honest read is that Wall Street’s $522 price target for Broadcom stock is probably still too cheap. Broadcom’s record AI revenue, 200%-plus guided growth, and a $30 billion bookings number are hard to dismiss. The risks (valuation, margin mix, customer concentration) shouldn’t be overlooked, however.

Investors weighing AVGO stock today have a clean setup to evaluate against their own time horizon and risk tolerance. Moderate position sizing and a willingness to add on further weakness is the framework most consistent with what the consensus target, the institutional book, and Broadcom’s own guidance are saying together.

Semiconductor stocks were routed last Friday, June 5, with the sector losing a whopping $1.4 trillion in market cap in a single day. The PHLX Semiconductor Sector index shed more than 10% of its value in a single session, driven by a stronger-than-expected jobs report that has led to an increase in the odds of the Federal Reserve raising interest rates this year.

Not surprisingly, major semiconductor names took a big beating. Nvidia (NVDA +0.15%) was down by more than 6%, while foundry giant Taiwan Semiconductor Manufacturing (TSM +0.46%) slipped nearly 7%. Even Broadcom (AVGO 0.85%), which released a strong set of results on June 3, wasn't immune from the sell-off, falling nearly 8% on Friday.

It won't be surprising to see semiconductor stocks recovering from this pullback. The sector has played a key role in driving the stock market rally in recent weeks, and investors may have decided to book profits after pricing in the potential impact of a strong jobs report on the Fed's policy. However, investors will do well to note that the semiconductor sector's rally has been powered by strong revenue and earnings growth, driven primarily by artificial intelligence (AI)-fueled demand.

So, if you have $1,500 in investible cash right now (after paying your bills, clearing any high-interest loans, and saving for tough times), it may be a good idea to capitalize on the semiconductor sector's recent pullback by putting that money into the names discussed in this article, either individually or combined.

Let's take a closer look at some of the top chip stocks you can consider buying right away.

Image source: Nvidia.

Nvidia and Broadcom are no-brainer buys given their terrific potential Nvidia and Broadcom dominate the AI chip market in their respective niches. Nvidia sells graphics processing unit (GPU)-based chip systems, and Broadcom designs custom AI processors and networking components. Both kinds of chips are in solid demand due to their distinct advantages. While GPU-based systems are considered ideal for AI training, Broadcom's custom processors are being used for inference-focused tasks in AI data centers.

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Not surprisingly, both companies have been benefiting big time from the massive investments in AI data centers. Nvidia's revenue growth in Q1 of fiscal 2027 (for the three months ended April 26) accelerated to 85% year over year from 69% in the same quarter last year. Its top line landed at $81.6 billion last quarter, and the $91 billion estimate for the current quarter points toward a 95% year-over-year increase.

Nvidia's expansion beyond GPUs into the server processor market and its focus on emerging niches, such as physical AI and robotaxis, explain why the company's growth trajectory is improving despite the rising competition in AI chips. As a result, analysts have become bullish about Nvidia's earnings growth prospects.

Data by YCharts

The stock trades at just 31 times earnings, even though it is estimated to clock earnings growth of 88% this fiscal year. If Nvidia were to trade in line with the tech-focused Nasdaq Composite index's earnings multiple of 40 by the end of fiscal 2027 (which ends in January 2027), its stock could reach $358 (based on the fiscal 2027 earnings per share estimate of $8.96), a potential upside of 72%.

Similarly, Broadcom's growth rate is also picking up. The company is benefiting from lucrative contracts it has signed with multiple hyperscalers and AI companies. This explains why Broadcom's revenue in the second quarter of fiscal 2026 (which ended on May 3) increased by 48% year over year to $22.2 billion, better than the 20% growth it reported in the same period last year.

Broadcom's AI revenue rose by 143% year over year to $10.8 billion. What's more, it expects AI revenue to jump by more than 200% to $16 billion in the current quarter. Importantly, the company's AI revenue growth will continue to improve as it starts ramping up the sales of its AI chips to customers like Anthropic, Meta Platforms, OpenAI, and Google.

As a result, Broadcom sees its AI revenue landing at more than $100 billion in fiscal 2027, which would be a significant improvement over what it has been clocking so far this year. Analysts anticipate a 70% increase in Broadcom's earnings this year, followed by a 66% spike in fiscal 2027 to $19.32 per share. This makes Broadcom a solid buy at 34 times forward earnings.

