Track market-moving stories before they get noisy

Both software giants report earnings Sept. 10, but Morgan Stanley sees very different setups for the two stocks. Summary

Morgan Stanley raised its Oracle target to $210, implying about 32% upside

Oracle Corp. (ORCL, Financials) and Adobe are scheduled to release earnings on the same day. Morgan Stanley thinks this one is considerably better positioned.

The bank boosted its Oracle price target to $210 from $207 signaling about 32% upside but with an Equal-weight rating.

Analyst Sanjit Singh anticipates Oracle's cloud revenue growth to be near the high end of management's 58% to 64% projection, driven by new compute capacity for AI workloads.

Wall Street estimates suggest Oracle's quarterly revenue will grow approximately 28% to $19.13 billion and adjusted earnings will be $1.74 per share.

Adobe has a different problem. Morgan Stanley has an Underweight rating on the stock with a $240 target, which implies around 10% downside.

Not just one quarter of worry. Investors are anxious to see how Adobe's growth strategy will alter under new leadership. Anil Chakravarthy will succeed longstanding CEO Shantanu Narayen on Dec. 1. That makes Sept. 10 very intriguing.

Oracle needs to prove that its big bet on AI infrastructure is boosting its cloud sales. Adobe needs to sell investors on growth holding up through another big leadership change.

More positive on Oracle in the immediate term is Morgan Stanley.

Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

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Robbins LLP is investigating allegations that defendants misled investors regarding Dick's growth and profitability in light of the integration of recently acquired Foot Locker.

, /PRNewswire/ -- Robbins LLP notifies investors that a class action lawsuit has been filed against Dick's Sporting Goods, Inc. (NYSE: DKS) on behalf of shareholders who purchased common stock between September 8, 2025, and August 24, 2026. The legal action follows a sharp decline in the company's market value after disappointing financial results linked to its acquisition of Foot Locker. Investors who suffered losses during the class period can get more information Robbins LLP.

On August 25, 2026, Dick's reported second-quarter revenue from Foot Locker of $1.73 billion, missing analyst estimates of $1.81 billion. The company simultaneously lowered its full-year 2026 net sales guidance and disclosed that it expected Foot Locker's proforma comparable sales to decline by as much as 2.0%—a significant reversal from the previously forecasted growth of 1.5% to 3%.

Following these disclosures, the price of Dick's common stock fell $55.02 per share, a decline of approximately 30%, to close at $124.31 per share on August 25, 2026.

Allegations of Misleading Disclosures

The complaint alleges that Dick's Sporting Goods misled investors by touting the Foot Locker acquisition as a strategic growth driver while omitting critical information about inventory challenges. Specifically, the lawsuit claims the company failed to disclose that efforts to clean up Foot Locker's inventory were incomplete and that the business remained heavily dependent on legacy footwear products vulnerable to intensifying promotional pressures.

Executive Chairman Edward W. Stack later revealed the athletic footwear marketplace had become "increasingly promotional," which significantly impacted the Foot Locker business due to its "greater exposure to legacy footwear."

Investors who wish to serve as lead plaintiff must move the court no later than November 3, 2026. A lead plaintiff is a court-appointed representative acting on behalf of other class members. While serving as a lead plaintiff is not required to participate in any potential recovery, it allows shareholders to direct the litigation.

Robbins LLP represents investors on a contingency fee basis, meaning shareholders pay no out-of-pocket costs for representation. Additional information regarding the class action and potential eligibility is may contact Robbins LLP by submitting an inquiry, emailing attorney Aaron Dumas, Jr., or calling (800) 350-6003.

"Companies have an obligation to provide investors with complete and accurate information so that markets can function fairly and efficiently," said Brian J. Robbins, Founding Partner of Robbins LLP. Shareholders can sign up for Stock Watch to receive alerts regarding corporate wrongdoing.

SOURCE Robbins LLP

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Key Takeaways Baxter lifts 2026 sales growth to 3%-4% and adjusted EPS guidance to $1.95-$2.15.Q2 revenues rose 5% to $2.96B, with Advanced Surgery delivering 12% organic growth.Baxter's margins fell as manufacturing costs, tariffs and higher-cost inventory pressured profits. Baxter International Inc. (BAX - Free Report) raised its 2026 sales and adjusted earnings outlook after second-quarter results exceeded expectations. The update gives investors another data point on the company’s early-stage turnaround as operating execution improves.

The remaining question is whether better demand and cost actions can translate into sustained earnings improvement while margins face manufacturing, tariff and pricing pressure.

BAX Lifts 2026 Sales and Earnings ExpectationsBaxter now expects 2026 reported sales growth of 3% to 4%, up from its prior forecast of flat to 1% growth. Organic sales are projected to increase 2% to 3%, compared with the earlier expectation of approximately flat growth.

Adjusted earnings guidance increased to $1.95-$2.15 per share from $1.85-$2.05. Management tied the stronger organic sales view to year-to-date performance and expected second-half growth, while the higher earnings outlook also incorporates the second-quarter tariff refund benefit.

Image Source: Zacks Investment Research

Baxter Q2 Results Show Broad-Based Organic GrowthSecond-quarter revenues were $2.96 billion, up 5% on both a reported and organic basis. Adjusted earnings came in at 56 cents per share, ahead of expectations despite declining 5% from the year-ago period.

Medical Products & Therapies generated $2.08 billion in sales and grew 5% organically, while Healthcare Systems & Technologies posted $801 million and 4% organic growth. Advanced Surgery stood out with $331 million in revenues and 12% organic growth, supported by demand for hemostats and sealants.

BAX Margin Compression Tempers the Earnings BeatThe earnings beat did not remove profitability concerns. Adjusted gross margin fell 210 basis points to 38.6%, while adjusted operating margin declined 90 basis points to 14.2%.

Higher-cost inventory produced in late 2025, manufacturing costs and tariffs weighed on profitability. Medical Products & Therapies also saw a lower contribution from pricing. Baxter still expects full-year adjusted operating margin of 13% to 14%, leaving margin recovery dependent on stronger volumes, cost actions and improved inventory flow-through.

Baxter Novum Hold Remains a Key Guidance RiskThe Novum IQ large-volume pump hold remains an execution risk. Lower Infusion Systems sales in the second quarter reflected the ongoing shipment and installation hold, customer returns and transitions to Spectrum, even as demand for Spectrum IQ remained steady.

Baxter has identified corrections and moved into early verification testing while continuing to work with regulators. The 2026 outlook still includes potential customer uncertainty around the hold, so a delayed normalization could continue to constrain Infusion Systems performance.

Becton, Dickinson and Company (BDX - Free Report) also competes in infusion technology through its Alaris system, underscoring the importance of reliable product availability in this market. ICU Medical, Inc. (ICUI - Free Report) sells IV smart pumps and other infusion-therapy products, giving hospital customers another established alternative within the broader infusion landscape.

BAX Ratings Keep the Outlook BalancedBaxter’s raised guidance improves the earnings backdrop, but margin pressure and the unresolved Novum hold keep the turnaround from looking complete. The stock currently carries a Zacks Rank #3 (Hold), a rating consistent with a more balanced near-term setup rather than a clear directional signal. Both, Becton, Dickinson and Company and ICU Medical, also cayry a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BAX has a Value Score of B, Growth Score of B and VGM Score of B, providing favorable supporting characteristics across valuation and growth measures. Its Momentum Score of C is less supportive, reinforcing that stronger guidance by itself does not eliminate near-term execution uncertainty

On paper, Applied Digital (APLD +1.77%) has already sold the next 15 years. The artificial intelligence (AI) data center builder has signed leases covering about 1,410 megawatts (MW) of critical IT load (the power available to tenants' computing equipment) across five campuses. Those contracts add up to about $36 billion over their initial 15-year base terms.

And yet the company generated just $611.3 million of revenue in the fiscal year that ended May 31 -- and posted a $249.2 million net loss attributable to common shareholders.

As of this writing, the growth stock sits near $26, well below the $50.73 it touched over the past year, and the market values the company at about $7.7 billion.

The difference is timing. Applied Digital's leases don't pay until the buildings are finished, powered, and handed over. And only 175 MW of the contracted capacity was live as of the company's late-July update.

Image source: Getty Images.

A $36 billion lease bookThe five campuses (three in North Dakota and two in the South) are leased to CoreWeave and two investment-grade hyperscalers. Each lease runs 15 years on a take-or-pay basis, meaning the tenant owes the rent whether or not it uses the space.

Today's business, however, is far smaller than the contracts suggest. Revenue jumped 167% year over year in fiscal 2026, to $611.3 million, but only $99.8 million of that was base rent from the AI campuses. Most of the rest came from crypto mining hosting and from reimbursed work fitting out tenants' buildings. And the net loss widened slightly year over year as overhead and stock-based compensation climbed.

"We believe delivering on time is a genuine differentiator in this industry," CEO Wes Cummins said in the company's fiscal fourth-quarter update. "We brought Polaris Forge 1's first 100 MW online on schedule and have now scaled total live capacity at the campus to 175 MW."

When does the rent arrive?Applied Digital begins recognizing rental revenue when a property is ready for its intended use and the tenant takes possession. In other words, a signed lease on an unfinished building produces no rental revenue at all.

The annual report even warns that significant construction delays can, in certain circumstances, give tenants the right to terminate.

