Mastercard (NYSE:MA | MA Price Prediction) and PayPal (NASDAQ:PYPL) just closed Q1 2026 reports that look like mirror opposites. Mastercard delivered accelerating services growth and margin expansion from a position of dominance. PayPal beat low expectations under brand-new CEO Enrique Lores, but guided to a flat-to-down 2026. Both stocks trade below where they started the year, and investors are asking which discount is real.
Services Carry Mastercard. A New CEO Carries PayPal. Mastercard reported EPS of $4.60 against a $4.41 consensus, its fourth consecutive beat, on revenue up 15.8% to $8.398 billion. The engine is diversification: value-added services and solutions grew 22%, well ahead of the 12% payment network line. CEO Michael Miebach framed it plainly, saying the company is “advancing agentic commerce with Mastercard Agent Pay and expanding our stablecoin solutions through the planned acquisition of BVNK.”
PayPal beat too, posting $1.34 EPS versus a $1.27 estimate on $8.353 billion in revenue. But the quality was thinner. GAAP operating margin contracted 182 basis points to 17.8%, and net income fell 13.52% year over year. Lores called the moment an opportunity to “sharpen our strategy, simplify our organization, and improve both our growth trajectory and cost structure.” Translation: cleanup.
A Duopoly Network vs. a Commoditized Checkout The strategic gap is wider than the tickers suggest.
Lens Mastercard PayPal Q1 revenue growth 15.8% 7.2% Operating margin 60.8% 17.8% 2026 EPS trajectory Growth continuing Flat to slightly lower vs. $5.31 Core bet Agentic commerce, stablecoins, cross-border Branded checkout turnaround Mastercard sits on a global rail with 13% cross-border volume growth and a rising services layer. PayPal is defending share against Apple Pay, Shop Pay, and every embedded wallet, while active accounts fell 0.2 million sequentially. The Q4 2025 admission that branded checkout “has not been where it needs to be” still hangs over the story.
What Actually Decides 2026 For Mastercard, keep an eye on whether services growth stays north of 20% and whether the BVNK stablecoin deal answers the disintermediation worry directly. For PayPal, the tell is transaction margin dollars and whether Lores can stabilize branded checkout without another guide-down. Q2 EPS is already guided to decline roughly 9% against last year’s $1.40.
Why I Would Own Mastercard Here For me, this comparison has a clear answer. Mastercard is down 5.21% year to date despite compounding EPS and expanding margins, which reads as a rare discount on a duopoly asset. PayPal, off 21.62% YTD and down 84.2% over five years, trades at a forward PE near 9 for a reason: it must spend aggressively just to defend commoditized checkout share. If you want deep-value optionality on a Lores-led turnaround, PayPal fits. I would rather own the toll road. Mastercard’s $11.7 billion buyback authorization and expanding digital services moat give me a cleaner path to double-digit upside without needing a strategy reboot to work.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Mastercard didn't make the cut. Grab the names FREE today.
Diane King Hall talks about Erste Group's upgrade on Meta Platforms (META) as the firm sees promise in the Mag 7 giant's CapEx plans. Bank of America is reinstating Shopify (SHOP) with a buy rating and a $150 price target.
It's hard not to love high dividend yields. Who doesn't want more dividends for their money? Pfizer (PFE +1.31%) and its current yield of 7% will certainly grab your attention.
But remember that the company sets the dividend amount, and the market sets the stock's yield. A yield as high as Pfizer's can be a warning that Wall Street sees problems and trades the stock at a price that reflects those risks.
The problem for investors is that it's difficult to see any obvious red flags in Pfizer's dividend -- right now. Here's why it's far riskier than it might look.
Image source: The Motley Fool
Pfizer's dividend looks and sounds safe, on the surface Wall Street analysts estimate that the pharmaceutical giant will earn approximately $2.99 per share this year. That's good news. Pfizer pays out $1.72 in dividends, so, at least based on earnings, the payout ratio is healthy at 57%. Additionally, the management team has been quite vocal about the dividend. Pfizer noted that preserving and supporting its dividend is a priority as recently as its first-quarter 2026 earnings call in May.
That will resonate with investors. The company benefited from selling COVID-19 vaccines and treatments in the early years of the pandemic, but has struggled since then as that windfall dried up. Pfizer's dividend, especially at a 7% yield, genuinely moves the needle for investors who might be sitting on some unrealized capital losses. The stock is still 60% below its 2022 high.
Unfortunately, there are risks now and on the horizon Pfizer is facing the dreaded patent cliff over the next few years, when patents on some key products expire; these include Eliquis, its top seller in 2025, with roughly $8 billion in sales. Its COVID-related products Comirnaty and Paxlovid, combined, generated $6.7 billion in sales last year but continue to decline sharply. Industry analysts estimate that Pfizer could lose $17 billion in revenue from its existing portfolio by 2030.
The company is working to plug that hole with new drugs from its pipeline, but Pfizer's financial profile could dramatically shift soon. On top of that, the company didn't earn enough cash flow to cover its dividends in 2025, falling approximately $700 million short. Dividends are a cash expense, so that's a red flag, regardless of what earnings based on generally accepted accounting principles (GAAP) say.
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What should investors do? Pfizer seems committed to the dividend for now. The company has $13 billion in cash on hand, so dipping into that last year to cover its payouts isn't the end of the world. However, it's difficult to place much confidence in the dividend from one quarter to the next, because the cash payout ratio is tight and uncertainty about the next few years looms over Pfizer's business.
If you're buying Pfizer stock for its dividend, you'll want to weigh these risks, because the dividend isn't as ironclad as it looks.
Key Takeaways Athleta's sales fell 12% to $270M, with comps down 11% as legacy inventory clearance weighed on Q1 results.Gap says 2026 is a transition year for Athleta, focused on product, positioning and merchandising.New Journey travel collection and Elation leg silhouettes showed strong engagement and sell-through. Gap Inc.’s (GAP - Free Report) turnaround has gained traction across much of its portfolio, but Athleta remains the notable exception. While Gap, Old Navy and Banana Republic continue to post positive comparable sales growth, Athleta is still in the early stages of a multiyear rebuilding effort. Management has been clear that 2026 is a transition year for the brand, with the priority on rebuilding product, brand positioning and merchandising rather than pursuing near-term sales growth. The key question for investors is whether these foundational changes can translate into sustainable momentum over the coming quarters.
The first-quarter results highlighted the work still ahead. Athleta's net sales declined 12% year over year to $270 million, while comparable sales fell 11%, missing the company's expectations. Management attributed the weakness primarily to efforts to clear legacy inventory, a process that has taken longer than anticipated and weighed on top-line performance. Despite the sales pressure, Gap noted that introducing a cleaner assortment remains essential before the brand can return to more consistent growth.
Encouragingly, early signs suggest the strategy may be gaining traction beneath the surface. Gap reported positive customer response to Athleta's new Journey travel collection in select locations, with strong engagement and sell-through rates. New leg silhouettes across core franchises such as the Elation line have also performed well, giving management greater confidence in its future product direction. The company plans to continue clearing older inventory through the second quarter before introducing a broader assortment that better reflects Athleta's long-term positioning in the fall season.
While Athleta is likely to remain a drag on Gap's overall performance in the near term, management expects gradual improvement in the second half as new products gain a larger share of the assortment. Leadership continues to view Athleta as an important long-term growth engine and is investing in product, talent and creative capabilities to strengthen the brand's competitive position. The pace at which these initiatives translate into stronger comparable sales will likely determine whether Athleta can become a meaningful contributor to Gap's next phase of growth.
GAP’s Price Performance, Valuation & EstimatesShares of this Zacks Rank #3 (Hold) company have lost 31.9% in the past six months compared with the industry’s decline of 12.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, GAP trades at a forward price-to-earnings ratio of 7.90X compared with the industry’s average of 14.44X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for GAP’s current fiscal-year sales and earnings implies year-over-year growth of 1.2% and 9.9%, respectively. For the next fiscal year, the consensus estimate indicates a 1.9% rise in sales and 10.8% growth in earnings. The company’s EPS estimate for both fiscal years has remained stable in the past seven days.
Image Source: Zacks Investment Research
Key PicksRoss Stores (ROST - Free Report) , a leading U.S. off-price retailer operating Ross Dress for Less and dd's DISCOUNTS stores, sports a Zacks Rank #1 (Strong Buy) at present. ROST delivered a trailing four-quarter earnings surprise of 10.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Ross Stores’ current fiscal-year sales and earnings suggests growth of 9.1% and 17.1%, respectively, from the year-ago figures.
Five Below, Inc. (FIVE - Free Report) , which operates as a specialty value retailer, currently flaunts a Zacks Rank #1. FIVE delivered a trailing four-quarter earnings surprise of 70.1%, on average.
The Zacks Consensus Estimate for Five Below’s current fiscal-year sales and earnings suggests growth of 14.36% and 34.3%, respectively, from the year-ago figures.
Tapestry, Inc. (TPR - Free Report) provides accessories and lifestyle brand products in North America, Greater China, the rest of Asia and internationally. At present, TPR sports a Zacks Rank of 1. TPR has delivered a trailing four-quarter earnings surprise of 15.6%, on average.
The Zacks Consensus Estimate for current fiscal-year sales and earnings implies growth of 13.8% and 36.3%, respectively, from the year-ago reported figures.
Key Takeaways CCL is facing near-term yield pressure in Europe, particularly across Mediterranean deployments.Carnival cut its FY26 yield growth outlook by about one point, creating a 14-cent EPS headwind.CCL's FY27 booked position is at historical highs for both pricing and occupancy. Carnival Corporation (CCL - Free Report) is navigating near-term yield pressure from Europe, but its forward booking profile suggests that the setback may be temporary rather than structural. The pressure has been most visible in European deployments, particularly the Mediterranean, where prolonged Middle East-related volatility, elevated airfares and reduced international flight capacity for North American guests weighed on demand momentum.
The impact is reflected in the company’s revised fiscal 2026 yield outlook. Carnival lowered its full-year yield growth expectation by roughly one percentage point from its prior guidance, reducing earnings per share (EPS) by 14 cents due to operational headwinds. The revision includes both ticket and onboard revenues, with part of the pressure tied to slightly lower occupancy expectations in Europe.
Even so, the broader demand picture remains constructive. Carnival had already built a stronger booked position and pricing profile in Europe before demand softened, giving it flexibility to protect price integrity. While this trade-off may weigh on near-term occupancy, it supports revenue quality and prioritizes long-term pricing strength over short-term volume recovery.
CCL’s booked position also remains healthy. For fiscal 2026, 93% of the business is already on the books, with less inventory left to sell than last year and record pricing across the remaining quarters. For fiscal 2027, Carnival’s book position is at historical highs for both price and occupancy, reinforcing confidence in the underlying cruise demand environment. European deployments for fiscal 2027 were up in the mid-teens percentage range at higher prices.
Overall, Carnival’s fundamentals support the view that Europe-led pressure is more transitory than structural. The company’s disciplined revenue management, cost-control initiatives, measured capacity growth, expanded destination portfolio and improving leverage profile provide support to the earnings setup. Barring renewed geopolitical or air-travel disruptions, CCL appears well positioned to absorb the near-term European setback and sustain its longer-term yield recovery.
CCL’s Price Performance, Valuation & EstimatesShares of Carnival have dropped 1.3% in the past three months against the industry’s 1.8% growth. In the same time frame, other industry players like Royal Caribbean Cruises Ltd. (RCL - Free Report) have gained 3.6%, while Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has lost 4.4%.
CCL Stock’s Three-Month Price Performance
Image Source: Zacks Investment Research
CCL stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 11.27, well below the industry average of 16.89. Then again, other industry players, such as Royal Caribbean and Norwegian Cruise, have P/E ratios of 15.47 and 10.37, respectively.
CCL’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Carnival’s fiscal 2026 earnings per share has declined from $2.25 to $2.20 over the past 30 days.
EPS Trend of CCL Stock
Image Source: Zacks Investment Research
The company is likely to report dismal earnings, with projections indicating a 2.2% year-over-year fall in fiscal 2026. Conversely, industry players like Royal Caribbean are likely to witness growth of 10.4% year over year in 2026 earnings. NCLH is likely to project a fall of 19.4% year over year in 2026 earnings.
CCL stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Salesforce (CRM - Free Report) .
Salesforce currently has an average brokerage recommendation (ABR) of 1.65, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 52 brokerage firms. An ABR of 1.65 approximates between Strong Buy and Buy.
Of the 52 recommendations that derive the current ABR, 35 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 67.3% and 5.8% of all recommendations.
Brokerage Recommendation Trends for CRM
Check price target & stock forecast for Salesforce here>>>
The ABR suggests buying Salesforce, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is CRM Worth Investing In?Looking at the earnings estimate revisions for Salesforce, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $14.12.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Salesforce. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Salesforce.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Salesforce (CRM - Free Report) Salesforce is the leading provider of on-demand Customer Relationship Management (CRM - Free Report) software, which enables organizations to better manage critical operations, such as sales force automation, customer service and support, marketing automation, document management, analytics and custom application development. Its offerings are delivered on the Agentforce 360 Platform, which connects customer data with integrated AI across systems, apps and devices.
CRM is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. CRM has a Growth Style Score of B, forecasting year-over-year earnings growth of 12.8% for the current fiscal year.
For fiscal 2027, 17 analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.97 to $14.12 per share. CRM boasts an average earnings surprise of +17.3%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CRM should be on investors' short list.
Key Takeaways CRM's 5.8% drop trails industry gains as AI, interest rates, inflation and geopolitics weigh on software.Salesforce's Agentforce ARR surged 205% to $1.2B, while AI and Data ARR more than tripled to $3.4B.Salesforce expects 10-11% Q2 revenue growth and about 11% for FY27, while valuation looks cheaper. Salesforce Inc. (CRM - Free Report) shares have declined 5.8% over the past three months, underperforming the Zacks Internet – Software industry’s 5.7% gain. While the weak performance may concern investors, Salesforce is far from being the only software stock under pressure.
Several enterprise software names, including SAP SE (SAP - Free Report) , Adobe Inc. (ADBE - Free Report) and Workiva Inc. (WK - Free Report) , have also struggled during the same period. SAP, Adobe and Workiva have fallen 5.1%, 8.7% and 9.9%, respectively. The broad-based weakness suggests that investors are reassessing the software sector rather than losing confidence in Salesforce alone.