Assuming its earnings per share indeed reach $19.32 in fiscal 2027, and it trades at 40 times earnings (in line with the Nasdaq Composite), the stock could jump to $772. That's nearly double where Broadcom stock is right now.

This AI kingpin can deliver outstanding gains TSMC is the world's largest semiconductor foundry. It manufactures chips designed by fabless chipmakers, such as Nvidia, Broadcom, AMD, Qualcomm, and others. What's worth noting is that TSMC's share of the global foundry market increased by five percentage points year over year in Q1 2026, rising to 73%, according to Counterpoint Research.

There's a massive gap between TSMC and second-placed Samsung in the foundry market, with Samsung holding just 7% share. As TSMC makes AI chips for multiple chip designers serving different industries, including smartphones, personal computers (PCs), and data centers, it is easy to see why it has been clocking impressive growth since the beginning of 2024.

Data by YCharts

The company's earnings per share stood at $10.65 in 2025. The following chart suggests that TSMC's earnings growth will remain robust over the next three years, with its bottom line poised to more than double during this period (from 2025 levels).

Data by YCharts

TSMC stock trades at 27 times forward earnings. This sets it up for solid upside over the next three years, as it has the potential to more than double if its earnings multiple aligns with the Nasdaq Composite by the end of 2028. So, this is another top AI stock you can consider buying after its recent slip, since it could go on a bull run given its bright prospects.

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Lou Whiteman discuss:

Broadcom’s good earnings.Playing the expectations game in a volatile market.Stocks doing well in downtrodden industries.Listener questions: How will the SpaceX, Anthropic, and OpenAI IPOs impact cash on the sidelines and ETFs?To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on June 4, 2026.

Tyler Crowe: We've got Broadcom stock whiplash today on Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today I'm joined by longtime Fool contributors Lou Whiteman and Matt Frankel. Today, we were going to mix it up a little bit. We thought we're going to do a bunch of different segments and do some basically non-earnings takes because it's June. We don't normally get a lot of surprise earnings stuff, but then Broadcom had to go and give its earnings, and now its stock’s down, I think, almost 15% as we are taping today, as we're going to get into. I'll let you guys really digest the numbers here. But by all objective metrics, all the numbers looked good. The guidance looked fine. Is this really just expectations game, Lou?

Lou Whiteman: I think it is. Expectations are everything. It's glass half full of glass empty. Stock is up 15%, just heading into earnings. When you get that sort of expectations, any slight hiccup, any slight sneeze can set you back. This was a slight miss on revenue, but look, it's brutal when people are expecting enough. Apparently, it was enough to outweigh 140% gains in AI semiconductor sales, which I don't know, Tyler, sounds pretty OK to me.

Tyler Crowe: Matt, you were the task a little bit more with the nitty-gritty of the numbers here. What did you see in this that was like, maybe not great. I don't know. It's hard to look at these and say, Yeah, we should definitely be dropping the stock by 15% because that's just what we do these days.

Matt Frankel: It's not only Broadcom. CrowdStrike also reported. We're getting all the reports from companies that use weird fiscal years, and some of them haven't been too impressive. But there was a lot to like here, 48% revenue growth, they beat on the bottom line. As Lou said, 140% roughly growth in AI semiconductor revenue. Guidance was strong, but if you look into the guidance, the AI revenue that they're guiding for is not quite what the market expected, so that could be driving a little bit of the sell-off. Any slowdown in AI or perceived slowdown is enough to scare investors, and it's not just that it was running up 15% heading into earnings, Broadcom was up 90% over the past year. In a nutshell, this stock went into the report priced for a blowout quarter and blowout guidance. It was a good quarter. I wouldn't call this a blowout quarter, especially on the AI side of the business, not a blowout.

Tyler Crowe: We certainly did see a lot of blowouts this most recent quarter looking at a lot of these suppliers. Taiwan Semi, basically everyone was like, everything is awesome. With Broadcom's numbers looking pretty good. It was almost like comparing to everyone else. Is like, Well, they were that good. Can you do as well? This touches on a couple of top themes and topics we've discussed so far during this week. When the three of us were on the show on Tuesday, we were talking about how much does narrative play into your thesis? Narrative is also valuation-based. We were talking about this with Dollar General because, as a value play as a stock, you are betting on a return to median, return to average valuation.