The company's own schedule of minimum lease payments shows how gradually the money arrives: the leases call for $451 million in fiscal 2027. Fiscal 2028's figure is $1.45 billion, and fiscal 2029's is $2.25 billion. In other words, less than $2 billion of the 15-year, $36 billion total (about 5%) arrives before fiscal 2029. Payments quintuple across those three years as buildings come online, with deliveries phased from Polaris Forge 2's first buildings in calendar 2026 out to the second half of calendar 2028. Once every campus is delivered, the leases call for about $2.3 billion of rent per year.

That schedule, I'd argue, is the heart of the case. Take-or-pay contracts leave little doubt about who owes the rent, so long as the buildings get built. What's still open is the construction itself, and big builds can slip.

The financing isn't cheapThe construction bill, meanwhile, is due now. Applied Digital's capital expenditures came to $2.87 billion in fiscal 2026, up from about $680 million the year before.

It ended fiscal 2026 with $5.0 billion of debt against $4.2 billion of cash, much of it restricted. The subsidiaries' senior secured notes carry rates from 6.75% to 9.25%.

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Macquarie Asset Management has also funded $1.8 billion of perpetual preferred equity, with the right to invest up to $4.9 billion more, for the North Dakota campuses. But that money isn't free either, since preferred capital collects ahead of common shareholders.

At about $7.7 billion, the market is paying more than 12 times fiscal 2026 sales -- and over three times the annual rent the finished portfolio is contracted to produce. That valuation arguably bakes in years of smooth construction.

It might all go to plan. Management has delivered on schedule so far, and the leases likely remove most of the demand risk a project like this usually carries.

But most of the buildings don't exist yet, and lenders and preferred holders get paid before common shareholders do. I'd avoid buying shares today. If Applied Digital keeps delivering campuses on schedule (management expects Polaris Forge 2's first buildings to begin coming online in calendar 2026), I would take another look.

Oracle (ORCL +3.08%) closed at $158.78 on Friday, 54% below its record high of $345.72. The stock set that high on Sept. 10 of last year -- one year to the day before its next earnings report, scheduled for Thursday, Sept. 10.

Shares have been in a hole this deep before. Measured on monthly closing prices, adjusted for stock splits, the stock peaked at $45.47 in August 2000 and fell 83% to $7.86 by September 2002. It didn't close a month above the 2000 level until June 2017, nearly 17 years after the peak.

Before that history scares anyone out of the stock, though, it's worth looking at what made the last recovery so slow. It wasn't the business.

Image source: Getty Images.

The 17-year round tripDaily closing prices tell the same story. The stock's best close of 2000 was $46.31, on Sept. 1 of that year. Shares came within 8 cents of that level in December 2014, faded, and finally closed higher on June 21, 2017. Later that day, Oracle reported its fiscal 2017 results.

And the fall itself was enormous. A stock that drops 83% has to rise nearly 480% just to get back to even.

Today's decline has been shallower, but not by as much as the 54% figure suggests. At its low of $114.50 in late July, the stock was down 67% from its high.

What took so long?To me, the striking part of the dot-com episode is what didn't happen. Demand didn't collapse.

Oracle's revenue rose 7% in fiscal 2001 (the company's fiscal years end May 31), then fell about 12% in fiscal 2002 as customers cut back on technology spending. That was the worst single year. In fact, operating income was higher in fiscal 2002, at about $3.6 billion, than it had been in fiscal 2000.

The problem was the starting price. When the stock peaked in August 2000, Oracle was on its way to earning a split-adjusted $0.44 per share in fiscal 2001, the year then underway. The peak price was more than 100 times those earnings.

However, even a growing business can spend years catching up to a price like that.

By fiscal 2017, revenue had more than tripled from fiscal 2000's $10.2 billion to $37.7 billion, and earnings per share had grown about five times, to $2.21. By the time the stock crossed its old peak in June 2017, it traded at about 21 times earnings.

In other words, the stock didn't so much recover as grow into its old price.

This time, the spending is Oracle's ownThe two declines do share one thing: heavy spending sits at the center of both.

But in 2000, the spending at risk belonged to Oracle's customers, and when they pulled back, revenue dipped. Today the heavy spending is Oracle's own -- and demand is the strong part of the story.

Highlighting that demand, Oracle's fiscal 2026 revenue climbed 17% year over year, to $67.4 billion. Cloud infrastructure revenue did even better, rising 77% to $18.1 billion. Remaining performance obligations (contracted future revenue that hasn't shown up in results yet) ended the year at $638 billion, up from $138 billion a year before. And management expects more, confirming a fiscal 2027 revenue target of about $90 billion, or growth of about 34%.

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Paying for that demand is the hard part. Oracle's operations produced a record $32 billion of cash in fiscal 2026, 54% more than the year before. But capital expenditures jumped 162%, to $55.7 billion, leaving free cash flow at negative $23.7 billion.

The comparison to 2000 breaks down at the valuation, though, and in shareholders' favor. Shares have a price-to-earnings ratio of about 27. Management's fiscal 2027 guidance calls for $8.05 of non-GAAP (adjusted) earnings per share, so buyers today are paying about 20 times those expected earnings. That could prove expensive if the margins on Oracle's artificial intelligence (AI) contracts disappoint, but it's nothing like the triple-digit price-to-earnings multiple of 2000.

Ultimately, the 17-year round trip is arguably a lesson about starting prices more than a warning about Oracle. Still, I wouldn't buy the stock today. A company that spent about $24 billion more cash than its operations brought in last fiscal year carries real risk if AI demand cools.

But for investors who already own the stock, the dot-com comparison seems like a weak reason to sell. The last long wait began at more than 100 times earnings. Today's starting point is nowhere near that.

Citi has flagged AstraZeneca PLC's (LSE:AZN, NASDAQ:AZN) accelerated approval for Etcamah, known chemically as camizestrant, as a meaningful sentiment driver for the shares.

The oral selective oestrogen receptor degrader has been cleared by the US Food and Drug Administration in combination with a CDK4/6 inhibitor for hormone receptor positive, HER2 negative metastatic breast cancer.

The approval applies once an ESR1 mutation is detected during treatment with an aromatase inhibitor and CDK4/6 inhibitor.

It follows a delayed decision date and a negative advisory committee vote of six to three in April, as well as European approval in July.

Citi notes the label is broadly in line with expectations, covering use alongside all three major CDK4/6 inhibitors: abemaciclib, palbociclib and ribociclib.

Patients must be tested using Guardant360 CDx, an FDA-authorised diagnostic approved simultaneously.

As anticipated following the advisory committee hearing, the label carries a boxed warning over QT prolongation and arrhythmia risk, particularly when combined with ribociclib, alongside monitoring requirements.

Citi models the underlying SERENA-6 opportunity at $450 million, risk-adjusted down to $112 million.

That is dwarfed by the potential $6 billion opportunity from SERENA-4, a trial due in the second half of the financial year that could expand Etcamah into the broader first-line HR positive, HER2-negative population.

Citi adds that should SERENA-4 fail, it still sees a $1.5 billion opportunity underpinned by SERENA-6 alone.

Nvidia and Micron Technology are among the most important companies in the artificial intelligence (AI) infrastructure ecosystem, providing mission-critical chips that facilitate the training of large language models (LLMs) and help run inference workloads in data centers.

Nvidia dominates the AI data center accelerator market with an estimated 80% share, which explains why the company has been clocking terrific growth quarter after quarter. Micron, meanwhile, is benefiting from the strong demand for memory chips used by Nvidia and other chip designers to enable the rapid transfer of large data sets in AI data centers.

Importantly, both semiconductor stocks seem capable of delivering solid gains to investors over the long run, driven by their ability to sustain healthy growth rates amid booming demand for AI infrastructure. However, there is another AI infrastructure stock that's outperforming Nvidia and Micron stock this year -- Dell Technologies (DELL +1.50%).

Let's see why that has been the case.

Image source: The Motley Fool.

Strong AI server demand has supercharged Dell's growthDell stock has soared 316% this year, eclipsing the 256% surge in Micron stock and a 23% jump in Nvidia's shares. The booming demand for AI servers, which are used to mount chips designed and manufactured by Nvidia, Micron, and others, has been instrumental in driving Dell's impressive rally.

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Fortune Business Insights estimates that the AI server market could grow from $262 billion in 2026 to $2.85 trillion in 2034 at a compound annual growth rate (CAGR) of nearly 35%. Dell is one of the leading players in this market, which explains why its latest quarterly results crushed Wall Street's expectations.

Dell released fiscal 2027 second-quarter results (for the quarter ended July 31) on Sept. 1. The company's quarterly revenue shot up 58% year over year to a record $47 billion. Dell's non-GAAP earnings-per-share growth was even more stellar at 203%, reaching a record $7.04 last quarter. Analysts would have settled for $4.92 in earnings per share on revenue of $44.9 billion.

Dell noted that it sold $16.4 billion worth of AI servers last quarter. Importantly, the company received a record $60.9 billion in AI server orders during the quarter, suggesting that its future revenue pipeline is expanding at a robust pace. It is also worth noting that Dell finished the quarter with a record AI order backlog of $95 billion.