Salesforce 3-Month Price Return Performance
Image Source: Zacks Investment Research
The biggest overhang is the rapid rise of artificial intelligence, particularly agentic AI. These AI systems can automate complex business tasks with minimal human intervention, prompting investors to question whether the traditional software-as-a-service (SaaS) pricing model, which largely depends on per-user subscriptions, could face pressure over time. If enterprises eventually require fewer software users, subscription growth could slow across the industry.
At the same time, software companies continue to deal with a difficult macroeconomic backdrop. Higher interest rates, persistent inflation and geopolitical uncertainty have made businesses more cautious about technology spending. Many enterprises are taking longer to approve large software purchases, resulting in extended sales cycles across the industry.
Salesforce is naturally exposed to these trends because most of its revenues come from enterprise customers. Slower IT spending could delay new customer wins and reduce expansion opportunities. However, the recent pullback appears to reflect broader market concerns rather than any meaningful deterioration in Salesforce's business.
Salesforce Is Becoming More Than a CRM CompanySalesforce remains the global leader in customer relationship management software, according to Gartner. However, the company is no longer relying solely on its customer relationship management software for growth. It is transforming into a broader enterprise AI platform by combining customer data, collaboration tools and AI-powered automation.
This strategy has been built through both large and small acquisitions. Slack strengthened Salesforce's collaboration platform, and Informatica expanded its data management capabilities, while newer acquisitions such as Doti AI and Spindle AI are enhancing its AI offerings.
The company's biggest growth engine today is Agentforce. In the first quarter of fiscal 2027, Agentforce’s annual recurring revenues (ARR) surged 205% year over year to $1.2 billion, highlighting strong customer demand for Salesforce's AI agents.
The momentum extends beyond Agentforce. Combined AI and Data ARR, including Agentforce, Data 360 and Informatica Cloud, reached $3.4 billion in the first quarter, more than tripling from the year-ago period. Nearly half of Agentforce and Data 360 bookings came from existing customers, showing that Salesforce is successfully expanding relationships within its large installed customer base.
That matters because selling more products to existing customers is typically more profitable than acquiring new ones. It also demonstrates that enterprises are willing to spend more on Salesforce's AI platform despite the uncertain economic environment.
CRM’s Revenue Growth Shows Signs of ImprovementOne of the biggest investor concerns has been Salesforce's slowing growth. As the company became larger, revenue growth naturally moderated from the high-growth rates seen several years ago, leading many investors to believe Salesforce had entered a mature phase.
Recent results paint a more encouraging picture. First-quarter fiscal 2027 revenues increased 13.3% year over year, marking a noticeable acceleration from recent quarters. While Salesforce is still way behind its earlier hypergrowth phase, double-digit growth remains impressive for a company of its scale.
Management's guidance also reflects confidence in demand. Salesforce expects revenues to grow 10-11% in the fiscal second quarter and approximately 11% for the full fiscal year. Those projections are largely in line with Zacks Consensus Estimates and suggest that growth remains healthy despite a cautious enterprise spending environment.
Image Source: Zacks Investment Research
Salesforce’s Valuation Leaves Room for UpsideThe recent share price weakness has also made Salesforce's valuation more attractive. CRM currently trades at a forward 12-month price-to-earnings (P/E) ratio of 11.26, well below the industry average of 26.32.
Salesforce Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
Compared with peers, Salesforce also appears reasonably valued. SAP and Workiva trade at forward P/E multiples of 17.74 and 16.24, respectively, while Adobe trades at 8.36 times forward earnings. Although Adobe is cheaper, Salesforce's valuation looks attractive considering its improving growth profile and expanding AI business.
Final Thoughts: CRM Stock Seems Worth HoldingSalesforce still faces legitimate challenges. The software industry is adjusting to the rise of AI, enterprise customers remain cautious about spending, and macroeconomic uncertainty could continue to weigh on near-term demand.
However, the recent decline appears to reflect investor sentiment more than weakening fundamentals. Salesforce is rapidly building one of the industry's strongest enterprise AI platforms and is showing early signs of reaccelerating revenue growth. At the same time, its expanding AI ecosystem is creating new monetization opportunities while strengthening customer relationships.
With the stock trading at a meaningful discount to the broader software industry, much of the near-term uncertainty already appears to be reflected in the valuation. While volatility may persist, the company's long-term growth story remains intact. For existing investors, holding the stock continues to look like the more sensible strategy than selling into the recent weakness.
Salesforce carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways Salesforce sees Informatica strengthening its enterprise AI and data management position.Salesforce's AI and data ARR, including Agentforce, Data 360 and Informatica Cloud, jumped 200% to $3.4B.CRM raised the low end of fiscal 2027 revenue guidance after strong first-quarter momentum. Salesforce, Inc. (CRM - Free Report) is betting that the integration of Informatica will strengthen its position in enterprise AI and data management. The enterprise software maker acquired Informatica last year for $8 billion. As companies increasingly rely on trusted data to power AI applications, Informatica's capabilities could become a key growth catalyst for Salesforce in fiscal 2027 and beyond.
Informatica enhances Salesforce's Data 360 platform by adding advanced data integration, governance, quality and metadata management capabilities. These tools help businesses organize information from multiple sources, making AI agents more accurate and reliable. By combining Informatica with Agentforce and Data 360, Salesforce aims to offer customers a complete platform for building AI-powered business workflows.
The strategy is already showing encouraging signs. During the first quarter of fiscal 2027, Salesforce reported that combined AI and data annual recurring revenues (ARR), including Agentforce, Data 360 and Informatica Cloud, reached $3.4 billion. This reflects a whopping 200% year-over-year surge. Management also noted that Informatica's business contributed to first-quarter revenue outperformance and that revenue synergies have started to emerge following the acquisition.
Salesforce delivered strong financial results in the first quarter. Revenues increased 13% year over year to $11.13 billion, while current remaining performance obligations (cRPO) rose about 14% to $33.6 billion. Encouraged by this momentum, the company raised the lower end of its fiscal 2027 revenue guidance to $45.9-$46.2 billion from $45.8-$46.2 billion projected earlier.
The integration also expands Salesforce's cross-selling opportunities by allowing existing CRM customers to adopt enterprise-grade data management solutions. As more businesses move AI projects into large-scale production, the combined platform could drive higher customer spending, improve retention and create a stronger foundation for long-term revenue growth. The Zacks Consensus Estimate for fiscal 2027 revenues is currently pegged at $46.09 billion, indicating a year-over-year increase of approximately 11%.
CRM Faces Intense AI Competition From Microsoft and OracleSalesforce is no longer competing only in the traditional customer relationship market. As enterprises accelerate spending on AI-powered software, Microsoft Corporation (MSFT - Free Report) and Oracle Corporation (ORCL - Free Report) are emerging as two of its biggest rivals. Both companies are using their large enterprise customer bases, cloud platforms and expanding AI portfolios to win a greater share of enterprise AI budgets.
Microsoft remains one of Salesforce's strongest competitors, thanks to its broad ecosystem spanning Azure, Microsoft 365 and Dynamics 365. The company is rapidly embedding AI copilots across its productivity and business applications, enabling customers to automate sales, customer service and business workflows. This integrated approach gives Microsoft a meaningful advantage, as enterprises can adopt AI within the software they already use.
The momentum is evident in its financial performance. In the third quarter of fiscal 2026, Azure and other cloud services revenues grew 40% year over year, while Microsoft's AI business surpassed a $37 billion annual revenue run rate, soaring 123% from the prior year. With its vast installed base and deep AI investments, Microsoft poses a significant competitive threat to Salesforce's Agentforce platform.
Oracle is also becoming a more formidable player in enterprise AI. The company is expanding AI capabilities across Oracle Cloud Infrastructure (“OCI”), Fusion ERP, customer experience and database offerings, enabling businesses to automate a wide range of enterprise processes. Strong demand for AI infrastructure is already translating into faster cloud growth.
In the fourth quarter of fiscal 2026, Oracle's total cloud revenues rose 47% year over year to $9.9 billion, while OCI revenues surged 93% to $5.8 billion. Combined with Oracle's long-standing relationships with large enterprises, this cloud momentum strengthens its ability to compete with Salesforce as organizations increasingly invest in AI-driven business applications.
Salesforce’s Price Performance, Valuation and EstimatesShares of Salesforce have plunged 37.3% year to date, while the Zacks Internet – Software industry has fallen 11.1%.
Salesforce YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 11.26, significantly below the industry’s average of 26.32.
Salesforce Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Salesforce’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 12.8% and 9.7%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward over the past 30 days.
Image Source: Zacks Investment Research
Salesforce currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Industrial bellwether Dover (NYSE:DOV | DOV Price Prediction) has spent the year shrugging off recession chatter while quietly riding an AI data center tailwind. Its Pumps & Process Solutions arm makes thermal connectors used in liquid cooling, and Climate & Sustainability Technologies just posted +15.2% organic growth. With shares up 16.29% YTD, the real question for retirees is whether the dividend behind that 69-year streak is still bulletproof.
Dividend Snapshot Metric Value Annual Dividend (run-rate) $2.08 Dividend Yield 0.93% Consecutive Years of Increases 69+ years Most Recent Increase $0.515 to $0.52 (Q1 2026) Dividend King Status Yes Payout Ratios Leave Massive Room Dover paid roughly $290 million in dividends in 2025 against $1.12 billion in free cash flow (FCF up 92.43% YoY). GAAP EPS came in at $9.61 versus $2.07 in dividends per share.
Metric Value Assessment Earnings Payout Ratio ~21.5% Healthy FCF Payout Ratio ~26% Healthy Operating Cash Flow Coverage ~4.6x Strong A Fortress Balance Sheet Dover ended 2025 with $1.68 billion in cash against $7.41 billion in equity. EBITDA of $1.87 billion easily services the long-term debt load (~$3 billion), keeping net leverage well under 1x.
Metric Value Assessment Total Liabilities / Equity 0.81 Conservative Net Debt / EBITDA under 1x Low Cash on Hand $1.68B Solid Buffer 69 Years of Increases and Counting Year Annual Dividend 2025 $2.075 2024 $2.05 2023 $2.035 2022 $2.015 2021 $1.995 Growth is slow (roughly 1% annually), but the streak survived the 2008 crisis and COVID untouched. Income hunters get reliability over yield.
Management Calls the Balance Sheet a Weapon CEO Richard Tobin said on the Q1 2026 call: “Our balance sheet remains strong and continues to provide flexibility to deploy capital toward long-term value creation… we remain disciplined in our approach to capital deployment.” With bookings of $2.46 billion and book-to-bill above 1.0 in all five segments, the cash engine feeding the dividend keeps accelerating.
The Verdict: This Dividend Is Rock Solid Dividend Safety Rating: Very Safe. A 21.5% earnings payout ratio, 26% FCF payout, sub-1x net leverage, and a 69-year increase streak leave virtually no scenario where Dover cuts. Dover fits income-oriented portfolios willing to accept a sub-1% starting yield in exchange for AI-infrastructure-driven dividend compounding. The setup is less compelling for investors who need current income today, because the 0.93% yield demands patience. For retirees prioritizing capital preservation and reliable raises, Dover is exactly the sanctuary it appears to be.
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Will data centers soon leave Earth? This prospect, long reserved for science fiction, takes on a very real dimension with the strategy carried by SpaceX. Faced with the explosion in energy needs of artificial intelligence, Earth’s orbit now imposes itself as a new frontier for digital infrastructures. Far more than a space project, this evolution could reshuffle the cards of the global technological economy, influencing financial market investments as well as the strategies of Tech giants.
In brief SpaceX is preparing a new generation of orbiting data centers to meet the growing energy demands of artificial intelligence. The Gigasat factory and its giant satellites pave the way for unprecedented space computing power, designed to surpass the limits of terrestrial infrastructures. The group’s industrial ambitions already attract financial markets and Tech giants, who see orbital computing as a strategic lever for the future. SpaceX’s solid Bitcoin reserve strengthens its ability to finance this colossal project, despite the technical and economic challenges still to overcome. The Deployment of Gigasat and the Dawn of Orbital Computing The industrial apparatus intended to realize this transition is already underway through unprecedented production structures. On June 8, a few days before its Nasdaq listing, SpaceX unveiled its giant Gigasat factory in Bastrop, Texas, a complex fully configured for the mass production of satellites dedicated to artificial intelligence.
By around 2027, the company aims to deliver a spatial computing capacity reaching 1 gigawatt (GW) per year. The flagship of this fleet will rely on breakthrough technical specifications :
Structural gigantism : the first-generation satellite named AI1 has a wingspan of 70 meters, exceeding the width of a Boeing 747 ; High energy density : each unit carries a computing payload ranging between 120 kilowatts (kW) on average and 150 kW at peak ; Hardware flexibility : the infrastructure uses an architecture of interchangeable chips to avoid exclusive allegiance to a single semiconductor supplier. Faced with the apparent complexity of the project, Elon Musk tempered observers’ enthusiasm during the presentation of this equipment. Thus, he stated that “the AI satellite is much simpler than a Starlink satellite”.
This relative simplicity hides an industrial logic dictated by terrestrial physical constraints, the company having filed an official request with the Federal Communications Commission (FCC) to deploy up to 1 million operational satellites. Such a shift to space is explained by the fact that terrestrial server farms critically face capacity limits of electrical networks and the scarcity of available land.
Space, by contrast, offers an environment where solar exposure allows collecting about five times more energy than on Earth’s surface, completely free from night cycles and weather disruptions. It is this unyielding environmental fact that led SpaceX’s leader to reiterate his deep belief that “space has the advantage of always being sunny”, making orbit the logical final destination for deep learning infrastructures, hence his definitive statement: “space is the only way to scale up”.
A Historic Capitalization Driven by AI Demand This deployment of computing constellations is now part of a financial strategy validated by public capital markets. At its Nasdaq listing on June 12, SpaceX raised about 75 billion dollars, closing its first day of trading at a historic market valuation of 2,100 billion dollars.
The company’s S-1 issuance prospectus explicitly relied on the explosion in AI infrastructure demand to justify this value, immediately attracting leading institutional funds such as Cathie Wood’s ARK, which acquired 3.3 million shares. For investors, the appeal lies in the long-term growth projections formulated by management, which targets 1,000 billion dollars in annual revenues by 2030. This growth is driven by orbital power aiming for 100 GW per year at this horizon, then ultimately scaling up to terawatts.