Right now, we're all the narrative is defying expectations to justify very high valuations. At the same time, too, it touches on this idea of the start-stop whack-a-mole discussion about the AI build-out that, Lou, you, I, and Travis were talking about yesterday, where it seems like every couple of months here, we're talking about the next bottleneck. At first, it was is going to be chits. Then it became memory chips. Now we're talking about, the old companies like Dell that are just building off products, and we can name like 15 other suppliers where somewhere there's a stop-start going on here where somebody's doing awesome, but then, just because they didn't blow out earnings, they're going to have a 15% stock drop.

Lou Whiteman: Two points here, one macro, one micro, I guess. First of all, the macro, the narrative. I think you are so right and I think investors better be watching the narrative right now because there is a real indication that nothing is good enough. I look at what happened with Nvidia’s quarter. Look what the stock did there. Expectations are so out of this world right now that I don't know if any company, almost, can satisfy the market long term. For strong companies that can outlast the cycle, that's just an annoyance. But if you are in some of the, I guess, more speculative AI companies, I think this should be a warning sign to you that nothing is good enough, so look out below.

Specific to Broadcom, look, there are massive expectations still up ahead. CEO Hock Tan is forecasting $100 billion in annual AI chip revenue in fiscal ‘27. They're on pace to do about half of that this year, Tyler, and it took triple-digit gains to get to that 50 billion that they hope to do this year. I see that the stop-start nature of this, the questions about potential fragility, and it scares me. You add in the fact that OpenAI and Anthropic are going to account for a lot of that growth. Those are two very different companies right now. Even if OpenAI gets their act together and does well, you are putting a lot of eggs in just a couple of baskets with that customer concentration. I'm not predicting gloom. Broadcom is a good company, but right now, it's just hard to look at this and say, yes, everything's fine, everything goes up from here.

One other thing, software revenue, which is supposed to be recurring, to balance this out. That only grew by 9%. All of this growth is going to have to come based on their ability to keep selling hardware at really amazing levels. We'll see how long that lasts.

Matt Frankel: To Lou’s point, the expectations are huge here. You mentioned they're predicting about $100 billion of AI revenue in 2027. For about $40 billion of that, a little more is expected to come from Anthropic alone. OpenAI is a big client. The anthropic and OpenAI IPOs are really worth paying attention to. Anthropic just raised $65 billion. We've talked about this with other companies. I think Oracle was one of them where these commitments they're going to need to pay. They raised $65 billion. OpenAI raised $120 billion recently. That's not going to be enough for all of their commitments. These IPOs really need to go well, they need to get strong valuations. OpenAI and anthropic IPOs are probably the single most important near-term story for Broadcom investors to watch. The 2027 and 2028 growth story for the company, which the IPOs are going to directly support. It's largely intact for now, but that could change if demand cools off.

Tyler Crowe: We'll be getting into that in a later segment, but the amount of money that needs to be raised this year to make those commitments to Broadcom and all their other suppliers is looking pretty hefty and could have some pretty profound impacts on the market in general, beyond just those individual companies. But we're going to hit that after the break. But before that, we're going to actually take a pause from the AI discussion and just kind of look at some other sectors and some stocks that are really changing up the narrative of the sector that they're in. We'll hit that after the break.

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Tyler Crowe: I was reading an investing newsletter a couple of days ago, and there was a quote from the chief economist at Apollo talking about diversification and the importance of it. This was an interesting quote to me. It was factor investing tells investors not to be overexposed to just one factor. What he said was, the new 60/40 is now the AI versus non-AI thing. For those who aren't familiar, 60/40 was the benchmark gold standard for individual investors, people, probably not picking individual stocks. 60% of your money in stocks, 40% of your money in bonds, maybe you start changing that as you get older, but it was the standard benchmark that most wealth advisors told you to do to get diversification in the market.

As this quote is saying, it's not just the factor of bonds versus stocks, but it's also how much diversification do you have away from AI? In the spirit of that, we wanted to dedicate a whole segment to basically sectors and parts of the market that just aren't AI. Specifically, we've had a pretty bifurcated market so far. We've had some industries doing extremely well and others have been taking a bit on the chin. I think insurance, healthcare, biotech has done surprisingly not well. Well, energy, semiconductors, technologies absolutely fly. In that vein, what we played a little game with these guys. I each wanted you guys to pick one stock from an industry and find a stock that you find that is bucking the sector trend. Is there a company that's doing lousy in these awesome sectors or a company that's doing gangbusters in a downtrodden sector? I want to start with you, Matt. What's the sector in the stock that you're like, This is interesting.