Management also pointed out that its potential revenue pipeline is in "multiples of our backlog," which isn't surprising, given the tremendous long-term growth opportunity in AI servers. The company now expects its AI server revenue to increase 3x in fiscal 2027 to $74 billion. That's well above the overall AI server market's growth rate.

We have already seen that Fortune Business Insights anticipates the AI server market to clock $262 billion in revenue this year. Dell's AI server revenue forecast for this year suggests that it is on track to control 28% share of this market in 2026. More importantly, it could become a bigger player in the AI server market due to its sizable backlog.

Not surprisingly, analysts are now expecting stronger growth from Dell.

DELL Revenue Estimates for Current Fiscal Year data by YCharts

Robust growth and an attractive valuation suggest more upside for investorsDell has increased its fiscal 2027 guidance. It now expects non-GAAP earnings per share of $25.50 this year, a terrific 148% jump over last year. The following chart suggests that Dell's earnings growth could slow down in fiscal 2028 before accelerating the following year.

DELL EPS Estimates for Current Fiscal Year data by YCharts

However, that's unlikely to be the case. Dell's earnings-per-share growth could be way stronger next year, thanks to the rapid growth of the AI server market and its substantial share of this space. So, don't be surprised to see analysts ramp up their earnings-per-share expectations.

The good part is that Dell trades at an attractive 28 times forward earnings despite its multibagger performance in 2026. That's almost in line with the tech-laden Nasdaq-100 index's forward earnings multiple of 24. It ideally deserves to trade at a premium owing to the triple-digit earnings growth it has been clocking, and its ability to outperform consensus expectations.

Assuming Dell's earnings per share reach $34.56 in fiscal 2029 and it trades at 30 times earnings, this AI stock could jump to $1,037. That's almost double its current stock price, though I won't be surprised to see Dell delivering bigger gains on the back of a potentially larger improvement in earnings.

So, investors looking to add a top AI infrastructure stock to their portfolios right now should take a closer look at Dell, as it is well-positioned to sustain its red-hot rally by capitalizing on the secular growth of the AI server market.

AI cloud revenue surged 687% last year, giving investors a new reason to look at a company once known mainly for Bitcoin mining. Summary

IREN shares have gained about 23% in five days

IREN Ltd. (IREN, Financials) was a simple corporation to describe. It dug Bitcoin. Now investors are beginning to think about something else.

IREN shares have soared roughly 23% in the last five days as Wall Street has paid more attention to the company's fast-growing AI cloud division. The figures explain the excitement.

AI cloud sales climbed to $128.8 million in fiscal 2026 from $16.4 million a year ago. That represents a rise of over 700%. The rest of the quarter was, well, not so impressive.

Revenue declined 27 percent from a year earlier to $137.2 million, and the business reported an adjusted loss of 41 cents a share. But both numbers were better than analysts had predicted. That was enough to push AI back into the spotlight.

Iren controls a lot of electrical infrastructure, which has suddenly become quite valuable as corporations scramble for electricity and data-center capacity for AI.

Bernstein has alluded to the company's aspirations to grow toward about 2 gigawatts of electricity capacity by 2029. That leaves IREN with an interesting second phase.

Bitcoin mining has helped construct the infrastructure. Eventually, AI could be the business that matters most to investors. Next test is if AI cloud revenue can increase quickly enough to justify stock's recent rally.

Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

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Analysts still see substantial upside, but another large share unlock could test the stock this week. Summary

About 319 million additional shares become eligible for sale Sept. 9

SpaceX (SPCX, Financials) has rebounded since its August lows. And now another test. Even after bouncing back to around $147, the stock is still down about 34% from its high of $225.64 in June. Wall Street hasn't abandoned it.

Bernstein has a $248 goal while Oppenheimer recently upped its price target to $280. Both companies see tremendous upside if SpaceX can continue to grow Starlink, improve Starship economics and develop its newer AI opportunities.

But there's something more immediate for investors to look at. Another 319 million shares will become eligible for sale starting Sept. 9. A further tranche of 59 million shares arrives on Sept. 10. That doesn't mean all those shares will be sold.

But it does imply more stock can get into the market. And that incremental supply matters after a tumultuous first few months as a public firm.

The bullish argument for SpaceX is straightforward. It dominates commercial launch. Starlink keeps growing. And AI infrastructure is increasingly seen as another potential growth engine by experts.

Valuation is the tougher question. Investors are paying for a lot of future success already. Over $2 trillion worth. That basic fact makes Sept. 9 crucial.

SpaceX needs purchasers that buy into the long-term story, but not only that. They may also require enough of them to absorb a lot more of the available supplies.

Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

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Nvidia (NVDA +0.84%)'s stock is having another terrific year in 2026, rising by around 24% thus far. Although it was initially off to a poor start, it's beating the market yet again, as the S&P 500 has risen by a more modest rate of 13%.

The tech giant has been leading the artificial intelligence (AI) revolution with its cutting-edge chips, and its recent quarterly results showcased just how strong demand remains, with its growth rate accelerating from the previous quarter.

Currently, the AI stock is trading around $230 as it approaches a new all-time high. Is it still a good buy at its current levels?

Image source: Getty Images.

Nvidia's valuation looks low given the growth it's been generatingAt around $5.6 trillion in market cap, Nvidia is easily the most valuable company in the world. What's striking, however, is just how inexpensive the stock is given its high level of profitability.

The stock trades at a price-to-earnings (P/E) multiple of 29. While that is a bit higher than the S&P 500 average of 24, it's arguably warranted given just how strong its growth has been. Nvidia's revenue for its most recent period, which ended on July 26, totaled $96.2 billion -- a whopping 106% increase year over year. That's a significant acceleration from the 85% growth it reported three months earlier.

Paying such a modest multiple for this type of growth makes Nvidia's stock look like a steal of a deal. CEO Jensen Huang also remains bullish on the future growth of the business, now that AI tokens are paying off. "AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue," Huang stated in the company's earnings release.

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The caveat with Nvidia's stockNvidia has been a growth beast and its business looks as though it's ramping up at a time when many investors may have assumed it might be due for a slowdown, given an increase in competition. In light of its recent numbers, it wouldn't be surprising for Nvidia's stock to continue to hit new heights this year.

The one risk with the stock, however, is that it depends heavily on many interconnected tech companies and on their continued commitment to spending big on AI. If there's a pullback in AI spending, that could have a drastic and sudden impact on Nvidia's growth. While that doesn't appear likely today, if there's an economic downturn or interest rates rise, there may be increased pressure for companies to scale back capital expenditures. It's a risk that investors who buy Nvidia's stock need to be aware of, because while its valuation doesn't look all that high right now, things could change quickly.

TSMC's $265 Billion U.S. Bet Is Becoming Part of Taiwan's Chip Diplomacy Summary

TSMC is investing $265 billion in Arizona

Taiwan Semiconductor Manufacturing Co. (TSM, Financials) has built one of the most prominent positions in global technology over decades. That position is now splitting the organization in two directions.

Taiwan wants to keep innovative chip-making at home. The U.S. and Europe want to produce more of it domestically. TSMC is already reacting.

The business is investing $265 billion in Arizona and other Taiwanese companies are planned another $20 billion in investment in the U.S. It's not only about factories.

TSMC manufactures many of the powerful circuits that fuel the AI growth including chips designed by Nvidia. That makes Taiwan hugely significant in a supply chain that is increasingly seen as strategic by countries. The pressure to move production offshore is only intensifying.

US authorities have cautioned that chip tariffs could hurt companies who do not produce products in the US. Meanwhile, Europe is seeking to attract more investment from Taiwan. The closeness of TSMC to its clients can help offset geopolitical risk.

But there's a catch. It costs more to produce chips outside Taiwan and TSMC's edge has always been about manufacturing efficiency.

That leaves investors with one clear question. TSMC can develop more plants across the world. The harder thing is doing it without throwing out the economics that made the corporation so dominant.”

Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

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Key Takeaways Canadian National moved a record 2.50 MMT of grain in August, topping the prior August record of 2.34 MMT.CNI's added capacity, customer coordination and operating execution supported higher volumes and reliability.CNI's 2026-2027 Grain Plan targets adequate resources and capacity to handle the upcoming harvest. Canadian National Railway (CNI - Free Report) set a new record for grain movement in August 2026. The company moved 2.50 MMT of grain during the month, exceeding the previous August record of 2.34 MMT set in 2020. Strong demand and efficient network operations are likely to remain supportive as the company enters the new crop year.

The record grain movement reflects a robust start to the 2026–2027 crop year as the harvest season advances across Western Canada and new grain starts moving through the supply chain. The strong performance also indicates effective coordination with customers and other supply-chain partners, along with consistent execution of CNI’s operating plan. The company’s ability to unlock incremental capacity supported higher volumes while strengthening service reliability across the grain supply chain.

Looking ahead, Canadian National’s 2026-2027 Grain Plan positions the company to handle the upcoming harvest with adequate resources and capacity. Continued focus on reliable service and operational execution should help CNI capitalize on grain demand and support volume growth in the upcoming crop year.

CNI Share Price PerformanceCNI’s shares have gained 14.3% over the past six months compared with the  Transportation - Rail industry’s 14.2% growth.

CNI Stock’s Six-Month Price Comparison Image Source: Zacks Investment Research

CNI’s Zacks Rank and Stocks to ConsiderCurrently, CNI carries a Zacks Rank #3 (Hold).