Beyond Wall Street’s enthusiasm, this infrastructure shift triggers concrete interest from the biggest players in the digital sector, who seek to free themselves from terrestrial geographic constraints. The Wall Street Journal reported as early as May that Google entered exclusive negotiations with SpaceX regarding the launch of these orbital data centers. This Big Tech interest confirms the commercial relevance of SpaceX’s model, which no longer positions itself only as a space transporter but as the ultimate supplier of raw power for future computing models. The influx of capital from these global strategic partnerships directly supports the long-term viability of the Gigasat factory.
A Treasury Anchored in Bitcoin Facing Industrial Challenges Beyond stock market performance, the financial robustness of this ecosystem stands out through a corporate treasury strategy heavily exposed to crypto. SpaceX indeed maintains a particularly robust balance sheet including 18,712 BTC, representing a treasury valued at about 1.29 billion dollars.
This position, combined with the 11,509 BTC held by Tesla, places the billionaire-controlled entities among the largest corporate holders of bitcoin on U.S. regulated markets.
Thus, this top-tier financial base proves essential to support the colossal research and development effort needed to conquer the computing orbit. Additionally, the integration of bitcoin as a reserve asset offers unique capital flexibility to simultaneously manage industrial construction and fund successive launch campaigns amid economic uncertainties.
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Luc Jose A.
Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
The euro continues to face difficult trading sessions in the short term. The European currency has been unable to stabilize a consistent recovery, and for now, a phase of indecision appears to be dominating its recent strength.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Oracle (ORCL - Free Report) Austin, TX-based Oracle Corporation is one of the largest enterprise-grade database, middleware, and application software providers.
ORCL is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. ORCL has a Growth Style Score of A, forecasting year-over-year earnings growth of 5.2% for the current fiscal year.
Nine analysts revised their earnings estimate higher in the last 60 days for fiscal 2027, while the Zacks Consensus Estimate has increased $0.04 to $8.03 per share. ORCL also boasts an average earnings surprise of +12.9%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, ORCL should be on investors' short list.
The market expects Wells Fargo (WFC - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 14. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis biggest U.S. mortgage lender is expected to post quarterly earnings of $1.73 per share in its upcoming report, which represents a year-over-year change of +12.3%.
Revenues are expected to be $21.76 billion, up 4.5% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.78% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Wells Fargo?For Wells Fargo, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +0.19%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that Wells Fargo will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Wells Fargo would post earnings of $1.58 per share when it actually produced earnings of $1.56, delivering a surprise of -1.27%.
Over the last four quarters, the company has beaten consensus EPS estimates three times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Wells Fargo appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Key Takeaways The Dow Is Up After Closing Above 53K 1st Time MondayTrade Balance Sank to -$77.6B, but Better than ExpectedLater This Week, Q2 Earnings Hit from PEP, DAL Tuesday, July 7th, 2026
The rotation trade continues to benefit the Dow this morning, as gains in Tech on AI investment and buildout seep into other sectors in the economy. The blue-chip index is racing ahead another +170 points in pre-market trading so far today, adding to its all-time closing high Monday above 53K for the first time ever.
Look no further than Caterpillar (CAT - Free Report) , which supplies power sources and construction equipment for data center buildouts. It’s up modestly this morning but nearly +70% from the start of the year. Prior to today’s opening bell, soon-to-report big banks JPMorgan (JPM - Free Report) and Goldman Sachs (GS - Free Report) , +1.4% and +3.4%, respectively — both of which are Dow components. IBM (IBM - Free Report) , another Dow stock, is +3.45% currently, following a wave of positive news on its quantum supercomputing initiatives.
This is not to say other major indexes are performing poorly. The tech-heavy Nasdaq, while down -1.65% over the past five trading days, is up +100% over the past five years — including downward shifts from the war in Iran this year and tariff initiatives last year. This is nearly double the +54% the Dow has grown over the past five years — and even that averages +10% growth year over year.
Trade Balance Gets Steeper, but Less Than Expected
The U.S. Trade Balance for May fell into a deeper deficit month over month — -$77.6 billion from an improved revision to -$54.6 billion in April — but did not fall as much as the -$78.0 billion expected. We had spent the first third of 2026 in the -$50Bs range (not great, but a big improvement from the record low -$132 billion in March of 2025, directly ahead of the “Liberation Day” tariffs, which lasted one week). The October 2025 -$37.37 billion was the slimmest deficit since prior the Covid pandemic.
Today is also the day we have hearings on Section 301 tariffs, which concern forced labor and oversupply. We don’t have a clear sense on all the rules from this vista, but we do know 24 states are challenging these tariffs. The hearings are scheduled to continue through Friday. Then, in a couple weeks, Section 122 tariff surcharges are due to expire, after the Court of International Trade declared them unlawful back in May.
What to Expect from the Trading Week
Published in earnings fang finance
Key Takeaways Fiserv shares rose Tuesday following a report that big banks are considering buying a payment processing network from the company.Big banks are weighing a deal that would help them get around a law limiting the fees they can charge on debit card transactions, The Wall Street Journal reported. Get personalized, AI-powered answers built on 27+ years of trusted expertise.
Big banks have reportedly been looking to acquire a payments processing network from Fiserv, and the financial technology firm’s stock is getting a boost Tuesday on the news.
Shares of Fiserv (FISV) were up 4% in recent trading after The Wall Street Journal reported late Monday that banks including JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC) and PNC Financial Services (PNC) have weighed making an offer for a network owned by Fiserv.1
Acquiring their own payment processing network could allow the banks to bypass limits on the fees they charge merchants to process debit card transactions, which banks have said would pay for things like expanded rewards programs for debit cards. The report noted that some of the banks have already dropped the idea of pursuing a deal, likely due to concerns over pushback from regulators or merchants that could come as a result of such a deal.
Why This Matters to Investors A deal to sell part of its business or be acquired by a big bank could help lift Fiserv’s stock out of a rough stretch, as shares are down about 20% since the start of the year and some 70% in the last 12 months.
The banks are reportedly looking to get around the Durbin Amendment, part of the 2010 Dodd-Frank Act, which caps debit card transaction fees but also has an exception for banks that own their own payment network.
The deal would mirror Capital One’s (COF) acquisition of Discover Financial, and could help banks avoid billions in so-called “swipe fees” annually, while critics could say such a deal could lead to higher fees that would be passed on to consumers.
JPMorgan Chase declined to comment on the report, and Fiserv and the other big banks did not immediately respond to requests for comment.
Paying with a phone has gone from a novelty to a daily habit. Whether buying coffee, booking a ride or shopping online, consumers increasingly expect payments to happen instantly with just a tap or scan. That shift is reshaping commerce worldwide. Cash is losing ground, physical wallets are becoming less essential and merchants are replacing traditional point-of-sale hardware with software-based payment acceptance. At the same time, real-time and account-to-account payment networks are making money move faster and at a lower cost.
Mobile wallets such as Apple Pay, Google Pay and PayPal, powered by NFC, QR codes and in-app checkout, are now common across online and in-store purchases. Rising smartphone adoption, expanding internet access, and continued fintech innovation are driving broader acceptance across both developed and emerging markets. Wearables and tablets are extending this convenience further, allowing consumers to pay securely without carrying a physical wallet.
Younger consumers are leading the transition. Gen Z and Millennials value fast, seamless experiences, making mobile payments a natural fit for shopping, travel and day-to-day money management. Behind the scenes, artificial intelligence is strengthening fraud detection and transaction monitoring, enabling payment providers to identify suspicious activity more quickly. Blockchain-based technologies are also gaining attention for tokenization and faster settlement, helping improve both efficiency and security.
The next wave of innovation is already emerging. Agentic commerce could allow AI to complete purchases on behalf of users, handling payments in the background with minimal human input. Super apps such as WeChat Pay, Alipay and PhonePe continue to reshape consumer behavior by combining messaging, shopping, banking and payments within a single platform. Conversational commerce is adding another layer by enabling users to discover, order and pay directly through chat interfaces. Meanwhile, embedded payments are becoming increasingly common, allowing transactions to happen seamlessly inside apps, marketplaces and software platforms without interrupting the user experience.
Fortune Business Insights estimates the global mobile payments market touched $4.97 trillion in 2025 and could expand to $46.62 trillion by 2034, representing a 28% CAGR. Asia Pacific accounted for 46.1% of the market in 2025. Meanwhile, tap-to-phone technology is turning smartphones into payment terminals, lowering acceptance costs for merchants
Competition is intensifying as companies such as Visa Inc. (V - Free Report) , Block, Inc. (XYZ - Free Report) , Klarna Group plc (KLAR - Free Report) and Green Dot Corporation (GDOT - Free Report) broaden their payment ecosystems through innovation and strategic partnerships. At the same time, regulatory initiatives including FedNow in the United States, Europe's PSD2 framework and India's UPI are strengthening trust, security and adoption. Our Mobile Payments Screen highlights the companies best positioned to benefit.
Ready to uncover more transformative thematic investment ideas? Explore 37 cutting-edge investment themes with Zacks Thematic Investment Screens and discover your next big opportunity.
4 Mobile Payments Stocks to BuyBlock has built one of the industry's most comprehensive mobile payments ecosystems, serving both consumers and merchants through Cash App, Square and Afterpay. Cash App enables peer-to-peer transfers, digital wallet payments, direct deposits, bill payments and Cash App Pay, while Square provides merchants with mobile point-of-sale (mPOS) solutions, tap-to-pay acceptance and omnichannel payment processing. Together, these platforms create an integrated ecosystem that connects consumers and businesses across online, in-store and mobile transactions.
The company continues to enhance its mobile payments offering through product innovation. During the first quarter of 2026, Block expanded Afterpay's Buy Now, Pay Later (BNPL) capabilities across Cash App Card purchases, Cash App Pay and peer-to-peer transactions, allowing consumers greater payment flexibility. Square also introduced new hardware and software enhancements for merchants, while AI-powered features such as Moneybot were added to improve customer engagement and simplify financial management. These initiatives strengthen the company's ecosystem and encourage higher transaction activity across its platforms.
Operational momentum remains strong. In the first quarter of 2026, Square’s Gross Payment Volume (GPV) increased 13% year over year to $61.2 billion, while Cash App monthly transacting actives reached 59 million. The company generated $2.91 billion in gross profit, up 27% from the prior-year quarter, reflecting healthy growth across both its consumer and merchant businesses.
As mobile-first payments gain traction worldwide, Block's unified platform of digital wallets, merchant acceptance, BNPL and mobile commerce positions it to capture long-term growth. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Green Dot delivers mobile payment capabilities through its digital banking platform and embedded finance infrastructure, enabling consumers and businesses to make, receive and manage payments through mobile channels. Its banking app allows users to transfer funds, deposit checks remotely, pay bills, monitor accounts and receive real-time alerts. Green Dot’s debit cards also integrate with major digital wallets, including Apple Pay, Google Pay and Samsung Wallet, enabling secure contactless payments in stores and online.
Beyond consumer banking, Green Dot plays an important role in embedded finance through its Banking-as-a-Service (BaaS) platform. Its APIs allow fintechs and enterprise partners to integrate mobile banking, account issuance, debit cards and payment capabilities directly into their own applications. The company also supports peer-to-peer transfers and provides access to one of the largest retail cash networks in the United States, allowing customers to seamlessly move between cash and digital payments.
Green Dot’s mobile payments ecosystem continues to generate healthy transaction activity. In first-quarter 2026, Gross Dollar Volume (GDV) increased 9% year over year to $40.6 billion, driven by strong momentum in its B2B Services business, where GDV grew 14%. The company also maintained approximately 3.5 million active accounts, highlighting resilient customer engagement.
As more fintechs and digital platforms outsource banking infrastructure, Green Dot stands to benefit from higher transaction activity without relying solely on direct customer acquisition. It also currently sports a Zacks Rank #1.
Visa plays a foundational role in the mobile payments ecosystem by providing the global payment network that powers digital transactions rather than operating a consumer-facing wallet. Every time a consumer pays through Apple Pay, Google Pay, Samsung Wallet or a Visa-enabled banking app, Visa authorizes, routes, clears and settles transactions through its network, while its Visa Token Service replaces card credentials with secure digital tokens to improve security and reduce fraud.
The company continues to strengthen its mobile payments capabilities through innovation. A recent addition is Tap to Pay on iPhone via the Visa Acceptance Platform, allowing merchants to accept contactless payments directly on an iPhone without requiring dedicated card readers. Visa also recently introduced Visa Pass Key in India, enabling consumers to authenticate online card payments using biometric verification or device credentials instead of one-time passwords, creating a faster and more secure checkout experience.
Visa’s scale continues to drive strong operating performance. In the second quarter of fiscal 2026, net revenues increased 17% year over year to $11.2 billion. Payments volume grew 8%, cross-border volume advanced 13% on a constant-dollar basis, and processed transactions rose 11%, reflecting healthy consumer spending and continued migration toward digital payments.
By combining global acceptance, tokenization, fraud prevention and merchant payment innovation, Visa remains one of the largest beneficiaries of the shift toward mobile-first and contactless commerce. It carries a Zacks Rank #2 (Buy) at present.
Klarna has evolved into a comprehensive mobile payments platform that extends well beyond its BNPL roots. Through the Klarna app, consumers can shop online and in stores, make one-time or installment payments, manage purchases, track deliveries and access flexible financing from a single mobile interface. The platform also supports payments through Apple Pay and Google Pay, enabling consumers to use Klarna seamlessly across digital and physical commerce.
Klarna continues to broaden its payments ecosystem with products designed to increase everyday spending. Its expanding portfolio now includes debit card offerings, pay-in-full options and AI-powered shopping features that personalize recommendations and simplify the checkout experience. By combining payments, shopping discovery and financial management into one app, Klarna is driving higher engagement while giving merchants additional tools to improve conversion rates and customer loyalty.
The company's operating momentum remains strong. In the first quarter of 2026, Gross Merchandise Volume (GMV) climbed 33% year over year to $33.7 billion, while revenues increased 44% to $1.01 billion. Active consumers reached 119 million, up 21%, and the merchant network expanded to more than 1.07 million, a 49% increase from a year earlier.