Matt Frankel: Well, it's been a long time since I've gotten to talk about real estate because all we talk about is AI and SpaceX lately. I'm going to bring up.

Tyler Crowe: That's the whole point of this segment.

Matt Frankel: I'm going to bring up a real estate stock. Over the past three months, the S&P 500 as a whole has gained about 11%, mostly because of the mega‑cap tech stocks. Meanwhile, the real estate sector has been almost exactly flat. It was up 0.02% as I was looking this morning. There are some good reasons for it to be fair, specifically the fact that inflation is at its highest level in three years. There are legitimate concerns about the Fed raising rates. Real estate is a very rate-sensitive sector as a whole.

One that has really bucked the trend is Ryman Hospitality Properties. Ticker is RHP. It's up 18% in the past three months, even beating the S&P, not just the real estate sector. Hotel real estate is generally less rate-sensitive than other real estate subsectors. Unlike things like warehouses and retail properties which rely on long-term leases have predictable cash flow, hotels rent their space by the night and share prices; therefore are more governed by the business performance, which can really ebb and flow over time. Ryman's business has been impressive. In the first quarter, revenue and net income were at all-time highs for that time of year. The company raised its full-year guidance. Average daily rates for the hotel rooms and out-of-room spending were both up by double digits year over year. Their entertainment division is performing really well, especially that Old Red dining and entertainment brand just announced its seventh location. Its flagship Vegas location is dramatically outperforming expectations. Adjusted FFO, funds from operations, which is the real estate version of earnings, grew by 19% year over year. That's a rapid pace for real estate.

Tyler Crowe: Permit me a little bit of a follow up question here. When I think hospitality, too, though, I do think sensitivity to macroeconomic factors. When you look at Ryman, because it is a hospitality REIT, is this a specific REIT that has some call it macroeconomic macro vibes resiliency in it with its business model, or is it a little bit of ride the wave until it's no longer working?

Matt Frankel: That's a really good question because they're a group-focused hotel. The reason that that's important is that they focus on conferences, conventions, things like that, and these tend to book three,, four years in advance. They have a lot of future revenue visibility as opposed to an operator of a Hilton or a non-group focused hotel. They have some resilience, and you got to think of what they're being compared to in year over year. International travel was way down a year ago. That's coming back a little bit. Group events are a very resilient part of the hotel market. You bring up a really good point. I wouldn't really want to invest in a leisure hotel operator with macro uncertainty, but one that has that group-focused business, which is more than half of Ryman's business, it does have a little more visibility.

Tyler Crowe: Lou, I think we're not going to do anything real estate related to what you're looking at here.

Lou Whiteman: No, I will say, though, I'd rather own Ryman than stay at the Grand Old Opery. There's that for it. Look, I'm looking at the transports. I'm going to apply my gratists too, but it's been a pretty crummy few years for the transports. There were a lot of factors driving that. We were coming down from the sugar high of the pandemic where everything was shipped. ASAP. We've had the added uncertainty of tariffs, trade wars, and macro concerns, slowing economy. Big customers tend not to stock up on inventories if they're worried, the economy is slowing. It all has added up to underperformance, really crummy numbers. Nasdaq Transportation index has underperformed the market by 25 percentage points over the last three years.

In that environment, XPO, a trucking company, is up 340%. Easily beating both the transports and the broader market. Now some of that is good fortune. A big competitor, yellow, liquidated, XPO picked up a lot or a good bit of that business at literally prices that made it EB a positive just from Day 1. But it's also management deserves a lot of credit here. This is a story of simplification. Split out a couple of other units to just focus on one thing and being good at one thing. They shedded unrelated businesses that are fine on their own, but not part of the story. They also hired a ton of really, good people from competitors that quite frankly were doing better than them and they've started to shift their focus to margin over volume. This is, I think, sustainable. We've seen with Old Dominion, how a good operator over time can just outperform the sector and the market just based on the strength of their operations. I think XPO has elevated itself to that level.