Investors interested in the Zacks Transportation sector may consider Expeditors International of Washington, Inc. (EXPD - Free Report) and Seanergy Maritime Holdings (SHIP - Free Report) . 

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

EXPD has an expected earnings growth rate of 28.6% for 2026.  The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 17.15%.

Seanergy Maritime Holdings currently sports a Zacks Rank #1.

SHIP has an expected earnings growth rate of more than 100% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 38%.

Key Takeaways DELL launched the student-focused Dell 14S, pairing portability, battery life and accessible pricing.DELL consumer revenues rose 7% to $1.8 billion, marking a fourth straight quarter of demand growth.DELL's CSG revenues are expected to rise about 15% in fiscal Q3 and grow in the mid-teens for fiscal 2027. Dell Technologies (DELL - Free Report) is benefiting from improving demand across its Client Solutions Group (CSG), supported by PC refresh activity and an expanding consumer portfolio. The company recently introduced the Dell 14S, an affordable lightweight laptop for students and young adults. The device features a 13.5mm aluminum chassis weighing 1.15 kg, four color options and up to 21 hours of battery life. It offers 2K 60Hz and 2.8K 120Hz display options and is powered by Intel Core 5 and Core 7 Series 3 processors. The Dell 14S is expected to become available in North America this fall and complements the premium XPS 13, potentially helping DELL address a broader range of price points and consumer use cases.

The student-focused launch could help DELL sustain consumer demand by combining portability, battery life and premium design with a more accessible price point. The Dell 14S is designed for everyday workloads ranging from classes and study sessions to video calls and multitasking, broadening DELL’s appeal among first-time buyers and younger customers. Expanding its consumer lineup could enhance DELL’s competitive positioning against HP (HPQ - Free Report) and Apple (AAPL - Free Report) , which maintain strong notebook portfolios.

Dell Technologies’ consumer momentum is already improving. In the second quarter of fiscal 2027, consumer revenues increased 7% year over year to $1.8 billion, marking the fourth consecutive quarter of demand growth. Total CSG revenues increased 20% to $15 billion, while operating income reached $1.1 billion, or 7.6% of revenues, benefiting from pricing discipline and greater scale. Dell Technologies’ expects CSG revenues to increase roughly 15% in the fiscal third quarter and grow in the mid-teens for fiscal 2027.

DELL Faces Tough CompetitionHP is strengthening its competitive position through product breadth, artificial intelligence (AI) PCs and aggressive cost optimization. Personal Systems revenues climbed 18% year over year to a record $11.8 billion in the third quarter of fiscal 2026, while consumer revenues increased 10%. HPQ gained share in premium PCs, while AI PCs represented 46% of its mix and are expected to reach 60-70% in 2027. HP is using design-for-cost initiatives and demand shaping to optimize configurations for specific markets, strengthening its ability to compete on value.

APPL presents a particularly strong challenge in education. In the third quarter of fiscal 2026, Mac revenues increased 29% year over year to $10.4 billion, driven by MacBook Neo and MacBook Pro, while Apple recorded its best-ever quarter for customers new to Mac. MacBook Neo is gaining substantial traction in the education market. Pinellas County Schools is transitioning 25,000 students from Windows devices, while other districts purchased thousands of units. Roughly half of large MacBook Neo purchases by U.S. educational institutions displaced Windows and Chromebook devices. Apple Financial Services and the new Apple Upgrade leasing program further strengthen its affordability proposition.

DELL’s Share Price Performance, Valuation & EstimatesShares of Dell Technologies have appreciated 316.3% year to date, outperforming the broader Zacks Computer and Technology sector’s 17.9% growth.

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

DELL stock is trading at a premium, with a forward 12-month price-to-earnings ratio of 18.85 compared with the broader sector’s 20.80. Dell Technologies has a Value Score of C.

DELL’s Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Dell Technologies earnings is currently pegged at $6.64 per share, up by $2.32 over the past 30 days, suggesting 156.37% growth.

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

Key Takeaways AEHR secured $22 million and $41 million in AI-related orders as processor testing demand expands.AEHR is broadening its AI exposure through another processor supplier and a hyperscale customer.AEHR expects fiscal 2027 revenue of $130 million-$150 million as AI testing production ramps up. Aehr Test Systems, Inc. (AEHR - Free Report) is gaining traction in AI semiconductor testing as AI chips become more complex and costly. Its wafer-level burn-in technology allows manufacturers to screen devices before packaging, helping identify early-life failures while protecting costly components and advanced substrates. This is becoming increasingly relevant as AI infrastructure scales and processors enter high-volume production.

The opportunity is already translating into orders. In August 2026, AEHR received a $22 million follow-on order from its lead AI processor customer for FOX-XP wafer-level burn-in systems, with shipments expected within six months. The order followed a $14 million purchase in February, adding to earlier production momentum and reflecting the relationship’s move toward sustained production and broader deployment.

AEHR is also broadening its AI exposure beyond one customer. The company has reported successful wafer-level benchmark results with another major AI processor supplier, which is evaluating pilot production and an additional device. Its Sonoma platform is being deployed for package-level burn-in of high-power AI processors. In April, AEHR secured a record $41 million order from a hyperscale customer for custom AI ASIC burn-in.

The opportunity lies in turning these initial wins into recurring systems, WaferPak contactors and burn-in consumables as AI processor volumes expand. AEHR expects fiscal 2027 revenues of $130 million to $150 million, representing 2.6 to 3 times fiscal 2026 revenues. The company’s AI customer base is still developing, but follow-on orders and expanding production ramps suggest AI testing could evolve from a growth area into a durable revenue stream for AEHR.

AEHR Faces Stiff CompetitionAehr operates in a highly competitive semiconductor test equipment market, contending with strong rivals such as Teradyne, Inc. (TER - Free Report) and FormFactor, Inc. (FORM - Free Report) .

Teradyne is benefiting from strong AI-driven demand across compute and memory testing. TER reported Semiconductor Test revenues of $2.2 billion in the first half of 2026, supported by hyperscaler and AI infrastructure spending, while high-bandwidth memory (HBM) and DRAM testing add another growth avenue.

FormFactor is expanding its role in AI semiconductor testing through advanced probe cards and test solutions for HBM, advanced packaging and silicon photonics. Rising AI chip complexity is increasing test requirements, supporting demand for FORM’s precision testing capabilities across next-generation computing architectures.

AEHR’s Share Price Performance, Valuation & EstimatesAEHR’s shares have surged 111% over the past six months, outperforming the broader industry’s 14.3% growth.

Image Source: Zacks Investment Research

Aehr shares are trading at a premium. In terms of the forward 12-month price-to-sales (P/S), AEHR is trading at 17.51X, higher than the industry’s 5.54X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for AEHR’s fiscal 2027 earnings is pegged at 70 cents per share, a sharp increase from 3 cents a year ago.

Image Source: Zacks Investment Research

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

Shares of chipmaker Marvell Technology (MRVL +7.05%) have soared more than 160% this year, with its market cap now at $200 billion. The company has been experiencing a surge in demand due to artificial intelligence (AI), providing customers with an alternative to chips from both Nvidia and Broadcom.

Marvell has a lot of potential upside, with Nvidia's own CEO Jensen Huang saying earlier this year that it could be the next trillion-dollar company. While that encouraging forecast did give the stock a boost, it's still nowhere near joining the trillion-dollar club.

What may, however, give the stock a further bump up in value is its upcoming Investor Day, which takes place on Oct. 6, as that could result in more positive news and developments for the company's investors to rally around. Is the tech stock worth buying before then?

Image source: Getty Images.

Why Oct. 6 could be a big day for Marvell's stockWhen a company holds an Investor Day, it can be a positive catalyst for the underlying stock, as it highlights what the business is working on and its long-term growth drivers.

Marvell reported its earnings last month and raised its guidance, as it continues to see exceptionally strong demand for its products. In the second quarter of fiscal 2027, which ended on Aug. 1, the company's net revenue rose by 37%, totaling $2.7 billion. Operating income of $460 million also increased by 35% year over year.

"We are seeing broad-based strength across our data center portfolio, including strong demand in connectivity and a significant acceleration in our custom business beginning in the second half of fiscal 2027," the company stated in the press release announcing the results. It also said it would "showcase" its growth drivers at its upcoming Investor Day event.

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Marvell's stock has a lot of upside, but expectations are also highMarvell has a long way to go in catching up to the top chipmakers in the world, but at the same time, it's also not a terribly cheap stock to own given its level of earnings. It's trading at around 70 times its trailing profits and about 50 times its expected future earnings (according to analyst projections). Heading into Investor Day, expectations will be high, so there's no guarantee the stock will rise after the event.

For long-term investors, however, Marvell could be worth buying now, given the need for alternative chip options as companies continue to invest heavily in AI. But investors should also be wary of the risks of doing so, as Marvell's high valuation does mean there will be some risk with this investment.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom, Marvell Technology, and Nvidia. The Motley Fool has a disclosure policy.