As Klarna expands from a BNPL provider into a broader mobile commerce platform, its growing consumer ecosystem and rapidly expanding merchant network are creating multiple avenues for sustained payment volume growth. It also carries a Zacks Rank #2 at present.
STAMFORD, Conn.--(BUSINESS WIRE)---- $III #AI--Enterprises are increasingly using the Snowflake data platform to coordinate secure data access, collaboration and AI-enabled operations, ISG says.
Snowflake Inc. (SNOW - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this company have returned +9%, compared to the Zacks S&P 500 composite's +2.1% change. During this period, the Zacks Internet - Software industry, which Snowflake falls in, has gained 2.3%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Snowflake is expected to post earnings of $0.45 per share, indicating a change of +28.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +1% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $1.96 points to a change of +56.8% from the prior year. Over the last 30 days, this estimate has changed +2.1%.
For the next fiscal year, the consensus earnings estimate of $2.6 indicates a change of +32.9% from what Snowflake is expected to report a year ago. Over the past month, the estimate has remained unchanged.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Snowflake.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Snowflake, the consensus sales estimate of $1.47 billion for the current quarter points to a year-over-year change of +28.4%. The $6.07 billion and $7.55 billion estimates for the current and next fiscal years indicate changes of +29.6% and +24.4%, respectively.
Last Reported Results and Surprise HistorySnowflake reported revenues of $1.39 billion in the last reported quarter, representing a year-over-year change of +33.5%. EPS of $0.39 for the same period compares with $0.24 a year ago.
Compared to the Zacks Consensus Estimate of $1.32 billion, the reported revenues represent a surprise of +5.23%. The EPS surprise was +21.88%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Snowflake is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Snowflake. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Snowflake’s title bet references an $80 billion data opportunity, but the number in the Q1 FY27 filing that actually validates the thesis is the size of the contracted backlog. That contracted figure is what long-term holders should anchor on.
The Number Snowflake (NYSE:SNOW | SNOW Price Prediction) closed Q1 FY27 with $9.21 billion in remaining performance obligations, up 38% year over year. The company reported the figure on May 27, 2026. RPO represents contracted business Snowflake has booked with customers but has not yet recognized as revenue. This figure grew faster than the 33.48% quarterly revenue increase, which is the tell.
What It Means RPO is the backlog. When this number accelerates past revenue growth, customers are signing longer, larger contracts. Product revenue for the quarter came in at $1.33 billion, up 34% year over year, which management described as the strongest sequential dollar growth in the company’s history. Net revenue retention held at 126%, meaning existing customers spent 26% more than a year ago.
Perhaps more important is the count of customers generating more than $1 million in trailing product revenue. This figure reached 779 this past quarter (up 29% YoY), with Snowflake adding 616 net new customers (up 38% YoY), and showcasing 13,600+ accounts are now using Snowflake AI capabilities.
Market Reaction Shares closed at $260.15 on July 2, 2026, up 18.6% year to date from a start of $219.36 on December 31, 2025. On a one-week view, SNOW rose 14.57%, moving from $227.06 on June 25, 2026 to $260.15 on July 2, 2026. On the one-year view, the stock is up 19.7% from $217.34 on July 2, 2025. Following the Q1 earnings report, shares moved from $177.4949 at filing to $255.55 one day after.
Bull Case The $9.21 billion backlog is the foundation. Management raised full-year FY27 product revenue guidance to $5.84 billion, implying 31% growth, up from prior guidance of $5.66 billion at 27%. Non-GAAP operating margin guidance rose to 13.5%, from 12.5%, and non-GAAP adjusted free cash flow margin is guided at 23.0%. Q2 FY27 product revenue is guided to $1,415 million to $1,420 million, or 30% growth.
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AI adoption is doing the work behind those raises. Cortex Code is now inside 7,100+ accounts, and Snowflake Intelligence accounts more than doubled quarter over quarter. Some of Snowflake’s strategic moves included a $6 billion multi-year AWS agreement, a deepened OpenAI partnership, general availability of SAP partnership capabilities, and the acquisition of Natoma, an enterprise Model Context Protocol platform for AI agents.
CEO Sridhar Ramaswamy called Q1 “a milestone quarter” and framed the company’s AI product suite as the company becoming “the control plane for the Agentic Enterprise.” Non-GAAP EPS came in at $0.39 versus a $0.3198 estimate, a 21.95% beat, the fourth consecutive quarter of beating consensus. Free cash flow reached $232.77 million, up 26.93% YoY, and Snowflake repurchased $300.03 million of its own stock in the quarter. TD Cowen reiterated a Buy rating with a $300 price target on June 2, 2026.
Bottom Line For retirement-focused holders, RPO growing faster than revenue is the metric that matters most. It signals longer contract durations and stronger customer conviction, and it gives management visibility to keep raising guidance.
The AI attach rate across 13,600+ accounts is converting into contracted dollars on the balance sheet. Shares have already caught a bid, up 18.6% year to date, but Snowflake’s backlog compounds independent of any single quarter’s headlines. The next catalyst is the Q2 FY27 report, and the number to keep an eye on is whether RPO growth stays ahead of product revenue growth. If it does, the raised full-year outlook is unlikely to be the last one this fiscal year.
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Costco (COST - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this warehouse club operator have returned -2.5%, compared to the Zacks S&P 500 composite's +2.1% change. During this period, the Zacks Retail - Discount Stores industry, which Costco falls in, has lost 2.4%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Costco is expected to post earnings of $6.49 per share for the current quarter, representing a year-over-year change of +10.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The consensus earnings estimate of $20.38 for the current fiscal year indicates a year-over-year change of +13.3%. This estimate has remained unchanged over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $22.46 indicates a change of +10.2% from what Costco is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Costco is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Costco, the consensus sales estimate for the current quarter of $94.04 billion indicates a year-over-year change of +9.2%. For the current and next fiscal years, $301.5 billion and $325.22 billion estimates indicate +9.5% and +7.9% changes, respectively.
Last Reported Results and Surprise HistoryCostco reported revenues of $70.53 billion in the last reported quarter, representing a year-over-year change of +11.6%. EPS of $4.93 for the same period compares with $4.28 a year ago.
Compared to the Zacks Consensus Estimate of $69.5 billion, the reported revenues represent a surprise of +1.47%. The EPS surprise was +0.41%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates two times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Costco is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Costco. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Costco (COST - Free Report) .
Costco currently has an average brokerage recommendation (ABR) of 1.82, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 36 brokerage firms. An ABR of 1.82 approximates between Strong Buy and Buy.
Of the 36 recommendations that derive the current ABR, 20 are Strong Buy and four are Buy. Strong Buy and Buy respectively account for 55.6% and 11.1% of all recommendations.
Brokerage Recommendation Trends for COST
Check price target & stock forecast for Costco here>>>
While the ABR calls for buying Costco, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Should You Invest in COST?Looking at the earnings estimate revisions for Costco, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $20.38.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Costco. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Costco.
$275.24 billion. That is what Costco (NASDAQ:COST | COST Price Prediction) rang up in revenue for fiscal year 2025, representing a +8.17% year-over-year haul that pushed the warehouse operator past a quarter-trillion dollars in annual sales. The company followed this impressive report with a Q3 FY2026 quarter that showed this growth machine is still accelerating in the right direction, posting $70.53 billion in revenue, up 11.58% year over year.
What It Means A quarter-trillion-dollar retailer that keeps compounding sales at a double-digit clip is a rare animal. Costco is making this happen, while continuing to open physical stores. Management ended Q3 with 931 warehouses across 14 countries and told investors it now targets “30-plus net new openings per year in the coming years”, with roughly 12 new warehouses still scheduled for the remainder of FY2026.
The company’s membership model is what makes Costco’s top line so durable. Membership fees hit $1.37 billion in the quarter, up 10.7% year over year, on a 89.7% worldwide renewal rate and 82.9 million paid members. Executive memberships now account for 75.0% of net sales. Additionally, comparable sales rose 9.8% (6.6% adjusted for gas and FX), with digitally enabled comps up 21.5% and e-commerce site and app traffic up 37%.
Profitability is scaling with the company’s top line. FY2025 net income reached $8.099 billion (+9.94%), operating cash flow rose to $13.335 billion (+17.6%), and free cash flow expanded 18.22% to $7.837 billion. Q3 FY2026 net income came in at $2.19 billion, up 15.19%, on $4.93 diluted EPS that edged the $4.923 consensus.
Bull Case I think Costco’s bull case rests on three data points that keep pointing the same direction.
First, membership economics. A 89.7% worldwide renewal rate paired with 92.2% in the U.S. and Canada means members overwhelmingly keep paying to shop. Executive memberships grew 9.6% year over year to 41.2 million, and CFO Gary Millerchip told the call the company is “seeing increases in membership upgrades from gold to executive”. That is recurring, high-margin income that flows straight through to the company’s bottom line.
Second, unit growth. Costco’s 30-plus net new openings per year cadence, backed by approximately $6.5 billion in FY26 capital expenditure, gives investors a physical, measurable growth lever. CEO Ron Vachris described a runway that stretches well beyond North America, with “very strong international expansion over the next five to ten years” across Canada, China, Korea, Japan, France, Spain, and the U.K.
Third, balance sheet and digital flywheel. Cash and equivalents jumped 36.93% year over year to $18.95 billion, and shareholders’ equity climbed 23.54% to $33.51 billion. Importantly, the company’s digital segment is compounding on top of the physical footprint. In fact, digitally-enabled comps were up 21.5%, same-day delivery averaging under 45 minutes in the U.S. with a 4.8 out of 5 satisfaction rating, and triple-digit growth in AI-search-driven traffic with the highest conversion rate of any channel.
Even the macro cross-currents work in Costco’s favor. Consumer sentiment sits at a 44.8 reading, well below the 60 recessionary threshold, yet May 2026 total PCE reached $22,059.8 billion, with food spending at $1,566.8 billion versus $1,518.3 billion a year earlier. Nervous households trade down to value, and Costco is the value.
Bottom Line A retailer that clears $275.235 billion in annual revenue while still growing comps 9.8%, adding 30-plus warehouses per year, and renewing members at 89.7% is compounding on multiple axes at once.
Long-term holders should watch three data points from here: the pace of the remaining 12 FY2026 warehouse openings toward the 940 target, the trajectory of executive membership penetration above 75.0% of net sales, and any decision on the special dividend that Millerchip described as “typically the most effective way to return excess cash”. The quarter-trillion-dollar strategy is still adding warehouses, members, and cash faster than it is spending them.
Shares of First Solar Inc (NASDAQ:FSLR) are 0.7% higher to trade at $234.73, after landing an upgrade at Deutsche Bank to "buy" from "neutral" and price-target hike to $272 from $245. The brokerage cited trade policy shifts and valuation as two catalysts for the move.
FSLR has pulled back since its June 3 record high of $320.95, down 10% year to date. The $220 region has stepped up as support since mid-May, while the 260-day moving average captured Monday's pullback to this area.
The firm is joining the bullish majority, with 27 of the 42 analysts in coverage sporting a "buy" or "strong buy" recommendation. The average 12-month price target comes in at $251.96, a 7.7% premium to current trading levels.
Bulls have been circling FSLR, per its 50-day call/put volume ratio of 2.19 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks in the 80th percentile of its annual range, indicating a higher-than-usual preference for bullish bets of late.
However, over the past 10 days of trading the weekly 6/26 240-strike put and weekly 7/10 230-strike put saw the most attention. Both positions held plenty of buying activity, while the weekly 6/26 290-strike call also made some noise.
Meanwhile, short interest represents 8.4% of the stock's available float. It would take shorts over three days to buy back their bearish bets.
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: CF Industries (CF - Free Report) CF Industries Holdings, Inc., headquartered in Deerfield, IL, is one of the largest manufacturers and distributors of nitrogenous fertilizer and other nitrogen products globally. The company’s principal nitrogenous fertilizer products are ammonia, granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN).
CF is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. CF has a Growth Style Score of B, forecasting year-over-year earnings growth of 83.1% for the current fiscal year.
For fiscal 2026, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $3.77 to $17.16 per share. CF boasts an average earnings surprise of +11.4%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CF should be on investors' short list.
Key Takeaways AbbVie won EU approval for Tepkinly R2 in adult patients with R/R FL after prior therapy.ABBV's phase III study showed a 79% lower risk of progression or death versus R2 alone, with higher responses.AbbVie and Genmab continue to advance epcoritamab across blood cancers through late-stage clinical studies. AbbVie (ABBV - Free Report) announced that the European Commission (EC) approved the expanded use of Tepkinly (epcoritamab) for the relapsed or refractory follicular lymphoma (R/R FL) indication. The EC approved the drug in combination with rituximab and lenalidomide (Tepkinly+R2) for adult patients with R/R FL after at least one line of systemic therapy.
The approval represents Tepkinly's third indication in the European Union (EU) and marks the first EU approval of a bispecific-based, chemotherapy-free therapy for second-line relapsed or refractory follicular lymphoma.
To remind investors, ABBV markets epcoritamab under the brand name Epkinly in the United States and Japan, and as Tepkinly in the EU.
Tepkinly is already approved as monotherapy for adults with relapsed or refractory diffuse large B-cell lymphoma and R/R FL after two or more lines of systemic therapy in the EU.
The FDA approved Epkinly in combination with rituximab and lenalidomide for a similar indication in the United States in November 2025.
Year to date, ABBV shares have rallied 11.5% compared with the industry’s 13.8% growth.
Image Source: Zacks Investment Research
ABBV's Tepkinly Combo EU Nod Backed by Phase III StudyThe EU approval is based on data from the pivotal phase III EPCORE FL-1 study, which demonstrated that Tepkinly+R2 significantly improved outcomes compared to the standard-of-care R2 alone in second-line patients with R/R FL. The combination reduced the risks of disease progression or death by 79% and achieved higher overall and complete response rates versus R2 alone. Its safety profile was consistent with the known profiles of the previous individual therapies, with no new safety signals identified.
The most common adverse events included neutropenia, rash, infections, fatigue, diarrhea, COVID-19 and cytokine release syndrome, while serious adverse events occurred in 44% of patients.
Follicular lymphoma is a slow-growing type of B-cell non-Hodgkin lymphoma and the second most common subtype of the disease. Although treatment can induce remission, FL remains incurable, with many patients experiencing relapses and requiring additional therapies over time. The disease is more prevalent in European populations than in non-European populations.