Tyler Crowe: Similar follow up, and this is a discussion you and I, I think we had a couple of years ago too, where it felt like a time where trucking, especially was like, you've got Old Dominion XPO is up and coming, but you had a lot of subpar operators in this industry, so it was Old Dominion and to a lesser degree, XPO was taking candy from a baby taking market share here because they couldn't seem to get their hand out of the paste jar. It seems like that's less the case now. Obviously, Old Dominion XPO are dominant players here, but some of the other players in the industry found religion, I guess, you will, on March and on capacity additions at a reasonable rate. With that in mind, with the outperformers like XPO and Old Dominion that have done so well, now that they're facing more competent competition, is the growth opportunities as robust here or is it a little bit more of a knife fight for share?

Lou Whiteman A couple of things going on, I think. For one, until recently, XPO didn't deserve to be in that conversation as a good performer. What you've seen is them enter this. I think it's more of a risk for, say, an Old Dominion, which has benefited over the years for just being the only ones who could get pricing right. The other answer is scale. At the end of the day, you still have advantages to scale that you can be more efficient, even if it's the super friends, a couple of players that are really, better than anyone else, there's enough business out there. XPO is finally trading. At a multiple similar to Old Dominion, which you never saw a few years ago. I do think probably the 340% over three years, that we can't repeat that, that a lot of that was playing catch-up. But I think that, like I said, Old Dominion is the model. I think there is room for a few companies here that just outperform their peers and, over time, outperform the market.

Tyler Crowe: Trucking, as boring as it sounds, it's been a weirdly fascinating industry over the past I don't know, at least decade to follow. Interesting to see XPO, I can almost say getting down to fighting weight, I guess would be the best way to put it so they can compete. I'll give my answer here too, because one industry that's been quite lousy this year and so far, year to date, as well as over the past year or so has been insurance. Obviously there is reasons for that. Insurance is a cyclical industry, and a lot of the underperformers in the insurance industry in general have been a lot of high flyers, especially your specialty insurers and things like that. You're also seeing a lot of pricing pressure on the big lines of insurance that we see automotive and homeowners, some of the biggest a lot of these competitors are trying to take share and when you take share, profitability sinks and that tends to hurt stocks.

But health insurance in particular has been hit even harder. Rising costs are getting hard to control, plus lots of backlash from patients, and just in general, the feeling towards health insurers has been not great because high rates of denials, higher copays. It's the stuff that frustrate people using their health insurance. It's led to quite a bit of unpopularity. This is where there’s this one company that seems to be separating itself from the rest here, and obviously, it’s a small one, so it has that opportunity. It's called Oscar Health, ticker OSCR. They straddle this health insurance technology and health insurance broker business. Most of what it did was, when it got started in 2012, it was contingent on the American Healthcare Act or the Obamacare marketplaces. What it did was it set up programs where small business owners would let their employers buy individual insurance and using Oscar's platform, the employer would basically reimburse the individual for it, and that would allow them to meet their compliance for insuring their customers, while giving them — their employees, excuse me,— while giving them more options and actually was a way of relatively controlling costs because there were some subsidies related to using the marketplaces.

It kinda worked for a while, but when the marketplaces, ObamaCare marketplaces are doing well. But many insurers have left that program, and it’s been walking in the woods, trying to figure out what it wants to do next, and figure this out, and it’s starting to gain traction here. It's now more focused on providing individual insurance themselves, taking more of the underwriting burden, and so far, they've done a decent job. Their combined ratios are, have been varying. I think their health loss ratios were 70% in the most recent quarter, combined ratios 87, 88, which by insurance standards, is quite good. Any insurance, almost any line that you're looking at, below a 90% coverage loss ratio, which is basically how much you have to pay out in costs for healthcare or auto claims or anything like that, relative to the premium bring in. It's basically saying you have a 10% operating margin. Industry lingo. I know it's silly, but it works pretty well for an insurer.

Despite the fact that they've been winding down some big-name programs, they had a program with Cigna that didn't quite work out. They've been focusing more on the individuals. It seems to be working. I'm not saying they're out of the woods yet, and I'm not wholeheartedly going to pound the table to say, this is an awesome company now, but it's very interesting to see and obviously the stock is reflecting the fact that they are getting some traction with what they're doing. Coming up next, we're going to get into listener questions about all these massive IPOs coming to market.