Key Takeaways BOOT's merchandise margin rose 220 basis points, aided by tariff refunds and stronger product margins.Strong work boot demand drove sales and attracted new customers despite lower exclusive-brand penetration.BOOT now expects full-year merchandise margin to expand about 60 basis points, excluding tariff refunds. Boot Barn Holdings, Inc.’s (BOOT - Free Report) merchandise margin delivered better-than-expected results in the first quarter of fiscal 2027, with merchandise margin exceeding guidance. Merchandise margin increased 220 basis points during the quarter, driven by a 250-basis-point benefit from tariff refunds and a 60-basis-point expansion in product margin, partly offset by a 90-basis-point headwind from lapping low freight expense in the prior-year period.

Exclusive brands remain an important contributor to merchandise margin expansion. However, stronger-than-expected performance in the work boots business, particularly across third-party brands, resulted in exclusive-brand penetration coming in below expectations during the quarter. Despite the lower exclusive-brand mix, stronger product margins enabled merchandise margin to outperform expectations.

The continued strength of Boot Barn’s work boots business represents a positive development, reflecting healthy customer demand and driving incremental sales. Management also noted that the category is attracting new customers to the Boot Barn brand while further strengthening its position as a leading destination for work boots. Importantly, despite the modest change in exclusive-brand penetration, management now expects full-year merchandise margin to expand by approximately 60 basis points, excluding tariff refunds.

At the high end of fiscal 2027 guidance, merchandise margin is expected to reach approximately 52.2% of sales, up 130 basis points year over year, supported by tariff refunds, product-margin expansion and freight improvement. For the second quarter of fiscal 2027, management expects 51.8% of sales, up 140 basis points year over year, reflecting freight improvement, tariff refunds and product-margin expansion.

Overall, strength of the work boots business and continued product-margin improvement support Boot Barn’s merchandise-margin outlook. Management also identified buying economies of scale, improved full-price selling, supply-chain efficiencies and sourcing initiatives as additional drivers supporting the full-year merchandise-margin outlook.

Zacks Rundown for BOOTBoot Barn’s shares have lost 4.9% in the past three months compared with the industry’s decline of 9.6%.

Image Source: Zacks Investment Research

From a valuation standpoint, Boot Barn trades at a forward price-to-earnings ratio of 16.21, higher than the industry’s average of 12.73. BOOT presently carries a Zacks Rank #2 (Buy).

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BOOT’s current and next fiscal-year earnings implies year-over-year rallies of 22.6% and 10.5%, respectively.

Image Source: Zacks Investment Research

Other Stocks to ConsiderSome other top-ranked stocks have been discussed below:

Victoria’s Secret & Co. (VSXY - Free Report) operates as a specialty retailer of women's intimate apparel and other apparel and beauty products worldwide. At present, VSXY carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for VSXY’s current fiscal-year sales and earnings implies growth of 9.2% and 57.3%, respectively, from the year-ago figures. VSXY has delivered a trailing four-quarter earnings surprise of 48.9%, on average.

FIGS, Inc. (FIGS - Free Report) operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally. At present, FIGS carries a Zacks Rank of 2.

The Zacks Consensus Estimate for FIGS’s current fiscal-year sales and earnings implies growth of 18.2% and 89.5%, respectively, from the year-ago figures. FIGS has delivered a trailing four-quarter earnings surprise of 201.8%, on average.

Fossil Group, Inc. (FOSL - Free Report) designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. At present, FOSL carries a Zacks Rank of 2.

The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the same for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average.

Guidewire Software’s NYSE: GWRE post-release stock plunge looks like a knee-jerk reaction that will soon correct.

Guidewire Software Today

GWRE

Guidewire Software

$162.48 +0.06 (+0.04%)

As of 09/4/2026 03:58 PM Eastern

$102.30▼

$272.6099.68

$216.23

The plunge was caused by tepid guidance linked to a strategic shift from legacy licensing models to cloud-based subscription models, which provide lower revenue but better margins. The downside is tepid topline growth, but what is sluggish growth in the face of wider margins other than an opportunity to improve both?

As it stands, the cloud transition underpins a robust outlook, and its near-term drag on revenue is widely seen as fading. The more critical story is what that transition is now producing: accelerating recurring-revenue growth and improving profitability.

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While adjusted net income grew only 300 basis points faster than revenue, it was impacted by increased investment, and operating income grew more substantially. Up 51.4% year over year (YOY), operating income points to ample cash flow and capital-return capacity over time.

Guidewire Outperforms, Issues Cautious GuidanceGuidewire had a solid quarter despite the impacts of its strategy shift. Revenue grew by 15%, outperforming by 200 basis points (bps), driven by a 32% increase in subscriptions and a 10% increase in services. Licensing, the legacy business, contracted 18% and is expected to continue declining in the upcoming quarters. Cloud annual recurring revenue (ARR), the measure of annual subscription-based sales, grew 35% to 84% of total ARR, providing visibility into future results. It suggests the cloud-based revenue growth will accelerate.

Margins were the sweet spot, up in all comparisons, leaving adjusted earnings at 99 cents, up 22% YOY and a nickel ahead of consensus. The only downside was the impact of capital expenditures (CapEx) and investments, which reduced bottom-line strength.

Cash flow is sufficient to sustain the fortress-like balance sheet while returning capital. Capital returns include aggressive share buybacks, which reduced the share count by 3% YOY as of fiscal Q4, and are expected to continue in future quarters.

The headwind today is that Q1 forecasts were below expectations, but a catalyst for share price recovery is already in play. Guidance is likely to be cautious, given the company’s cloud strengths and cues from other AI-enabled cloud-based software providers, collectively reflecting accelerating demand across the software ecosystem. In this scenario, the company could outperform in the next quarter, causing already-strong full-year guidance to be revised upward.

Analysts Respond With Caution, Outlook Remains BullishThe primary takeaway from analysts' responses to the release was caution centered on the tepid revenue outlook. No downgrades were issued, but numerous price targets were reduced, limiting the upside potential but reinforcing the consensus. Consensus, as reported by MarketBeat, is pegged in the low $220s, indicating a 10% upside relative to the pre-release close and closer to 35% following the release. GWRE stock is likely to remain under pressure over the coming months, without a significant catalyst for a rebound until the Q1 results are released.

Technically, GWRE stock is in the midst of a major reversal, and the post-release plunge aligns with that trend. Price action moved to fresh long-term highs earlier this year, breaking above several resistance targets, including a cluster of moving averages that now form a Golden Cross. As of early September, the story is that GWRE’s market has retreated to the pivot point to retest support, and it is likely to hold.

Institutional activity was bullish ahead of the release and is likely to remain so afterward. Although selling capped gains earlier in the year, the group reverted to an accumulative posture in early Q3, helping drive the stock price through its resistance targets. The likely outcome is that this group buys the dip, potentially accelerating accumulation because of the steep discount.

High-Valuation Versus Deep Moat and VisibilityGuidewire’s biggest risk is its valuation. The stock traded at about 50x earnings ahead of the report, setting the stage for execution-related stock price volatility, which the weak guidance triggered. Investors are getting it wrong, however. Near-term headwinds are easing, and the long-term outlook includes improving margins, cash flow, and capital return, driven by the company's ever-deepening moat.

Guidewire is a mission-critical software layer for insurance companies globally, providing the operating systems for over 500 insurers and counting. It is indispensable to their operations and incredibly costly to change, as it affects 100% of their business. A clear sign of strength is the nearly 100% retention rate, signaling that once onboarded, an insurer is a customer for life. Within that, the company has an unseen growth driver tied to insurance inflation; Guidewire's network earns a toll as inflation costs increase and natural disasters drive activity.

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Key Takeaways On Holding's APAC net sales jumped 43.1% to CHF 170.5M, accounting for 20% of Q2 sales.Greater China beat expectations across channels, while Macau and Tokyo stores supported premium expansion.DTC strength and full-price discipline helped lift gross margin to 65.4% and adjusted EBITDA margin to 19.8%. On Holding AG’s (ONON - Free Report) Asia-Pacific (APAC) business emerged as its fastest-growing region in second-quarter 2026, strengthening the premium sportswear company’s global diversification. APAC net sales surged 43.1% year over year to CHF 170.5 million and climbed 54.7% on a constant-currency basis, comfortably outpacing companywide growth of 13.5% and 21.6%, respectively.

APAC accounted for 20% of quarterly net sales, up from 15.9% a year earlier. By comparison, the Americas and Europe, the Middle East and Africa delivered constant-currency growth of 13% and 20.5%, respectively. During the first half, APAC revenues advanced 43.7% to CHF 344.5 million or 58.1% at constant currency, lifting the region’s sales contribution to 20.5% from 16.2%.

Momentum remained broad-based across Japan, South Korea and Greater China. Greater China exceeded management’s expectations across every channel, with Tmall performing strongly despite On Holding’s decision to avoid promotional activity. Its first Macau store delivered above-average conversion, while two Tokyo locations continued to excel without signs of cannibalization, supporting the case for further premium retail expansion.

Strong direct-to-consumer (DTC) momentum enhances the quality of this regional growth. Companywide DTC sales rose 34.3% at constant currency to CHF 388.4 million and reached a second-quarter record of 45.7% of total sales. A favorable channel mix, full-price discipline and operational efficiencies helped On Holding expand its gross margin to 65.4% and adjusted EBITDA margin to 19.8%.