AbbVie has partnered with Genmab (GMAB - Free Report) to jointly develop epcoritamab under the companies' oncology collaboration agreement. While both companies share commercialization rights in the United States and Japan, AbbVie is responsible for commercialization in other global markets. AbbVie and Genmab continue to advance their global development and regulatory expansion while evaluating the therapy as a monotherapy and in combination regimens across multiple hematologic malignancies through several late-stage clinical studies.
ABBV’s Zacks Rank & Stocks to ConsiderAbbVie currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Immunocore (IMCR - Free Report) and Amarin Corporation (AMRN - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, estimates for Immunocore’s 2026 bottom line have improved from a loss per share of 88 cents to earnings of 6 cents per share. Over the same period, EPS estimates for 2027 have risen from 24 cents to 87 cents. IMCR shares have lost 8% year to date.
Immunocore’s earnings beat estimates in three of the trailing four quarters and missed in the remaining one, the average surprise being 46.66%.
Over the past 60 days, loss per share estimates for Amarin have narrowed from $15.20 to 65 cents for 2026. Over the same period, estimates for loss per share have also narrowed from $13.00 to 51 cents for 2027. AMRN shares have risen 12.5% year to date.
Amarin’s earnings beat estimates in three of the trailing four quarters and missed in the remaining one, the average surprise being 50.02%.
, /PRNewswire/ -- Duke Energy will post its second-quarter 2026 financial results at 7 a.m. ET on Tuesday, Aug. 4, on the company's website at duke-energy.com/investors.
An earnings conference call for analysts is scheduled at 10 a.m. ET that day to discuss the second-quarter 2026 results and other business and financial updates.
The conference call will be hosted by Harry Sideris, president and chief executive officer, and Brian Savoy, executive vice president and chief financial officer.
The call can be accessed via the investors' section (duke-energy.com/investors) of Duke Energy's website or by dialing 585.542.9983 in the U.S. or 833.461.5787 outside the U.S. The confirmation code is 485914666. Please call in 10 to 15 minutes prior to the scheduled start time.
A recording of the webcast will be available on the investors' section of the company's website on Aug. 5.
Duke Energy
Duke Energy (NYSE: DUK), a Fortune 150 company headquartered in Charlotte, N.C., is one of America's largest energy holding companies. The company's electric utilities serve 8.7 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and collectively own 55,700 megawatts of energy capacity. Its natural gas utilities serve 1.6 million customers in North Carolina, South Carolina, Ohio and Kentucky.
Duke Energy is executing an energy modernization strategy, keeping customer value at the forefront as it invests in electric grid upgrades and efficient generation resources to strengthen the system and serve growing energy needs.
More information is available at duke-energy.com. Follow Duke Energy on X, LinkedIn, Instagram, TikTok and Facebook for stories about the people and innovations powering its communities.
Media Contact: Gillian Moore
24-hour: 800.559.3853
Analyst Contact: Mike Switzer
Office: 704.382.6473
Coca-Cola (NYSE:KO | KO Price Prediction) is the defensive name every retirement account seems to want to own right now, rallying 20.26% year to date on consistent earnings beats and a flight to quality inside consumer staples. Yet the multiple has run ahead of the fundamentals, and there is a better regulated alternative hiding in plain sight.
Coca-Cola Is Steady Shares closed at $82.96, sitting right against a 52-week high of $84.54. That leaves Coca-Cola trading at roughly 26 times forward earnings with a dividend yield of only 2.53%, well beneath the 4.49% yield on a 10-year Treasury. For that premium multiple, holders are underwriting management guidance of 4% to 5% organic revenue growth and 8% to 9% comparable EPS growth in 2026, a story further complicated by a 4% headwind from divestitures, unresolved IRS tax litigation, and a $960 million BODYARMOR impairment in Q4 2025.
The 63-year dividend streak is impressive. So is the fact that the stock is priced like the next decade will look exactly like the last one. When a defensive name yields less than cash and trades at a growth multiple, the margin of safety is gone.
Why Duke Energy Is The Better Retirement Trade Duke Energy (NYSE:DUK) trades at 19 times earnings with a 3.3% dividend yield, up a comparatively modest 9.63% year to date. This is the setup a seasoned income investor wants: a regulated cash machine the crowd has not chased yet. Three specific reasons to redirect the defensive allocation here.
1. Contracted growth locked in through 2030. Duke’s $103 billion five-year capital plan is the largest regulated capital plan in the industry, driving 9.6% earnings base growth through 2030. Management guides to 5% to 7% EPS growth through 2030 and expects to earn in the top half of that range beginning in 2028. That growth flows through rate base expansion, not global case volumes or currency swings.
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2. The AI data center tailwind is already contracted. Duke has secured 7.6 GW of economic development projects under Electric Service Agreements. Its Sun-belt regulated footprint across the Carolinas, Florida, Indiana, Ohio, and Kentucky sits in the heart of the U.S. data center corridor. CEO Harry Sideris explicitly credits “contracted demand from AI and advanced manufacturing” as a structural driver of the 2026 outlook, and management is doing this while keeping rates below the national average and rate changes below inflation.
3. Four straight beats and a widening dividend. Duke has delivered four consecutive quarters of EPS beats. Q1 2026 adjusted EPS came in at $1.93 versus a $1.80 estimate, a 7.51% beat, on revenue of $9.18 billion that grew 11.3% year over year. The annualized dividend has climbed from $3.24 in 2015 to $4.24 in 2025, and the 2026 quarterly payout was raised to $1.065. Sell-side price targets sit at $138.56, above the current $125.97 quote, while Coca-Cola trades near its consensus target of $85.97.
Retirement investors have been trained to reach for Coca-Cola every time the market gets nervous. This cycle, the crowd has already made that trade, and the multiple shows it. For income-focused investors comparing the two, Duke Energy offers the more compelling risk/reward on current metrics.
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Palantir Technologies Inc. (PLTR - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this company have returned -2.9%, compared to the Zacks S&P 500 composite's +2.1% change. During this period, the Zacks Internet - Software industry, which Palantir Technologies falls in, has gained 2.3%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Palantir Technologies is expected to post earnings of $0.35 per share for the current quarter, representing a year-over-year change of +118.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
For the current fiscal year, the consensus earnings estimate of $1.48 points to a change of +97.3% from the prior year. Over the last 30 days, this estimate has changed -0.7%.
For the next fiscal year, the consensus earnings estimate of $2.06 indicates a change of +38.9% from what Palantir Technologies is expected to report a year ago. Over the past month, the estimate has changed -2%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Palantir Technologies is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Palantir Technologies, the consensus sales estimate of $1.81 billion for the current quarter points to a year-over-year change of +80%. The $7.69 billion and $10.9 billion estimates for the current and next fiscal years indicate changes of +71.9% and +41.7%, respectively.
Last Reported Results and Surprise HistoryPalantir Technologies reported revenues of $1.63 billion in the last reported quarter, representing a year-over-year change of +84.7%. EPS of $0.33 for the same period compares with $0.13 a year ago.
Compared to the Zacks Consensus Estimate of $1.54 billion, the reported revenues represent a surprise of +6.04%. The EPS surprise was +13.79%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Palantir Technologies is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Palantir Technologies. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Palantir (NASDAQ:PLTR | PLTR Price Prediction) is one of the most-watched tech stocks in the market, and for good reason. The big data and software giant, known for its intelligence platforms used by government entities and a range of corporate big data software platforms has been on a bumpy ride over the past year, actually down 2% over the past 12 months at the time of writing.
That said, this is also a company that’s up more than 400% over the past year, suggesting that investors in the AI company continue to be very bullish on its long-term prospects.
That said, one of the most interesting facets of this recent rise in Palantir is the company’s CEO Alex Karp’s warning is less about AI’s long-term promise and more about how frontier-model companies are monetizing it today. In a CNBC “Squawk Box” interview on July 1, Karp said, “I’m not throwing shade at them, but something has gone completely wrong,” while criticizing the token-based pricing model used by OpenAI and Anthropic. He argued that enterprise customers are paying for tokens that “create no value,” and that many businesses feel the AI stack is being sold in a way that does not justify the bill.
Let’s dive into this announcement, and what it may portend for investors in the AI and big data giant.
What to Make Of These Comments I think Karp’s broader point was that the AI industry has become obsessed with consumption rather than outcomes. He described the typical enterprise mindset as one of resignation. That is, companies will burn through tokens, accept rising costs, and potentially hand over valuable IP without seeing a meaningful return.
I think the other thing that’s important to point out is that Karp is essentially saying this is a systemic problem. In other words, this isn’t a company-specific issue in any way.
In my view, this is an important distinction. Karp was not simply taking a swipe at Sam Altman or Dario Amodei. Rather, he was arguing that the current commercial structure of AI is misaligned with what buyers actually want. In his view (and mine for that matter), enterprises are not eager to rent intelligence by the token if the payoff is uncertain and the data exposure is high.
However, given the recent news around Meta’s potential offloading of its “excess capacity,” maybe there’s another narrative to pursue. I’m not going to get into that in great detail here, but there are question marks on both sides of this argument.
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Why It Matters For investors, I think this quote matters because it points to a real tension inside the AI boom. That is, usage growth does not automatically equal durable profit pools.
In other words, if enterprise customers keep pressuring OpenAI, Anthropic, and other model providers on price, the market may need to rethink how much long-term margin power these firms really have. Karp’s remarks also line up with a broader industry shift toward model routing, open models, and cheaper inference options, all of which could compress pricing over time.
There is also a second layer here. Karp’s criticism supports Palantir’s own strategic pitch. If the company can keep sensitive data inside the customer perimeter and run AI in a more controlled, enterprise-friendly environment, the company may be able to better position its products. For investors, the key message that’s becoming apparent to me is that Palantir wants to be viewed as the safer, more operationally-useful layer in AI, not just another model seller.
Is Palantir a Buy Or Not? In my view, Palantir’s recent decline speaks to the lack of ultra-bullish sentiment in the market more than anything. Right now, there’s a glut of capacity about to hit the market, if companies like Meta choose to offload what they view as too much computing power. For companies that thrive on ever-increasing prices for data and analytics such as Palantir, that’s not good news.
That’s not to say the AI revolution isn’t real – I think it’s very real. However, the reality is that token-based pricing models may come under pressure, with customers eventually hitting the pause button if prices rise beyond a certain level.
What that level is exactly is very difficult to parse out. But for companies that are in the infrastructure, workflow, security and deployment areas of the market, it may be a better environment in a few years compared to companies operating on the cutting edge of developing frontier models.
We’ll have to see what this ultimately means for Palantir stock moving forward. Personally, I think this stock still looks expensive even after coming back down to earth a bit, but that’s just me. These comments certainly don’t support a bullish near-term market-wide view of the AI buildout, at least in my view.
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Over the past few years, there have been few better artificial intelligence (AI) stocks to own than Palantir Technologies (PLTR +2.24%). Microsoft (MSFT +1.65%) was also a popular pick, although its upside was limited by its size.
Still, if you had all of your money in these two stocks at the start of 2023 through 2025, you're a happy investor. But if you bought shares of each of these stocks at the start of 2026, you're quite frustrated.
For 2026, these two are down 20% (Microsoft) and 31% (Palantir) year to date. Plus, they each just hit 52-week lows. The question is, is this a real sell-off that's warranted, or is it a phenomenal buying opportunity?
I believe it's a great buying opportunity for one of these stocks, while the other could have more room to tumble. Which one is the best buy? Let's find out.
Image source: Getty Images.
Microsoft and Palantir are both going all-in on AI Microsoft's legendary business spans many industries, but it's taking steps to ensure that all its products have an AI-first mindset. It did that with its business productivity software by rolling out Copilot, its generative AI assistant, powered by OpenAI's ChatGPT. This business has done incredibly well, with revenue rising 123% year over year to $37 billion in annual recurring revenue.
It also has one of the most popular cloud computing platforms, with Azure's revenue rising 40% in its most recent quarter. Microsoft also owns around 27% of OpenAI, so when that company eventually goes public (likely at a $1 trillion valuation or greater), Microsoft is set to for a huge payday.
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Palantir is even more focused on AI, as it has been since its founding. The company's platform was originally intended solely for government clients and utilized AI for data analytics. Eventually, this software made its way to the public side and became a huge hit there as well. Palantir is nearing a 50-50 split for government and commercial revenue, and each customer remains strong.
The biggest kick-start in recent quarters has been AIP, Palantir's generative AI platform that automates workflows for users. This has become an incredibly popular tool, and it's the main reason why the company's revenue rose 85% year over year during its most recent quarter.
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Both businesses are clearly doing well, so it's hard to find fault with them. However, one winner emerges when valuations are examined.
Palantir's stock is quite pricey Both Palantir and Microsoft are highly profitable businesses growing at a healthy pace, so valuing their stocks based on the forward price-to-earnings ratio is a smart idea. A good baseline for these valuations is the S&P 500, which trades for 21.5 times forward earnings.
At 20 times forward earnings, Microsoft trades at a discount despite growing at a market-beating pace and being a strong company overall.
PLTR PE Ratio (Forward) data by YCharts
However, there's an elephant in the room: Palantir's valuation. At 85 times forward earnings, Palantir must quadruple its earnings beyond 2026's projected growth to be at the same level as the S&P 500. That's a ton of growth that may take some time to pan out, and investors may not be willing to wait that long, especially if there are other, well-priced options available like Microsoft.
Palantir is an excellent company with great growth prospects, but it's just far too expensive to own right now. Meanwhile, Microsoft looks like a timely buy, as it rarely gets this cheap.
I believe Microsoft will thrive throughout the second half of 2026, while Palantir could continue to tumble. Even in 2027, I'm still far more bullish on Microsoft than Palantir, primarily because the sky-high expectations priced into Palantir's stock make it hard to see the upside.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of PLTR, NVDA 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.
SAN FRANCISCO--(BUSINESS WIRE)--Lyft, Inc. (Nasdaq: LYFT) is welcoming Senthil Padmanabhan as Chief Technology Officer, joining July 20, 2026, reporting to CEO David Risher. With decades of experience, Senthil is the rare technical leader who operates at every altitude: going deep on the most complex problems, driving company-wide change at a global scale, and bringing the team with him every step of the way. Most recently as VP of Engineering at eBay, where he first earned recognition as a Tec.