Hey, just a reminder, we love answering your questions. If you do want your question answered on air, go ahead and email us at podcasts @fool.com. Three rules as always. No. 1, keep it Foolish, two keep it short enough for us to read, and three, we cannot give personalized advice, so let's try to keep it relatively generic.

As long as we've been taking questions, what we have seen more than anything else so far is questions about SpaceX, Anthropic and OpenAI IPOs, specifically to how they're going to impact the broader market. We're talking about early index inclusion for a lot of these companies because they're going in so big, and the questions have been numerous. But there's just two that are most representative of what we're talking about. This was from Ben Jackson. "With the recent changes to the Nasdaq index and immature over to value companies like SpaceX IPO with little supply — he's being a little diminutive here — but should your average ETF investor or index investor be reconsidering or selling their ETF portfolio to avoid the long-term turbulence that these large IPOs going into these ETFs may cause. This one is from Thomas Bianco. If we already know that approximately $4 trillion of new money will be sucked up in these three IPOs, basically, the combined market value, they think is going to be around $4 trillion for all three of them when they go public, How can we adjust our current equities positions to account for these forthcoming disruptions?

Now, I want to just give a little bit of context here because all the money we're going to be sucking up with these large ones. Right now, data from the Federal Reserve of St. Louis says that about $8.1 trillion is in money market funds as of fourth quarter of 2025. That sounds like a lot, but you also have to factor, how much is in the market in general. We have a thing at The Motley Fool. It’s called the PT potential growth indicator. Basically, it takes all the cash that's on the sidelines or in money market accounts, like the Fred data says and then divided by the total stock market valuation, which is at about 10.1%. Over the past 30 years, that is a little bit on the lower side. You could say that that's saying, everyone's pretty optimistic. They want to be in the market relative to what we see in other different times. With those little factoids, the amount of money that we're talking about here, guys, what do you have to say to Ben and Thomas' questions here?

Lou Whiteman: I think the first thing we should note is that the IPO headline number isn't the same as the money raised. SpaceX is looking for a $1.8 trillion IPO valuation, but it's only actually raising 75 billion. That said, 75 billion is a massive number for an IPO. I think the point is still relevant. The net impact, though, I'm not sure what I think. It might suck money away from other areas because again, we have a lot of demand here. $75 billion worth of money has to be found here. But over the next six months, billions of dollars in SpaceX stock is going to be unlocked and free to trade. These are people who got in before the IPO. If those insiders decide to sell, that could free up at least 75 billion, if not more for other opportunities that could impact other stocks in a positive way. That actually could be a positive impact in some ways, Tyler. Bottom line, though, is the only thing we know for certain is it's going to cause volatility. I personally am not going to reposition things or do anything in anticipation of this. I think that, yes, there could be volatility, but over time, I think this will balance itself out as a long term focused investor. I'm not going to lose sleep on this, I'm going to just make some popcorn and watch.

Matt Frankel: As Lou said, the money raised won't be in the trillions of dollars, but the latest forecast is for around 240 billion across those big three, SpaceX, Anthropic, and OpenAI. Just to put that in context, in 2025, the entire IPO market, all companies raised about $45 billion combined. The largest U.S. IPO previously raised about 22 billion. We are in uncharted territory. There’s plenty of money on the sidelines, as Tyler mentioned, the money market accounts, but the reality is that a lot of money flowing into these three IPOs is going to have to come from somewhere, and existing stock investments are probably going to be a big source. Specifically, I would think that most people are going to sell Magnificent 7 shares to invest in some of these. No one's going to sell their realty income stock to buy SpaceX is my point there. Tesla could be an interesting one to watch. A lot of Elon Musk fans could sell one Elon Musk stock to buy another.

But on the other hand, there is a case to be made that there's going to be a lot of new money flowing into the market this year, not just because of these IPOs. These IPOs are certainly increasing the overall interest in the stock market by retail investors. As we're recording this, I actually got a notification from my broker that the SpaceX IPO is available. A lot of people are taking notice. It's going to be an interesting year for sure. All three could create significant short-term volatility, but like Lou said, I'm not losing sleep over it. I think it's going to work itself out in the long term, and I'm not planning on buying any of these three on Day 1, at least.