APAC’s growing scale reduces On Holding’s reliance on the Americas while providing a stronger platform for footwear, apparel and future product launches. Management expects 2026 constant-currency sales growth in the low-20% range, a gross margin of at least 65% and an adjusted EBITDA margin of 19.5-20%. Currency volatility, promotional pressure and controlled wholesale sell-in remain risks, but sustained APAC demand reinforces On Holding’s global growth profile.

DECK & WWW’s Global Momentum vs. ONONDeckers Outdoor Corporation (DECK - Free Report) maintained solid global momentum in first-quarter fiscal 2027, with revenues exceeding $1 billion. International sales rose 8.4% to $502.1 million, outperforming domestic growth of 3.2%. HOKA recorded robust international DTC growth across Europe, China and Japan. UGG’s international growth was led by Asia and effective mono-brand retail execution. Deckers achieved 13% companywide DTC growth, reflecting healthy full-price demand. This broad-based strength positions Deckers for faster growth in the second half.

Wolverine World Wide (WWW - Free Report) delivered solid global momentum in second-quarter 2026, with revenues rising 6.8% to $506.4 million. International revenues increased 10.9% to $277.2 million, outpacing companywide growth and accounting for nearly 55% of sales. Merrell and Saucony recorded respective revenue growth of 11.1% and 9.9%, supported by international wholesale strength. Saucony gained traction across Europe, China and Japan, while Merrell advanced in Europe and key APAC markets. Wolverine achieved double-digit international partner growth for Sweaty Betty across Europe and APAC. This broad-based progress strengthens Wolverine’s global platform and supports its upgraded fiscal 2026 outlook.

ONON’s Price Performance, Valuation & EstimatesOn Holding’s shares have lost 24.6% over the past three months compared with the industry’s 9.6% decline.

Image Source: Zacks Investment Research

From a valuation standpoint, ONON trades at a trailing price-to-sales ratio of 2.08, above the industry’s average of 1.35. 

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ONON’s fiscal 2026 earnings implies year-over-year growth of 78.4%, whereas the same for fiscal 2027 indicates an uptick of 16.1%. Estimates for fiscal 2026 have been revised downward by 4 cents, while those for fiscal 2027 have been revised downward by 15 cents over the past 30 days.

Image Source: Zacks Investment Research

On Holding currently carries a Zacks Rank #5 (Strong Sell).

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

Key Takeaways USA Rare Earth began commercial NdFeB magnet production at its Stillwater facility in Q2 2026.USAR expanded equipment, inventories and construction assets to support production ramp-up.USA Rare Earth ended Q2 2026 with about $1.53 billion in cash to fund manufacturing expansion. USA Rare Earth, Inc. (USAR - Free Report) continues to make steady progress at the Stillwater magnet manufacturing facility in Oklahoma as it ramps up commercial production. The facility is designed to manufacture Neodymium Iron Boron (NdFeB) magnets, which are critical components for defense, aerospace, automotive, industrial and other high-growth end markets. During the second quarter of 2026, the Stillwater facility began commercial production of NdFeB magnets, although the company has not yet started generating revenues from magnet sales as production continues to ramp up.

Throughout the second quarter of 2026, USAR continued to expand the Stillwater facility by advancing building improvements, installing additional manufacturing equipment and increasing inventories to support production ramp-up. The company also continued investing in construction-in-progress assets and equipment deposits as it prepares the facility for higher production volumes.

To support its progress, USA Rare Earth maintained a strong balance sheet, ending the second quarter of 2026 with approximately $1.53 billion in cash and cash equivalents. The company continues to deploy capital toward the Stillwater facility, equipment purchases and the development of its rare earth manufacturing platform, including the planned Blacksburg refined metals facility in South Carolina.

In November 2025, USAR strengthened its vertical integration through the acquisition of Less Common Metals, a rare earth metals and alloys manufacturer in the United Kingdom. The acquisition continues to support the company’s mine-to-magnet strategy by expanding its capabilities in rare earth metals, alloys and strip-cast production for the Stillwater facility.

Snapshot of USA Rare Earth’s PeersAmong its major peers, Trilogy Metals Inc. (TMQ - Free Report) continues to make steady progress at the Ambler mining district. Although Trilogy is not yet in production, it is advancing the Upper Kobuk Mineral Projects through Ambler Metals LLC, its joint venture with South32 Limited. In August 2026, Trilogy executed definitive agreements for a roughly $35.6 million strategic equity investment by the U.S. Department of War to support exploration and development of the projects. The Arctic Project is also progressing through federal and state permitting, with a targeted Record of Decision in September 2028.

USAR’s other peer, NioCorp Developments Ltd. (NB - Free Report) , is working to move its Elk Creek Project in Nebraska closer to production. In August 2026, NioCorp completed an updated feasibility study that envisions a 40-year mine producing eight critical-mineral products, including niobium, scandium, titanium and several rare earth products. NioCorp's study estimates a pre-tax net present value of $4.1 billion, while ongoing mine-portal construction is establishing the future access point to the underground operation.

USAR’s Price Performance, Valuation & EstimatesShares of USAR have gained 48% in the year-to-date period compared with the industry’s growth of 29.5%.

Image Source: Zacks Investment Research

From a valuation standpoint, USAR is trading at a forward price-to-sales ratio of 8.67X compared with the industry’s average of 1.43X. USA Rare Earth carries a Value Score of F.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for USAR’s 2026 earnings has declined over the past 60 days.

Image Source: Zacks Investment Research

Key Takeaways ONDS shares fell 18.2% in a month even as second-quarter revenue surged more than 13-fold year over year.ONDS lifted 2026 revenue guidance to $525-$550 million, with Q3 revenue seen at $140-$155 million.ONDS faces widening losses, heavy cash use and added integration risk from multiple acquisitions. Ondas Inc.'s (ONDS - Free Report) shares have fallen 18.2% in the past month even as its autonomous-systems business scales rapidly. The drop raises a straightforward question: Has the market created a better entry point, or is it discounting risks that still matter?

Image Source: Zacks Investment Research

Revenue growth, backlog and order activity remain powerful supports. Yet losses, heavy cash use and the challenge of integrating several acquisitions keep the risk-reward picture unsettled.

ONDS Growth Still Points Sharply HigherSecond-quarter 2026 revenues reached $83.8 million, up 67% sequentially and more than 13-fold year over year. Management raised its full-year 2026 revenue target to $525-$550 million from at least $525 million.

For the third quarter, revenues are projected at $140-$155 million. The midpoint implies roughly 76% sequential growth.

Ondas Backlog and Orders Support the Growth CasePro forma backlog stood at roughly $757 million as of June 30, including DZYNE and Cyberhawk. On the last earnings call, management noted that Ondas captured $175 million of new orders in the second quarter and another $105 million through the quarter-to-date period.

Its two-year strategic program pipeline exceeded $11 billion across aerial security, intelligence, surveillance and reconnaissance, precision strike and autonomous ground systems. That pipeline is not the same as contracted backlog, but it shows the scale of programs Ondas is pursuing.

ONDS Losses and Cash Burn Keep Pressure ElevatedThe growth has come with a much larger cost base. Second-quarter operating expenses climbed to $199.1 million from $67.3 million in the first quarter, while adjusted EBITDA loss widened to $50.6 million from $10.9 million.

Net cash used in operating activities reached $137.4 million in the first half of 2026 versus $15.1 million a year earlier. Management expects adjusted EBITDA losses to improve sequentially in the third quarter, but consolidated profitability remains a future milestone.

Ondas M&A Raises Both Scale and Execution RiskOndas is integrating World View, Mistral, Omnisys, DZYNE and Cyberhawk while continuing work on earlier acquisitions. That broader platform adds capabilities across precision strike, counter-unmanned aircraft systems, intelligence and critical-infrastructure applications, but it also raises integration and delivery complexity.

AeroVironment, Inc. (AVAV - Free Report) is a relevant comparison point because it also operates across autonomous systems, counter-unmanned aircraft technology, intelligence, surveillance and reconnaissance and precision-strike missions. Red Cat Holdings, Inc. (RCAT - Free Report) likewise targets defense and security customers with small unmanned aircraft focused on intelligence, surveillance and reconnaissance and precision effects, underscoring the competitive intensity around military autonomy.

ONDS Signals Still Favor Caution After the PullbackThe pullback has not clearly turned ONDS into a bargain. The stock trades at 4.9X forward 12-month sales, only slightly below its five-year median of 5.1X and above the S&P 500's 4.8X multiple, while substantial operating losses and cash burn still need to improve.

Image Source: Zacks Investment Research

ONDS currently carries a Zacks Rank #4 (Sell). It also has a VGM Score of F, Value Score of F, Growth Score of F and Momentum Score of C. The Zacks Consensus Estimate for current fiscal-year EPS has deteriorated over the past four weeks.

Image Source: Zacks Investment Research

The Zacks Rank is designed around short-term earnings-estimate revisions, while the Style Scores are complementary indicators of value, growth and momentum characteristics. With a #4 rank and weak Style Scores, the current setup still favors caution rather than treating the decline alone as evidence of value.

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

Key Takeaways Apple's launch may bring the iPhone Ultra, A20 Pro-powered iPhone 18 Pro models and Siri AI.iPhone sales jumped 22% to $54.3B in fiscal Q3, while Apple's total revenues rose 16% to $109.4B.Supply constraints, rising memory prices and a 33.6x earnings multiple raise near-term risks for AAPL. Apple (AAPL - Free Report) has its product launch event, “Surprise and Shine," on Wednesday. This launch will be special as it's the first under CEO John Ternus, who took over from Tim Cook on Sept. 1 after Cook's nearly 15-year run.