Key Takeaways Etsy is expanding AI listing assistance and shop tools to automate tasks and improve seller decisions.Active sellers rose 3.3% year over year to 5.6 million in the first quarter.Etsy shares jumped 39.1% in three months, outpacing the industry's 5.1% rise. Etsy, Inc. (ETSY - Free Report) is placing renewed emphasis on improving the seller experience, recognizing that marketplace growth depends in part on helping merchants spend less time on manual tasks and more time creating products that attract buyers. After several years of limited investment in seller-facing capabilities, management is shifting more focus toward tools that simplify listing creation and shop management. The objective is straightforward. Reduce friction for sellers so they can spend more time creating and connecting with buyers, and improving the quality of inventory on the platform.
Etsy is expanding AI-powered listing assistance and introducing shop management tools that help sellers make better decisions, access relevant resources and automate routine tasks. During the first quarter of 2026, the company also developed a seller-focused AI Shop Assistant designed to provide actionable insights while reducing operational complexity. Management noted that these tools are intended to remove time-consuming activities that add little value, allowing sellers to devote greater attention to product innovation and customer relationships.
The early impact is beginning to appear in marketplace metrics. Active sellers increased year over year for the first time since Etsy introduced its seller setup fee, while management highlighted improving seller retention and healthier seller quality as more merchants completed sales and remained active on the platform. Active sellers grew 3.3% year over year to 5.6 million during the first quarter.
Management believes better seller tools will reinforce this trend by making it easier to operate successful shops and consistently introduce fresh inventory. This matters because Etsy’s growth depends on the quality and freshness of what sellers bring to the platform. If new tools help sellers list products faster and manage shops with less friction, Etsy could improve its inventory depth without relying solely on buyer-side initiatives.
How eBay & Shopify Compare With EtsyeBay Inc. (EBAY - Free Report) is also investing heavily in seller productivity, but with a stronger emphasis on reducing selling friction to expand supply. During the first quarter of 2026, eBay highlighted that its latest AI-powered magical listing experience significantly simplified listing creation by automatically generating titles, categories, pricing guidance and item specifics. eBay said the rollout increased new listing creation, improved seller retention, and lifted sold items and GMV per lister. Beyond AI, eBay continues to streamline consumer selling experiences and remove friction across key markets, reinforcing its seller-to-buyer flywheel and supporting long-term marketplace growth.
Shopify Inc. (SHOP - Free Report) is approaching the same opportunity through merchant enablement rather than marketplace optimization. Shopify expanded AI capabilities with Sidekick, which helps merchants automate tasks, create custom apps, generate workflows and proactively recommends actions through Pulse. Shopify also emphasized that AI-powered commerce tools, its structured product catalog and growing discovery channels are designed to help merchants operate more efficiently while reaching more buyers. As Shopify continues investing in merchant-facing AI and automation, it aims to strengthen merchant success and support durable platform growth over time.
What the Latest Metrics Say About EtsyEtsy has seen its shares jump 39.1% over the past three months compared with the industry’s 5.1% rise.
Image Source: Zacks Investment Research
From a valuation standpoint, Etsy's forward 12-month price-to-earnings ratio stands at 12.81, lower than the industry’s ratio of 21.40. ETSY is also trading below its 12-month median level of 20.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Etsy's earnings per share has seen a downward revision. The consensus estimate for the current fiscal year has fallen from $5.55 to $5.41, while the estimate for the next fiscal year has declined from $6.40 to 6.29 over the past seven days.
Image Source: Zacks Investment Research
Etsy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Micron Technology (MU 6.40%) has had a phenomenal 2026 so far, rising around 240%, though it was up around 300% until a few days ago before artificial intelligence (AI)-centric stocks started to sell off. Regardless, Micron has had a great run, and it isn't looking to slow down anytime soon.
Micron recently announced another jaw-dropping quarter with huge growth and incredible expectations for the following quarter, dropping huge news that tight market conditions could last until 2028. If that occurs, Micron's stock could be primed for a major run, potentially positioning it to become the next Nvidia (NVDA +0.48%).
But is that possible? Let's see what it would take.
Image source: Getty Images.
Nvidia will be tough to catch, but Micron is trying its hardest Micron fabricates both NAND and DRAM memory. NAND memory is used in long-term storage devices such as solid-state drives (SSDs). In contrast, DRAM is used for high-speed memory, as needed by Nvidia's GPUs to rapidly access information as it's processed.
There has been strong demand for both types of memory due to the massive data center build-out, but supply hasn't kept up with this unprecedented demand. As a result, prices for memory chips have skyrocketed, allowing Micron to profit from the shortage.
As mentioned, new capacity for many in this industry won't be online until 2027 or later, creating a low supply of inventory for at least the next year and a half. That could lead to even higher memory chip prices, as demand for these devices isn't slowing down.
Nvidia has a strong read on data center build-out plans, as many clients are placing orders for devices well in advance of when they need them so they can quickly get them online once the data center infrastructure is ready. While the AI hyperscalers plan to spend $650 billion on data center capital expenditures this year, next year that figure could be over $1 trillion. That will lead to even higher demand for memory chips, as well as for Nvidia GPUs.
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In Micron's latest quarter, DRAM accounted for around 76% of total sales, with NAND accounting for the rest. So, for Micron to surpass Nvidia, its NAND sales would need to rise much faster than DRAM, since DRAM will likely grow at a similar rate to GPU demand.
I don't see that happening, but that doesn't mean Micron won't be a great stock to own. Next quarter, it expects $50 billion in revenue, or about half of what Nvidia is expected to generate. Those are still impressive figures, and I won't be surprised to see Micron keep climbing the ladder toward Nvidia. However, it will likely never catch up, as Nvidia benefits from similar tailwinds to Micron.
But how close can it get?
Micron could be a much larger company by this time next year Because the memory chip market is cyclical, it is often difficult to assign it a regular valuation. This plays into the analysis, as Micron would fare far better if the market assigned it a normal premium. So, let's analyze Micron's stock in two ways. I'll assign it a 15x earnings premium and a 25x earnings premium to see what the range of outcomes could be.
Micron operates on a non-standard fiscal year calendar, and its FY 2026 ends in August. So, I'll utilize FY 2027 projections. Wall Street analysts project earnings per share (EPS) of $149.64 next year, with the highest estimate at $221.27. At the midpoint, Micron's stock would trade between $2,244 and $3,741 per share, depending on whether it trades at 15 to 25 times earnings.
That equates to a market capitalization of about $2.5 trillion to $4.2 trillion -- not far off from Nvidia's current $4.7 trillion. Now, if the earnings come in at the high end of the projection and the stock trades for 25 times earnings, Micron's stock could be valued at $6.2 trillion -- a greater figure than Nvidia.
However, this won't happen in a vacuum because Nvidia's stock will likely rise if Micron's does. I don't think Micron can catch Nvidia, but it still a great company to invest in.
Micron Technology (NASDAQ:MU | MU Price Prediction) has become the memory story of the AI cycle. Cloud Memory revenue hit $13.769 billion in fiscal Q3 2026 alone, and non-GAAP gross margin ballooned to 84.9%. CEO Sanjay Mehrotra called it plainly: “Micron’s record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era.”
Shares are up 241.97% year to date, yet the stock just pulled back sharply. So can MU push through to $1,500 in 2027? Let’s do the math.
Why Micron Shares Just Got Hit Despite Blowout Numbers The pullback is real. MU fell 19.61% in the past week and 8.32% over the past month, even as YTD gains sit near 242%.
Two headlines drove the reversal. Michael Burry disclosed a short at $1,051.87, arguing the rally reflects “AI hype and FOMO rather than fundamentals”. Wall Street veteran Jordi Visser flagged the sell-off as a warning of a “mid-cycle slowdown” in the AI trade.
Add a beta of 2.142 and an ongoing class-action lawsuit alleging price fixing, and volatility becomes the price of admission. This is a stock that moves twice as hard as the tape in both directions.
Wall Street Sees Big Upside. Our Model Sees Fair Value. Analysts are unusually aligned. The consensus target is $1,486, with 9 Strong Buys, 31 Buys, 4 Holds, and just 1 Strong Sell. Bullish sentiment sits at 89%. Our own base case lands at $979.86, essentially flat, with a bull case of $1,335.98 and bear case of $713.77. Confidence is 90%.
My take: analysts are closer to right than our conservative base. When earnings acceleration is this violent (345.72% revenue growth), a P/E model built on trailing numbers understates the earnings trajectory.
The Path to $1,500 Per Share Reaching $1,500 from today’s price of $975.56 would require a gain of 53.8%. With forward EPS of $64.97, a price of $1,500 implies a forward P/E of 23x. Our base case of $979.86 already implies 22x, meaning the bold target requires roughly 1.5x of additional multiple expansion.
That target is achievable if the AI capex build holds. Q4 26 guidance already calls for $50 billion in revenue and non-GAAP EPS of $31. Cloud Memory quadrupled from $5.284 billion in Q1 to $13.769 billion in Q3. Mehrotra says “multi-year Strategic Customer Agreements will significantly enhance the durability and predictability” of results.
HBM4 is in high-volume shipments, HBM4E is targeting calendar 2027 volume, and a $9 billion Japan expansion adds supply. Cramer captured the shift: “Micron’s Become a Secular Growth Story, Not a Cyclical Story.” The risk: memory has always been cyclical, and Burry is betting that history rhymes.
Where Micron Trades Today vs Its Earnings Power At $975.56, MU trades at roughly 15x forward EPS of $64.97. Alpha Vantage pegs the forward P/E even lower at 7x on updated estimates. Either way, that is cheap relative to peers in the AI supply chain.
Shares sit between a 52-week high of $1,255 and a low of $103.23. The 10-year return of 7,903.59% shows the payoff when memory cycles turn. This is a compounding story if pricing power holds.
Is $1,500 Realistic? My Verdict $1,500 by 2027 means a 53.8% gain and a 23.1x forward multiple. That is a stretch, but a reasonable one.
Three things need to go right: HBM4 pricing must hold through the ramp, Strategic Customer Agreements need to convert into visible FY27 revenue, and the AI capex cycle cannot roll over. A demand air pocket from hyperscalers would derail it fast. Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Micron could reach $1,500 in 2027.
WASHINGTON, DC - JULY 2: The Micron Technology logo is displayed at a booth at The Great American State Fair on the National Mall on July 2, 2026 in Washington, DC. (Photo by Kevin Carter/Getty Images)
Getty Images
This article was written by Doug Nathman, with research by his team at Trefis.
The company’s new long-term agreements aim to stabilize its volatile cycles, yet they may also place a limit on its historical profitability.
Following an increase of over 700% in the past year, it is reasonable to assert that Micron Technology (MU)’s shares are valued with high expectations. The company is seizing an unprecedented, AI-driven memory shortage, posting results that have exceeded both records and anticipations. Management has introduced a new strategy, a collection of long-term Strategic Customer Agreements (SCAs), intended to mitigate the pronounced cycles that have historically characterized this sector. However, embedded within this very solution is the potential for the stock’s most significant threat: the risk that Micron has exchanged future gains for the stability of the present.
Profitability Is Already At An Exceptional PeakTo begin with, consider the height. Micron’s net margin for the last twelve months is 41.5%, the highest it has reached in over five years and vastly different from its three-year average of 1.5%. Its operating margin presents a similar narrative at 48.4%, greatly surpassing its three-year average of 4.5%. For the forthcoming fourth quarter, the company has forecasted a gross margin of approximately 86.0%. These figures are considerable for a hardware enterprise, justifying a high valuation. The stock trades at a price-to-sales ratio of 22.4, well above its decade-high of 7.6. When performance metrics are so far removed from their historical averages, they have considerably more capacity to decline than to ascend. The market pricing reflects both present strong outcomes and the belief that this new profitability level is maintainable. Any regression towards historical averages would exert considerable pressure on the stock’s multiples.
The New Agreements May Establish A Margin CapThis is where the new customer contracts become crucial. These SCAs are intended to serve as a safeguard against the significant pricing volatility in the industry. However, they may also impose a limit. As management stated, “The largest agreements generally have a ceiling price for existing products at the current CQ2 market price.” These deals are not insignificant; the 16 agreements executed to date encompass approximately “20% of our DRAM volume and one-third of our NAND volume” across their multi-year duration. While this setup provides a valuable safety net for profits, it also indicates that a substantial segment of Micron’s business may not benefit if memory prices continue to escalate beyond the already elevated levels of today. The very mechanism designed to protect against declines could restrict the company’s capacity to achieve the significant earnings outperformance the market has come to anticipate. For a more detailed examination of how Micron is attempting to navigate this situation, you can investigate how the AI boom is assisting it in managing its oldest challenge. The peril is a revaluation of the stock, not due to the business failing, but because it can no longer surpass elevated expectations.
Following a substantial rally, the benchmark for success is exceedingly high. The company’s noteworthy strategic initiative to mitigate its business risks may have unintentionally limited the very upside for which investors are paying a premium. The crucial factor to monitor now is whether open-market memory prices persist in their climb; if they do, the performance of Micron’s non-contracted business will reveal the outcome.
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HomeIndustriesComputers/ElectronicsTech StocksTech Stocks‘Most investor feedback continues to point to a skittish AI tape,’ one analyst saysJuly 7, 2026, 10:29 a.m. ET
Micron Technology’s stock is falling hard on Tuesday as investors look past a massive profit boom at memory rival Samsung Electronics.
Shares of Micron MU are down 7.5%, while Sandisk’s stock SNDK is off 11% Tuesday morning. Storage makers Western Digital WDC and Seagate Technology STX are seeing their shares fall 10% and 7.6%, respectively, following big gains on Monday.
Key Takeaways Micron signed long-term memory and storage supply deals with Ford and General Motors.AI data centers, autos and tight DRAM and NAND supply are supporting Micron's growth outlook.MU is expanding capacity in Taiwan, Virginia and Idaho to meet rising long-term memory demand. Micron Technology (MU - Free Report) received another vote of confidence from the auto industry after signing a long-term agreement with Ford (F - Free Report) to supply memory and storage solutions for the automaker's next-generation vehicles. The deal comes just days after Micron announced a similar supply agreement with General Motors (GM - Free Report) , highlighting the chipmaker's growing role in powering increasingly software-defined vehicles.