Tyler Crowe: Feel like we're probably all going to get that SpaceX email from our brokers in the next week or so I want to just actually conclude with this, too, about ETFs and allocations and things like that. This is an important thing for people to consider when they're buying ETFs. Say you're buying a broad-based S&P 500 ETF, there are two different types. There are market cap-weighted ones, which is obviously the ones that are going to be most influenced here by the large amount of money going into them. But there's also equal-weight CAP or equal-weighted indices as well, where instead of doing market cap as, it's every single company at every equal weights. It's pretty self-explanatory. Ones like this are obviously going to probably see less volatility relative to these trades. If you are looking to get broad exposure to an entire market, but are perhaps more skittish, I guess you could say, of these mega-cap companies coming in and becoming a larger and larger portion of what's supposed to be a broad-based index. There are equal-weight index options out there that might be worth considering.

As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show. Thanks to producer Dan Boyd and the rest of the team for Lou, Matt, myself, thanks for listening, and we'll chat again soon.

Broadcom earns a BUY rating due to its strategic evolution as a core AI infrastructure enabler, not just a semiconductor cycle play. AVGO's custom accelerators, high-speed networking, and XPV financing platform position it at the high-value end of AI capex trends, driving superior operating leverage. Recent FQ2 results showed strong AI semiconductor revenue growth and robust free cash flow, with management maintaining a >$100B AI revenue target for fiscal 2027.

The artificial intelligence (AI) infrastructure market is booming, with big tech companies set to spend around $725 billion on capital expenditures (capex) this year alone. To put that in perspective, that is more than the gross domestic product (GDP) of all but 22 countries in 2025.

While AI infrastructure stocks have performed well, I think two stocks that have generally been underappreciated during this boom have been Broadcom (AVGO 0.85%) and Taiwan Semiconductor Manufacturing (TSM +0.46%). Let's take a closer look at these two unsung AI stocks and why they look like buys.

Broadcom: An ASIC and networking leader

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As spending on AI chips ramps to extraordinary levels, hyperscalers (owners of large data centers) have been increasingly looking for ways to save on costs. One of the best ways to do this is to turn to custom chips called application-specific integrated circuits (ASICs). These are chips that are hardwired to handle specific tasks. Because they are sole-purpose chips, they tend to handle the tasks for which they were developed well, while also being more energy efficient. This is particularly ideal for AI inference, which is an ongoing cost.

One of the first companies to hop on the ASIC train was Alphabet, which, with the help of Broadcom, developed its tensor processing units (TPUs) more than a decade ago. Alphabet has long used these chips to power its internal workloads, but as AI exploded, it gave the company a huge cost advantage, as it used its chips to train its Gemini AI model and run inference. With Alphabet being one of the biggest AI data center spenders, Broadcom continues to reap the rewards of being Alphabet's co-developer partner.

Meanwhile, Broadcom added another revenue stream when Alphabet began letting a few select customers directly order TPUs from it, including a $21 billion order from Anthropic to be delivered this year. The three companies have also extended their partnership for future years and TPU iterations. At the same time, the success of TPUs has led to other hyperscalers working with Broadcom to develop their own custom chips. The company claims this will be a well-over $100 billion business in fiscal 2027.

Not to be overlooked, Broadcom is also a leader in data center networking and optical connectivity. Its Ethernet solutions are pivotal in the transfer of data, while it's also at the forefront of co-packaged optics (CPO). By combining optical and electronic components within the same package, CPOs can slash interconnect energy consumption by up to 65% compared to traditional pluggable optics. This business also ties directly into its ASIC business, as customers using its proprietary ASICs need its networking technology to link their chips together.

With Broadcom riding two powerful AI infrastructure trends, ASICs and next-gen optical components, the stock is a buy.

Image source: Getty Images.

Taiwan Semiconductor Manufacturing: The chip manufacturing king

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One of the unheralded stocks of the AI boom is Taiwan Semiconductor Manufacturing, or TSMC for short. While it was recently reported that Alphabet and Nvidia were considering using Intel as a backup chip manufacturer, TSMC still holds a virtual monopoly on the making of advanced logic chips.

At this time, TSMC is the only foundry that has proven it has the expertise to make advanced chips at small node sizes (a measure of chip density) at scale with high yields (few defects). This has made it an indispensable part of the semiconductor value chain and given it strong pricing power. The company is also working with its customers to aggressively expand its capacity to meet rising demand for chips.

With TSMC benefiting from the AI infrastructure boom and poised to be a winner no matter which chip technologies gain share, this is a stock you want to buy and hold for the long term.