Apple is expected to unveil the iPhone 18 Pro and Pro Max, powered by a new A20 Pro chip built on a 2-nanometer process. Design-wise, these models won't stray far from last year's iPhone 17 Pro, though the Pro Max may get a size and weight bump for a larger battery, per MacRumors. New Apple Watch Series 12 and Ultra 4 models are also expected.

The real talking point is Apple's first foldable phone, rumored to be called the iPhone Ultra. It will fold like a book— about 5.5 inches closed and 7.6 inches open. This would be Apple's biggest design change in years, and it would put the company up against Samsung and Google, who already sell foldable phones. One can expect a high price tag for the foldable phone.

Year to date, shares of Apple have risen 18%, outperforming close peers like Alphabet (GOOGL - Free Report) and Microsoft (MSFT - Free Report) .

YTD Price Performance Comparison Image Source: Zacks Investment Research

With shares having a good run and the launch just ahead, investors may be wondering if now's the time to buy. Let's dig deeper.

AAPL's Business Looks Healthy, But Challenges LoomIn the June quarter, iPhone revenues jumped 22% year over year to $54.3 billion, and total revenues rose 16% to $109.4 billion. Management guided 9% to 11% growth for the September quarter, with iPhone revenue growth in the mid-teens. So, demand isn't the problem.

The real issue is supply and cost. Apple has warned that supply chain constraints are expected to hit iPhone, Mac and iPad availability. The main bottleneck is limited capacity for its most advanced chips, and memory prices are expected to keep climbing. June-quarter gross margin came in at 50.1%, aided by tariff refunds, but management expects that to compress to 47%-48% in the fiscal fourth quarter.

Growth Story Intact, But Stock is PriceyApple's long-term story still looks strong— more devices, more AI features, a growing services business, and steady cash returned to shareholders. All these support growth over time.

The Zacks Consensus Estimate for AAPL’s fiscal 2026 and 2027 EPS implies year-over-year growth of 18% and 8%, respectively.

Image Source: Zacks Investment Research

But the stock isn't cheap. Apple trades at about 33.6 times earnings. Compare that to Alphabet at 20.4 times and Microsoft at 24.7 times. Apple is priced much higher than its rivals.

AAPL's P/E F12M Vs. MSFT & GOOGL Image Source: Zacks Investment Research

Our TakeApple has real reasons for excitement— its first foldable phone, a smarter Siri, and a new CEO trying to make his mark. But the stock is already expensive at current levels, leaving little room for mistakes. Add rising costs and supply shortages, and the risk feels higher than the reward right now. It's smarter to wait and see how the launch plays out before jumping in.

Apple is still a good company to hold for the long run but right now, it's not a “Buy.” The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Uber's Delivery Hero deal could expand markets offering both mobility and delivery services from 34 to 58. UBER posted Q2 gross bookings above $58B, up 22% at constant currency, its fourth straight quarter over 20%. Uber's debt, weak share performance and expected 2026 EPS y/y fall support waiting for a better entry point. Uber Technologies (UBER - Free Report) moved a step closer to acquiring Delivery Hero when the latter’s board recommended that shareholders accept its offer. The board recently issued a statement terming Uber’s offer "fair and adequate." The acceptance period for the takeover offer ends on Nov. 5, 2026.

Under the takeover offer, Uber will pay €41.50 per Delivery Hero share, valuing the latter at approximately $14.8 billion, or $13.7 billion after adjusting for the former's existing stake. Before the offer, Uber owned about 24.77% of Delivery Hero's voting shares and had an additional 11.74% economic exposure through equity derivatives. Prosus has agreed to tender its roughly 17% stake, raising Uber's total economic interest to about 53%. The takeover would significantly increase the number of markets where Uber can offer both mobility and delivery services from 34 to 58.

Uber expects the acquisition to strengthen the global technology platform by combining it with Delivery Hero's established local brands, merchant network and delivery capabilities. The combined business is anticipated to enhance consumer choice, improve the Uber One membership proposition and provide merchants with greater demand through Uber's large user base, supported by advertising, promotional and commerce tools. AUber is denser network is also expected to increase order volumes, improve courier utilization and create additional earning opportunities for delivery partners and drivers.

With Uber’s impending acquisition of Delivery Hero taking a major step toward completion, the question is whether it is worth buying UBER stock at current prices. Let us dig deeper to find out.

Further Factors Working in Favor of UBERAV Ambitions Gain Pace: Uber is looking to establish a strong foothold in the lucrative robotaxi space through a partnership-focused approach. To this end, it has recently inked many deals. Earlier this month, Uber and British AI company Wayve have launched supervised autonomous rides in London, making such trips available in the United Kingdom for the first time. Londoners requesting UberX, Uber Electric or Uber Comfort may now be matched with a Wayve vehicle at no additional cost, with fares displayed upfront in the Uber app.

In June, Uber, in collaboration with WeRide (WRD - Free Report) , a Chinese autonomous vehicle company, announced plans to introduce commercial robotaxi services in the Greater Zurich Region. This move represents their second joint deployment in Europe, coming just weeks after the announcement of a similar initiative in Madrid. The service is expected to commence later this year in partnership with Switzerland’s Federal Roads Office, pending regulatory approvals. At launch, passengers will be able to access the robotaxi service through the Uber app. The launch builds on the partners’ growing track record in autonomous mobility.

Since December 2024, WeRide and Uber have introduced robotaxi services across several Middle Eastern markets, including fully driverless commercial operations in Abu Dhabi and Dubai, as well as public services in Riyadh. These deployments provide an operational foundation for their European expansion.

Last month, Uber announced that another Chinese company, Baidu (BIDU - Free Report) , has made its fully autonomous Apollo Go vehicles are available to riders through the former’s platform in Dubai, with New Horizon Luxury Transport operating the fleet. The rollout strengthens Uber’s position in the autonomous-vehicle market and represents an important step in the global expansion of driverless transportation.

Dubai is the first launch location under the companies’ multi-year strategic partnership, which aims to deploy thousands of Apollo Go vehicles of Baidu across Uber’s worldwide network. Uber emphasized that safety remains a central priority. Baidu’s Apollo Go vehicles, like all autonomous vehicles operating through Uber’s network, must comply with its safety guidelines before entering service.

Uber’s dominant market share in the ride-hailing industry also gives it a unique advantage. With its vast network of drivers and customers, Uber can quickly scale autonomous services once the technology matures. Its app is designed to integrate AVs from multiple partners, giving users a variety of options.

Gross Bookings Growth: Uber continues to benefit from robust growth in gross bookings. The company has been recording solid double-digit growth in gross bookings across both its mobility and delivery businesses.

In the second quarter of 2026, gross bookings grew 22% on a constant currency basis year on year to more than $58 billion, above the high end of the company’s guidance and marking the fourth consecutive quarter above 20% growth for this key metric. Trips also accelerated with results benefiting from travel linked to the FIFA World Cup.

Segment-wise, Mobility bookings rose 22% year over year on a reported basis and 20% on a constant currency basis to $28.98 billion, supported by continued demand for rides across Uber’s global platform. Uber’s ride-hailing business benefited from the mega event with millions of tourists taking rides across host cities in the United States, Canada and Mexico.

Delivery gross bookings increased 26% year over year on a reported basis and 25% on a constant currency basis to $27.46 billion, while Freight bookings increased 25% year over year on a reported basis as well as on a constant currency basis to $1.57 billion. Growth across all three offerings demonstrated the breadth of the company’s platform during the quarter.

For the third quarter, Uber expects gross bookings in the band of $58.25-$60.25 billion. The mid-point of the guided range is roughly in line with the Zacks Consensus Estimate of $59.2 billion.

Continued expansion in gross bookings strengthens Uber’s revenue base, improves operating leverage across its platform and deepens network effects among riders, drivers and merchants. This momentum not only supports revenue growth but also enhances the company’s long-term profitability potential by enabling fixed costs to be distributed more efficiently across a larger transaction base.

Earnings History: Uber’s earnings have outpaced the Zacks Consensus Estimate in three of the past four quarters, missing the mark on the other occasion. The average beat is 99.5%.

Growth Opportunity for UBER Is Real, but so Are the RisksAgreed that Uber is benefiting from its AV-related ambitions and gross booking strength. The acquisition of Delivery Hero, if it materializes, would lead to significant expansion for Uber. However, investors should remember that it is facing some headwinds that cannot be ignored.

UBER’s financial metrics indicate that its leverage is elevated and is a massive negative for its shareholders. The long-term debt burden of the company stood at $10.7 billion at the end of the second quarter of 2026, which translates into a long-term debt-to-capitalization of 27.9%. This is reasonable but above the Zacks Internet-Services industry’s 11.8%. UBER’s times interest earned ratio at the June quarter-end was 15.5, which is much lower than its industry, indicating a high risk of default.

Shares of Uber have declined in single digits (% wise) so far this year, underperforming the Zacks Internet-Services industry as well as the S&P 500 index.