The back-to-back agreements reflect a broader industry trend. Modern vehicles rely on advanced driver-assistance systems, connected features and sophisticated infotainment platforms. All these require greater amounts of memory and storage. At the same time, booming artificial intelligence (AI) investments have boosted demand for DRAM (Dynamic Random-Access Memory) used in data centers, pushing its prices higher.
For Micron, these automotive wins with Ford and General Motors complement an already strong AI-driven growth story. The company is expanding advanced DRAM production in Virginia to support long-term demand from automotive customers, while its leadership in high-bandwidth memory (HBM) for AI servers continues to benefit from surging AI infrastructure spending.
After the stock's remarkable rally over the past year, the key question for investors is whether these tailwinds still leave room for further upside.
Image Source: Zacks Investment Research
AI Boom and Tight Memory Supply Support Micron’s GrowthMicron continues to benefit from robust demand for memory chips across multiple end markets, including AI data centers, automotive, industrial and consumer applications. The company expects supply-demand conditions for both DRAM and NAND to remain tight beyond calendar 2027, creating a favorable pricing environment for memory manufacturers.
The strength of this backdrop was evident in Micron's third-quarter fiscal 2026 results, with both revenues and earnings comfortably surpassing analysts' expectations.
DRAM remained the primary growth engine, contributing 76% of total revenues. Sales from the segment jumped 67% sequentially, supported by higher selling prices and steady shipment growth.
Demand for Micron's HBM, a critical component in AI servers, continues to accelerate as cloud providers and chipmakers expand AI infrastructure. The company has already generated more than $1 billion in HBM4 revenues, while the volume ramp of its HBM4 12-high products is progressing twice as fast as the previous HBM3E generation. Reflecting this momentum, Micron now expects the HBM market to exceed $100 billion by calendar 2027, earlier than previously projected.
Capacity Expansion Strengthens MU’s Long-Term OutlookMicron is also investing to support future demand. Earlier this year, the company completed the acquisition of Powerchip Semiconductor Manufacturing Corporation's facility in Taiwan, expanding its manufacturing footprint. It now expects meaningful production from the Tongluo fab to begin by mid-2027, ahead of earlier expectations, while construction of a second cleanroom is underway to support future EUV-based manufacturing. Meanwhile, its Idaho DRAM facility remains on track.
Micron is also strengthening customer relationships through long-term supply agreements, having signed 16 multi-year take-or-pay contracts (as highlighted during the fiscal third-quarter 2026 earnings call) with binding volume commitments. Combined with its growing presence in AI, automotive and enterprise storage—including an expanding SSD business—these investments provide Micron with stronger revenue visibility and position it well to capitalize on rising memory demand over the coming years.
The Zacks Consensus Estimate for MU’s fiscal 2026 and 2027 sales implies year-over-year growth of 234% and 88%, respectively. The same for fiscal 2026 and 2027 EPS calls for an uptick of 790% and 107%, respectively.
See how the consensus mark for Micron’s EPS has been revised in the past 60 days.
Image Source: Zacks Investment Research
MU’s Valuation CheckDespite such a strong rally over the past year, Micron's valuation remains much more reasonable relative to the broader sector. The stock continues to be supported by improving profitability, rising earnings estimates and sustained demand for memory chips across AI, automotive and other end markets.
Image Source: Zacks Investment Research
Unlike many high-growth AI stocks that trade at stretched valuations, Micron is benefiting from both strong AI-driven demand and favorable memory pricing. As long as the company continues to execute on its HBM roadmap, expand capacity and capitalize on tight DRAM and NAND supply conditions, its current valuation still appears attractive for long-term investors.
MU Still a Screaming Buy at Current LevelsThe biggest mistake investors can make is assuming Micron's rally has already priced in its future. The company's business mix is becoming structurally stronger, supported by AI, long-term supply agreements and expanding end-market opportunities. It is a cash-rich company with a strong balance sheet. With earnings expected to grow rapidly and memory demand remaining favorable, Micron appears well-positioned for more upside and certainly deserves a place in long-term growth portfolios.
Micron sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Investors interested in Consumer Discretionary stocks should always be looking to find the best-performing companies in the group. AMC Entertainment (AMC - Free Report) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Discretionary sector should help us answer this question.
AMC Entertainment is a member of our Consumer Discretionary group, which includes 260 different companies and currently sits at #7 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. AMC Entertainment is currently sporting a Zacks Rank of #2 (Buy).
Within the past quarter, the Zacks Consensus Estimate for AMC's full-year earnings has moved 13.6% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.
Based on the most recent data, AMC has returned 11.5% so far this year. Meanwhile, stocks in the Consumer Discretionary group have lost about 9% on average. This means that AMC Entertainment is outperforming the sector as a whole this year.
One other Consumer Discretionary stock that has outperformed the sector so far this year is Bassett Furniture (BSET - Free Report) . The stock is up 17.5% year-to-date.
Over the past three months, Bassett Furniture's consensus EPS estimate for the current year has increased 1.8%. The stock currently has a Zacks Rank #1 (Strong Buy).
Looking more specifically, AMC Entertainment belongs to the Leisure and Recreation Services industry, a group that includes 28 individual stocks and currently sits at #197 in the Zacks Industry Rank. This group has lost an average of 6.3% so far this year, so AMC is performing better in this area.
In contrast, Bassett Furniture falls under the Furniture industry. Currently, this industry has 7 stocks and is ranked #28. Since the beginning of the year, the industry has moved +6.1%.
Going forward, investors interested in Consumer Discretionary stocks should continue to pay close attention to AMC Entertainment and Bassett Furniture as they could maintain their solid performance.
Key Takeaways AMC will launch Arena One in June 2026, bringing live concerts to more than 300 U.S. theaters.AMC's Q1 revenues rose 21.2% y/y to $1.05B as attendance increased 13.6%.AMC aims to diversify revenues, boost theater use and create incremental traffic with Arena One. AMC Entertainment Holdings, Inc. (AMC - Free Report) is expanding beyond traditional movie exhibition with the launch of Arena One at AMC, a new platform that will bring live concerts into its theaters nationwide. While the ongoing recovery in the box office remains the company's primary growth engine, Arena One reflects management's broader strategy of maximizing the earning potential of its theater network by introducing alternative content. The initiative raises an important question for investors: whether live concert programming can become a meaningful contributor to AMC's long-term growth.
Management announced that Arena One at AMC will launch in June 2026 across more than 300 theaters in the United States, allowing fans to experience live concerts on the big screen simultaneously across the country. According to the company, the initiative opens AMC's theaters "not only to moviegoers but also to fans of live concerts," representing another step in broadening the company's entertainment offerings.
The launch also comes at a favorable time for the exhibition industry. AMC reported that the North American box office increased 22% year over year during the first quarter of 2026, with management expressing confidence that the 2026 film slate will produce the strongest post-pandemic box office performance. The company also highlighted renewed commitments from major studios to maintain exclusive theatrical windows of at least 45 days, supporting a healthier exhibition environment. Rather than replacing movies, Arena One complements this improving backdrop by providing another reason for consumers to visit theaters.
AMC's improving financial performance further supports its ability to pursue new initiatives. During the first quarter of 2026, revenues increased 21.2% year over year to $1.05 billion, attendance rose 13.6%, and adjusted EBITDA improved by $96 million to $38.3 million, marking the company's strongest first-quarter adjusted EBITDA since before the pandemic. At the same time, management continued strengthening the balance sheet through debt refinancing, debt-to-equity conversions and equity issuance, improving financial flexibility as it invests in strategic growth opportunities.
Nevertheless, Arena One represents a logical extension of AMC's broader strategy to transform its theaters into multi-purpose entertainment destinations rather than venues dedicated solely to movies. By leveraging its nationwide premium-screen network to host live concerts, the company is seeking to diversify revenue streams, improve theater utilization and create incremental customer traffic. While movies will remain the foundation of the business, the successful execution of Arena One could provide an additional growth avenue that strengthens AMC's earnings potential over the long term.
Exhibitors Look Beyond Movies to Drive Higher Theatre UtilizationAMC's Arena One initiative reflects a broader industry focus on maximizing theater traffic and enhancing the overall guest experience. Other exhibitors, including The Marcus Corporation (MCS - Free Report) and Reading International, Inc. (RDI - Free Report) , are also investing in initiatives that encourage more frequent visits and improve spending per guest, even though their strategies remain centered on the traditional theatrical experience.
Marcus continues to focus on strengthening theater economics through digital enhancements and premium guest experiences. During the first quarter of 2026, MCS completed the rollout of tap-to-pay terminals across its theaters, expanded in-seat QR code food ordering at all dine-in locations and is developing a redesigned digital food-and-beverage ordering platform to increase basket sizes and improve customer convenience. Management also highlighted ongoing investments in premium large-format screens, strategic ticket pricing and merchandise sales to drive higher per-capita spending while benefiting from a stronger film slate.
Reading International is pursuing a complementary strategy by enhancing the in-theater experience and optimizing its cinema portfolio. Management emphasized premium cinema offerings, luxury seating upgrades and operational initiatives aimed at improving attendance and profitability while capitalizing on a stronger release schedule. RDI also expects an improving film slate to support higher theater utilization and operating performance over the next several quarters.
AMC’s Price Performance, Valuation & EstimatesShares of AMC have gained 29.8% in the past three months, outperforming the Zacks Leisure and Recreation Services industry, the broader Consumer Discretionary sector and the S&P 500 Index.
AMC Stock’s Three-Month Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, AMC stock trades at a forward price-to-sales ratio of 0.28, below the industry’s average of 2.72.
AMC’s P/s Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
AMC’s bottom-line estimates for 2026 and 2027 reflect a loss per share of 23 cents and 11 cents, respectively, which have narrowed over the past 30 days. However, the revised estimates for 2026 and 2027 indicate year-over-year growth of 76% and 51.1%, respectively.
EPS Trend of AMC Stock
Image Source: Zacks Investment Research
AMC currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
New single-stock ETFs give investors amplified leveraged daily participation tied to BlackBerry Limited (NYSE: BB) and Everpure, Inc. (NYSE: P)
NEW YORK, July 07, 2026 (GLOBE NEWSWIRE) -- GraniteShares, an independent ETF issuer known for its lineup of leveraged single-stock ETFs, today announced the launch of
GraniteShares 2x Long BlackBerry Daily ETF (Ticker: BBUL)
GraniteShares 2x Long P Daily ETF (Ticker: PUL)
BBUL seeks daily investment results, before fees and expenses, of 200% (2x) of the daily percentage change in the price of BlackBerry common stock (NYSE: BB).
PUL seeks daily investment results, before fees and expenses, of 200% (2x) of the daily percentage change in the price of Everpure common stock (NYSE: P).
The new funds give traders a way to seek amplified daily returns on two actively traded software names through a single ticker, without the need for a margin account, options approval, or borrowing costs. Each fund resets its leverage daily, providing a defined 2x objective at the start of every trading session. Shares can be bought and sold intraday through any standard brokerage account.
BBUL and PUL join GraniteShares' lineup of leveraged single-stock ETFs, one of the largest in the market, covering high-conviction names across technology, AI, crypto, and consumer sectors.
“Traders want simple, efficient tools to act on short-term conviction,” said Will Rhind, Founder and CEO of GraniteShares. “BBUL and PUL deliver 2x daily leveraged positioning in a single trade. No margin account, no options chains, just a ticker. That simplicity is why leveraged single-stock ETFs have become one of the fastest-growing categories in the market, and why we continue to expand our lineup.”
Fund Details
Each Fund seeks its stated investment objective for a single day only, before fees and expenses. Due to the daily reset of leverage and the effects of compounding, returns over periods longer than one day will likely differ in amount and possibly direction from 2x the return of the underlying stock over the same period. The Funds are intended for knowledgeable investors who understand these risks and are willing to monitor their positions frequently.
About GraniteShares
GraniteShares is a global investment firm dedicated to creating and managing ETFs. Founded in 2016 by William “Will” Rhind and headquartered in New York City, GraniteShares provides products across U.S., U.K., German, French, and Italian exchanges. The firm offers a range of leveraged, income-oriented, and thematic ETFs, including its YieldBOOSTTM platform and single-stock leveraged ETF lineup.
GraniteShares is a market leader in leveraged single-stock ETFs and has $13.205 billion in assets under management as of July 06, 2026.
For more information, visit graniteshares.com.
Media Contact
GraniteShares, Inc.
250 Broadway, 24th Floor, New York, NY 10007
Phone: (844) 476-8747
Email: [email protected]
Web: graniteshares.com
RISK FACTORS AND IMPORTANT DISCLOSURE
This material must be preceded or accompanied by a Prospectus. Carefully consider the Fund’s investment objectives risk factors, charges and expenses before investing. Please read the prospectus before investing.
The Fund is not suitable for all investors. The investment program of the funds is speculative, entails substantial risks and include asset classes and investment techniques not employed by most ETFs and mutual funds. Investments in the ETFs are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund is designed to be utilized only by knowledgeable investors who understand the potential consequences of seeking daily leveraged (2X) investment results, understand the risks associated with the use of leverage and are willing to monitor their portfolios frequently. For periods longer than a single day, the Fund will lose money if the Underlying Stock’s performance is flat, and it is possible that the Fund will lose money even if the Underlying Stock’s performance increases over a period longer than a single day. An investor could lose the full principal value of his/her investment within a single day.
The Fund seeks daily leveraged investment results and are intended to be used as short-term trading vehicles. This Fund attempts to provide daily investment results that correspond to the respective long leveraged multiple of the performance of its underlying stock (a leverage Fund).
Investors should note that such Leverage Long Fund pursues daily leveraged investment objectives, which means that the Fund is riskier than alternatives that do not use leverage because the Fund magnifies the performance of its underlying stock. The volatility of the underlying security may affect a Funds return as much as, or more than, the return of the underlying security.
Because of daily rebalancing and the compounding of each day’s return over time, the return of the Fund for periods longer than a single day will be the result of each day’s returns compounded over the period, which will very likely differ from 200% of the return of the Underlying Stock over the same period. The Fund will lose money if the Underlying Stock’s performance is flat over time, and as a result of daily rebalancing, the Underlying Stock volatility and the effects of compounding, it is even possible that the Fund will lose money over time while the Underlying Stock's performance increases over a period longer than a single day.
Shares are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. There can be no guarantee that an active trading market for ETF shares will develop or be maintained, or that their listing will continue or remain unchanged. Buying or selling ETF shares on an exchange may require the payment of brokerage commissions and frequent trading may incur brokerage costs that detract significantly from investment returns.
An investment in the Fund involves risk, including the possible loss of principal. The Fund is non-diversified and includes risks associated with the Fund concentrating its investments in a particular industry, sector, or geographic region which can result in increased volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause their price to fluctuate over time. Risks of the Fund include effects of Compounding and Market Volatility Risk, Leverage Risk, Market Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Other Investment Companies (including ETFs) Risk, and risks specific to the securities of the Underlying Stock and the sector in which it operates. These and other risks can be found in the prospectus.
This information is not an offer to sell or a solicitation of an offer to buy shares of any Funds to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. Please consult your tax advisor about the tax consequences of an investment in Fund shares, including the possible application of foreign, state, and local tax laws. You could lose money by investing in the ETFs. There can be no assurance that the investment objective of the Funds will be achieved. None of the Funds should be relied upon as a complete investment program.
Our expert, award-winning staff selects the products we cover and rigorously researches and tests our top picks. If you buy through our links, we may get a commission. How we test vacuums
iRobot's new five-in-one floor cleaner can disinfect your floors without using any chemicals or cleaning fluids.
Ajay has worked in tech journalism for over a decade as a reporter, analyst, product reviewer, and editor. He got his start in consumer tech, breaking Android news at Newsweek before going to PCMag, where he reviewed hundreds of smartphones, battery packs, and chargers as a Mobile Analyst. He also worked at Lifewire, a Dotdash Meredith brand, as a Tech Commerce Editor, putting together tested best-of lists and assigning product reviews across categories including smart home, uninterruptible power supplies, generators, and automotive tech. Most recently, he was Section Editor, Mobile at Digital Trends, spearheading his team's coverage of breaking news, features, reviews, roundups, deals, and more across a variety of mobile products, including phones, wearables, VR headsets, batteries, and chargers. If you want Ajay's advice about anything tech, especially solar panels, UPS, batteries, EVs, and charging technology, you can reach him at [email protected].
Expertise 13+ years of experience in consumer product reviews, buying guides, best lists, and tech news across a variety of tech categories. As a homeowner, Ajay is also familiar with the unique electrical issues that can crop up in a prewar apartment building.
3 min read
iRobot may be best known for its robot vacuums, but like competitors Dreame and Roborock, it's also getting into the wet-and-dry mopping category. The Roomba Electro Plus is the company's first non-robot vacuum product, but it's also another first: It uses electricity to clean and disinfect hard floors instead of a traditional cleaning solution.
"The device uses tap water, which contains naturally occurring free chlorine," said Adam Pope, iRobot chief engineer and vice president, in a video interview with me. "A small electrical current creates hypochlorous acid from this chlorine, a safe and effective disinfectant applied to the roller and floor to kill germs."
The Electro will self-clean and self-dry when you press a button after it's docked.
iRobotThe Roomba Electro Plus is essentially creating electrolyzed water on demand that can be used in place of regular floor cleaners. According to Pope, it can kill 99.99% of bacteria, viruses, fungi and other germs without any added chemicals, toxins or steam, making it safe for pets and kids and environmentally friendly. I asked Pope if it would still take a cleaning solution for those who preferred a particular scent, for example, and he told me that while a standard cleaning solution isn't compatible, an iRobot cleaning solution would be available.
In other respects, the Electro Plus is more of a traditional wet-and-dry cleaner, though it comes with all the bells and whistles we've come to expect from similar units we've tested, such as the Roborock F25 Ultra. It has the PowerSpion roller mop we've seen on iRobot's robot vacuums, with automatic dirt detection that adjusts roller speed and water flow for deeper cleaning. The rollers use anti-hair wrap technology, and the included docking station automatically heats, washes, dries and sanitizes the mop when you press a button after docking it.
The Electro is designed to replace most other floor cleaning options.
iRobotAccording to iRobot, it can be controlled with just one hand because, like the F25 Ultra, it has powered assistance wheels and is fairly lightweight. The design can lie flat up to 180 degrees to get under furniture, and its battery life should last for around 35 minutes in the eco-mode setting.
The Roomba Electro Plus will cost $400 at launch and will be available starting July 7.
An all-new robot vacuum lineup The entire lineup of the Roomba models includes the 415, 515, 575, 715 and 775.
iRobotAlso new from iRobot is a whole lineup of robot vacuums, replacing parts of the company's existing lineup. At the top is the Roomba Max 775 Combo Robot Plus AutoWash Dock. Priced at $1,000, it's the most advanced model in the lineup, with lidar, 3D mapping and advanced obstacle recognition and avoidance for pet zones, cords, shoes and more. It's also designed for power mopping, with the same PowerSpin roller mop as the Electro, 167-degree-Fahrenheit hot water cleaning, a self-emptying docking station and bagged waste collection with carbon odor control.
The 775 Combo also comes with a companion, the Roomba Max 715 Vacuum Robot Plus AutoEmpty Dock, for $700. It has the same suction and vacuum performance, as well as the docking station, but it won't include mopping capabilities.
The Roomba 575 Vacuum Robot Plus AutoEmpty Dock is a $700 vacuum-only model, but aside from mopping, it offers most of the same navigation and obstacle-avoidance features. It should last for three months without needing to empty with the included docking station.
The Roomba 575 includes a docking station but has the classic iRobot design.
iRobotThe Roomba 515 Combo Plus AutoWash will cost $700 and offers a more compact design that fits under furniture more easily, as well as a longer battery life of up to 295 minutes (almost 10 hours). iRobot says it can clean up to 2,000 square feet on a single charge. It also has an onboard water tank for its mopping pads, lidar mapping and a self-cleaning docking station for washing and drying the mops.
On the more mid-price end is the Roomba Plus 415 Combo Plus AutoWash Dock at $600. It has the same compact body as the 515 Combo, which is 46% more compact, and also comes with dual-spinning mopping pads, pad dry and lidar navigation.
These robots are availbile for preorder now through iRobot.
Appliances
AJAY KUMAR
Editor
Ajay has worked in tech journalism for over a decade as a reporter, analyst, product reviewer, and editor. He got his start in consumer tech, breaking Android news at Newsweek before going to PCMag, where he reviewed hundreds of smartphones, battery packs, and chargers as a Mobile Analyst. He also worked at Lifewire, a Dotdash Meredith brand, as a Tech Commerce Editor, putting together tested best-of lists and assigning product reviews across categories including smart home, uninterruptible power supplies, generators, and automotive tech. Most recently, he was Section Editor, Mobile at Digital Trends, spearheading his team's coverage of breaking news, features, reviews, roundups, deals, and more across a variety of mobile products, including phones, wearables, VR headsets, batteries, and chargers. If you want Ajay's advice about anything tech, especially solar panels, UPS, batteries, EVs, and charging technology, you can reach him at [email protected]. See full bio
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Zillow (Z - Free Report) Zillow Group, Inc. and its affiliates connect renters, buyers, sellers and real estate professionals to meet residential real estate needs. The company intends to transform the experience through its all-in-one digital platform, the Zillow housing super app. With around 173 million U.S. homes in its database, it helps sellers showcase properties on its platform to engage potential homebuyers. Zillow also supports homebuyers and renters by connecting them with digital tools and real estate professionals to ease shopping, financing and renting.
Z is a #1 (Strong Buy) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. Z has a Growth Style Score of A, forecasting year-over-year earnings growth of 37.2% for the current fiscal year.
For fiscal 2026, one analyst revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $2.25 per share. Z boasts an average earnings surprise of +1.2%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, Z should be on investors' short list.
New York, New York--(Newsfile Corp. - July 7, 2026) - Bronstein, Gewirtz & Grossman, LLC, a nationally recognized investor-rights law firm, announces that a class action lawsuit has been filed against Zillow Group, Inc. (NASDAQ: Z) and certain of its officers.
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired Zillow securities between February 11, 2025 and May 7, 2026, both dates inclusive (the "Class Period"). Such investors are encouraged to join this case by visiting the firm's site: bgandg.com/Z.
Zillow Case Details
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements and/or failed to disclose that:
Zillow's agreement with Redfin Corporation was not a "partnership," but rather an acquisition of Redfin's business; as a result of the Redfin Agreement, Zillow faced a materially heightened risk of regulatory scrutiny and liability under federal antitrust laws; upon the filing of an antitrust lawsuit, Zillow continued to downplay its legal exposure; and as a result, defendants' statements about Zillow's business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.What's Next for Zillow Investors?
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm's site: bgandg.com/Z, or you may contact Peretz Bronstein, Esq. or his Client Relations Manager, Nathan Miller, of Bronstein, Gewirtz & Grossman, LLC at 917-590-0911. If you suffered a loss in Zillow you have until August 10, 2026, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as lead plaintiff.
No Cost to Zillow Investors
We, Bronstein, Gewirtz & Grossman LLC, represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys' fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman, LLC for Zillow Securities Class Action?
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide. More at www.bgandg.com
"Our practice centers on restoring investor capital and ensuring corporate accountability, which serves to uphold the essential integrity of the marketplace," said Peretz Bronstein, Founding Partner of Bronstein, Gewirtz & Grossman, LLC.
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Source: Bronstein, Gewirtz & Grossman, LLC
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Key Takeaways MercadoLibre is expanding AI across commerce and fintech to boost efficiency, UX and revenues.MercadoLibre's LLM search improved relevance, conversions and sponsored listing click-throughs.MercadoLibre uses AI in Seller Assistant, logistics, Mercado Pago and internal development. MercadoLibre, Inc. (MELI - Free Report) is expanding the use of artificial intelligence (AI) across its commerce and fintech ecosystem, with management highlighting AI as an increasingly important tool for improving efficiency, enhancing user experiences and generating incremental revenues. The company is embedding AI across multiple parts of its business to improve customer experiences and increase productivity.
One of the most notable developments in the first quarter of 2026 was the rollout of an AI-powered search experience built on large language models. The new system moves beyond traditional keyword-based searches by better understanding customer intent. Management said the rollout in Brazil and Mexico improved product relevance, resulting in higher conversion rates and stronger click-through rates for sponsored listings, which generated incremental revenues.
During the first-quarter earnings call, management added that the technology is already live in Brazil, Mexico and Argentina, where it is enhancing product discovery, strengthening user engagement and improving ad returns through more relevant search results.
Beyond search, artificial intelligence is increasingly supporting operational efficiency across the business. MercadoLibre reported that daily active users of its Seller Assistant grew more than 40% month over month in March. Within its logistics network, an AI-powered assistant provides representatives with real-time process information and insights into operational challenges, helping improve productivity across fulfillment.
In Brazil, Mercado Pago's AI assistant has become more proactive by alerting users to negative balances in accounts connected through Open Finance and identifying funds held elsewhere that could earn higher yields with Mercado Pago. It can also move balances between accounts within seconds, enabling users to act immediately on those opportunities.
Internally, AI adoption is also improving software development efficiency, with productivity metrics growing seven to 10 times faster than headcount growth, while code rollbacks have declined materially year over year. MercadoLibre has also deployed Claude Cowork to approximately 31,000 employees, supporting broader AI adoption across the organization.
What the Latest Metrics Say About MercadoLibreMercadoLibre, which competes with Amazon.com, Inc. (AMZN - Free Report) and Sea Limited (SE - Free Report) , has seen its shares jump 3.7% over the past three months compared with the industry’s 8.9% rise. While shares of Amazon have rallied 14.4%, those of Sea Limited have advanced 28.9% in the aforementioned period.
Image Source: Zacks Investment Research
From a valuation standpoint, MercadoLibre's forward 12-month price-to-earnings (P/E) ratio stands at 35.52, higher than the industry’s ratio of 21.40. The stock is also trading above its 12-month median level of 34.47.
MercadoLibre is trading at a premium to Amazon (with a forward 12-month P/E ratio of 25.72) and Sea Limited (21.29).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MercadoLibre’s current financial-year sales and earnings per share implies year-over-year growth of 39.7% and 4%, respectively. For the next fiscal year, the consensus estimate indicates a 26.6% rise in sales and 47% growth in earnings.
The consensus estimate for earnings per share for the current and next fiscal year has fallen by $6.87 and $6.95 to $40.97 and $60.22, respectively, over the past 60 days.
Image Source: Zacks Investment Research
MELI currently carries a Zacks Rank #5 (Strong Sell). The rank reflects near-term earnings pressure despite the company’s strong top-line momentum. Although revenues increased 49% year over year in the first quarter, operating margin fell to 6.9% from 12.9% a year ago, and Net Interest Margin After Losses declined to 17.8% from 22.7% as the credit portfolio expanded. With accelerated investments continuing to weigh on profitability, earnings leverage may remain limited in the near term. The Zacks Consensus Estimate for second-quarter earnings calls for a 15.7% year-over-year decline.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Occidental Petroleum (OXY - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this oil and gas exploration and production company have returned -15.1% over the past month versus the Zacks S&P 500 composite's +2.1% change. The Zacks Oil and Gas - Integrated - United States industry, to which Occidental belongs, has lost 10.8% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Occidental is expected to post earnings of $1.85 per share, indicating a change of +374.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -8.1% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $5.99 points to a change of +171% from the prior year. Over the last 30 days, this estimate has changed +3.5%.
For the next fiscal year, the consensus earnings estimate of $4.25 indicates a change of -29.1% from what Occidental is expected to report a year ago. Over the past month, the estimate has changed -0.9%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Occidental is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Occidental, the consensus sales estimate for the current quarter of $7.22 billion indicates a year-over-year change of +11.9%. For the current and next fiscal years, $25.57 billion and $24.21 billion estimates indicate +0.5% and -5.3% changes, respectively.
Last Reported Results and Surprise HistoryOccidental reported revenues of $5.11 billion in the last reported quarter, representing a year-over-year change of -25.3%. EPS of $1.06 for the same period compares with $0.87 a year ago.
Compared to the Zacks Consensus Estimate of $5.5 billion, the reported revenues represent a surprise of -7.03%. The EPS surprise was +63.08%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Occidental is graded A on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Occidental. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