YTD Price ComparisonImage Source: Zacks Investment Research

What Do Estimates Suggest for Uber?The Zacks Consensus Estimate for 2026 earnings implies a year-over-year decline of approximately 35%, while 11% growth is indicated in terms of revenues. However, the earnings estimate revision trend is impressive. Earnings per share estimate projections for the current and next quarter, and full-year 2026 and 2027 have improved over the past 60 days.

Image Source: Zacks Investment Research

How to Play UBER Stock Currently?While Uber’s weak stock performance, high debt load, labor unrest and geopolitical woes present near-term challenges, the long-term outlook for the ride-hailing giant remains far from discouraging.

The company’s strategic diversification, AV focus and shareholder-focused initiatives continue to serve as key strengths. With a market capitalization of $154.74 billion, Uber remains well positioned to navigate economic uncertainties. Uber’s ongoing commitment to diversification — through acquisitions, geographic expansion and innovative product offerings — has helped reduce risks and reinforce its competitive standing.

Overall, Uber’s scale, strategic investments and diversification efforts provide a strong foundation for sustained long-term growth. Despite the recent unfavorable price performance, maintaining a position in this Zacks Rank #3 (Hold) stock appears to be a sensible approach for now, while potential investors may prefer to wait for a more attractive entry point.

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

A month has gone by since the last earnings report for Berkshire Hathaway B (BRK.B - Free Report) . Shares have lost about 3% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Berkshire Hathaway B due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

BRK.B Q2 Earnings & Revenues Rise Year Over Year on Diversified Growth

Berkshire Hathaway delivered second-quarter 2026 operating earnings of $13 billion, which increased 16.3% year over year. The increase was due to higher earnings in BNSF; Berkshire Hathaway Energy Company; Manufacturing, service and retailing; and Other.

Behind the HeadlinesRevenues rose 10% year over year to $101.8 billion due to an increase in revenues in Insurance and Other and Railroad, Utilities and Energy. The metric surpassed the consensus estimate by 6.8%.

Costs and expenses increased 8.4% year over year to $86 billion, largely driven by increases in Insurance and Other and in Railroad, Utilities, and Energy.
Segment Performance

Berkshire’s Insurance and Other segment revenues increased 10.1% year over year to $88.5 billion in the reported quarter due to higher insurance premiums earned, sales and service revenues and leasing revenues.

Insurance underwriting produced operating earnings of $1.7 billion, which decreased 13.1% year over year.

Railroad operating revenues rose 14.6% year over year to $6.6 billion, primarily due to increases in car/unit volume of 6.5% in the second quarter as well as an average revenue per car/unit increase of 7.6% in the second quarter primarily from higher fuel surcharge revenues and higher yield. Pre-tax earnings increased 13.9% in the second quarter of 2026.

Operating earnings from the Railroad business increased 12.8% year over year to $2.3 billion.

Total revenues at Manufacturing, Service and Retailing increased 15.2% year over year to $61.5 billion. Pre-tax earnings increased 25.8% year over year to $5.8 billion.

In the second quarter of 2026, after-tax earnings from manufacturing, service and retailing businesses increased 24.1% year over year. Earnings increases in industrial products manufacturing and services businesses drove the increases. 
Results among the numerous operations in the quarter improved, with overall earnings increases in the manufacturing and service businesses and in the retailing businesses.

Financial PositionAs of June 30, 2026, consolidated shareholders’ equity was $750.2 billion, up 4.2% from the level as of Dec. 31, 2025. At the end of the quarter, cash and cash equivalents and restricted cash were $41.4 billion, down 59.1% year over year.

Berkshire exited the second quarter of 2026 with a float of about $177.5 billion, which grew $1.1 billion from Dec. 31, 2025.

Cash flow from operating activities totaled $21.7 billion in the first six months of 2026, up 3.2% from the year-ago period.

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

VGM ScoresCurrently, Berkshire Hathaway B has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors.

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

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

Performance of an Industry PlayerBerkshire Hathaway B belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, NMI Holdings (NMIH - Free Report) , has gained 0.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

NMI Holdings reported revenues of $187.89 million in the last reported quarter, representing a year-over-year change of +8.1%. EPS of $1.38 for the same period compares with $1.22 a year ago.

NMI Holdings is expected to post earnings of $1.30 per share for the current quarter, representing a year-over-year change of +7.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.8%.

NMI Holdings has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

Key Takeaways 3M's Transportation & Electronics revenues rose 6.2% to $2.07 billion in the second quarter.Semiconductor, data center and aerospace markets grew in double digits in the first six months.3M expects 2026 adjusted organic sales growth above 3.5% and adjusted EPS of $8.80-$8.95. 3M Company (MMM - Free Report) is benefiting from persistent strength in the Transportation and Electronics segment. Strong performance across semiconductor, data center, aerospace and commercial branding markets, supported by solid demand for products and broader sales coverage, is augmenting the segment.

In second-quarter 2026, Transportation & Electronics segment’s revenues reached $2.07 billion, up 6.2% from the prior-year period. Organic revenues for the segment rose 5.9% year over year in the quarter. Foreign currency translation contributed a favorable 0.5% impact on revenues, while divestiture had an adverse impact of 0.2%. The segment’s second-quarter operating income increased 5% year over year to $503 million.

In the first six months of the year, 3M’s semiconductor, data center and aerospace markets grew in double digits, while commercial branding increased in the mid-single digits. However, continued softness in auto and consumer electronics markets has been a concern for the segment.

Driven by strength across the majority of its businesses, 3M provided an upbeat outlook for 2026. The company currently expects total adjusted organic sales to increase more than 3.5% year over year, while adjusted earnings are projected to range between $8.80 and $8.95 per share. The midpoint of the guided range is about $8.875, which reflects an increase from earnings of $8.06 per share reported in 2025.

Segmental Performance of MMM’s Peers in Q2Emerson Electric Co. (EMR - Free Report) is witnessing solid momentum in the power and life sciences markets, within the Control Systems & Software group under the Software & Systems segment. Sales from Emerson’s Software & Systems segment increased 11% year over year to $1.64 billion in the third quarter of fiscal 2026.

Honeywell International Inc. (HON - Free Report) is experiencing softness in the Process Automation and Technology segment. In second-quarter 2026, the segment’s organic revenues decreased 1% on a year-over-year basis. This decline was attributable to a 6% drop in organic sales in Honeywell’s aftermarket business owing to lower refining catalyst shipments. Also, reduced customer demand in the Middle East due to ongoing geopolitical tensions hurt Honeywell’s results.

The Zacks Rundown for MMM
Image Source: Zacks Investment Research

Shares of 3M have gained 11.2% in the past six months against the industry’s decline of 21.2%.

Image Source: Zacks Investment Research

From a valuation standpoint, 3M is trading at a forward price-to-earnings ratio of 17.7X, above the industry average of 14.9X. MMM carries a Value Score of D.

Image Source: Zacks Investment Research

Key Takeaways Walmart's global advertising business grew 38% in fiscal Q2 2027 as e-commerce sales rose 23%. Walmart's gross profit rate rose 96 basis points to 25.4%, helped by a favorable ad-driven business mix. Vibe expands Walmart's ad reach but is expected to create a 20-basis-point operating income headwind. Walmart Inc. (WMT - Free Report) is increasingly building advertising into the economics of its digital business, adding a faster-growing revenue stream alongside e-commerce operations. The business is gaining scale across U.S. and international platforms while contributing to a more favorable mix of higher-margin commerce solutions.

In second-quarter fiscal 2027, Walmart’s global advertising business grew 38% year over year. Walmart U.S. advertising, including VIZIO, also increased 38%, led by a 43% rise in Walmart Connect. International advertising advanced 20%, driven by Flipkart Ads. The gains came as global e-commerce sales increased 23%, including 24% growth at Walmart U.S. and 19% internationally.

The profit contribution is becoming more relevant as digital businesses scale. Walmart’s gross profit rate expanded 96 basis points to 25.4%, with the improvement also reflecting a favorable business mix led by global advertising. Adjusted operating income increased 17.4% in constant currency, supported in part by improved incremental margins in digital and strength in high-margin commerce solutions, although tariff refunds were a significant benefit.

Walmart is widening its advertising opportunity through the acquisition of Vibe. The deal expands access to small and medium-sized advertisers through self-service tools and adds measurement capabilities tied to shopping behavior. However, acquisition and integration costs related to Vibe are expected to create an approximately 20-basis-point headwind to fiscal 2027 operating income growth.

Advertising’s growth is helping improve Walmart’s business mix. Its expansion adds a higher-margin commerce solution to the profit mix, although Vibe-related costs will weigh on fiscal 2027 operating income growth.

What Do the Latest Metrics Say About Walmart?Walmart, which competes with Costco Wholesale Corporation (COST - Free Report) and Target Corporation (TGT - Free Report) , has seen its shares gain 4.8% over the past year compared with the industry’s 3.5% growth. Shares of Costco have dipped 5.8%, while Target has surged 79.7% in the aforementioned period.
 

Image Source: Zacks Investment Research

From a valuation standpoint, Walmart's forward 12-month price-to-earnings ratio stands at 34.75, higher than the industry’s 31.79. The company is trading at a premium to Target (with a forward 12-month P/E ratio of 16.8) while trading at a discount to Costco (44.77). 
 

Image Source: Zacks Investment Research