Key Takeaways Nokia's Q2 comparable EPS beat estimates, while revenues rose 8% but missed expectations.NOK saw AI & Cloud demand drive IP Networks and Optical Networks growth in Network Infrastructure.Nokia kept its 2026 operational outlook, with AI & Cloud demand supporting Network Infrastructure growth. Nokia Corporation (NOK - Free Report) reported mixed second-quarter 2026 results, with the bottom line beating the Zacks Consensus Estimate, but the top line missing the same. The company's top line increased year over year, primarily owing to robust growth in Optical Networks and IP Networks within the Network Infrastructure segment, supported by strong AI & Cloud demand.
NOK's Net IncomeNokia reported a net income of €5 million ($5.8 million) or €0.00 per share in the second quarter against a net income of €96 million or €0.02 per share in the year-ago quarter. Accelerated restructuring charges weighed on reported profits despite higher net sales.
Comparable profit was €414 million ($481.4 million) or €0.07 (8 cents) per share, up from €252 million or €0.04 in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate of 7 cents.
NOK's RevenuesQuarterly net sales were €4.82 billion ($5.60 billion), up 8% from €4.44 billion in the year-ago quarter. Growth was primarily driven by strength in the Network Infrastructure segment, fueled by robust demand from AI & Cloud customers. However, revenues missed the Zacks Consensus Estimate of $5.62 billion.
Net sales from Network Infrastructure totaled €2.04 billion ($2.37 billion), increasing from €1.83 billion in the year-ago quarter. On a constant currency basis, IP Networks recorded 16% year-over-year growth, supported by strong AI & Cloud demand and robust order intake. Revenues from Optical Networks surged 20% year over year, driven by AI & Cloud and telecom provider demand, particularly in the Americas. Meanwhile, Fixed Networks declined 2% year over year, reflecting lower sales of consumer-premise fiber products as Nokia continued to prioritize higher-margin offerings, partly offset by stronger operator-premise fiber optical line terminal sales.
Mobile Infrastructure generated revenues of €2.68 billion ($3.12 billion), up 6% year over year on a reported basis and 7% on a constant currency basis. Growth was driven by strength in Radio Networks and Technology Standards, while Core Software recorded modest growth.
Net sales from Portfolio Businesses were €94 million ($109.3 million), up 6% year over year on both a reported and constant currency basis. Growth was primarily driven by Site Implementation and Outside Plant, which also supported a significant improvement in profitability during the quarter.
Technology Standards (reported under Mobile Infrastructure) contributed €407 million ($473.1 million) compared with €357 million in the year-ago quarter. Net sales increased 15% on a constant currency basis, driven by licensing agreements signed during the quarter, including a benefit from catch-up net sales.
Region-wise, net sales from the EMEA region increased to €2.06 billion ($2.39 billion) from €1.91 billion in the year-earlier quarter, reflecting broad-based growth across businesses.
Revenues in the APAC region increased to €982 million ($1.14 billion) from €913 million in the year-ago quarter, supported by growth across both Network Infrastructure and Mobile Infrastructure.
The Americas region generated net sales of €1.78 billion ($2.07 billion), up from €1.62 billion in the prior-year quarter, driven by strong demand in AI & Cloud, particularly for Optical Networks and IP Networks.
NOK's Other DetailsIn the June quarter, the comparable gross margin was 46%, up from 45.3% in the year-ago quarter. Comparable operating profit increased 18% year over year to €434 million ($504.5 million). Comparable operating margin expanded to 9% from 8.3% in the year-ago quarter.
NOK's Cash Flow & LiquidityIn the June quarter, Nokia used €620 million ($720.7 million) in net cash from operating activities. Free cash flow was negative €732 million ($850.9 million), primarily due to working capital outflows, restructuring-related cash charges and capital expenditures.
As of June 30, 2026, the company had €4.35 billion ($5.06 billion) in cash and cash equivalents, with long-term interest-bearing liabilities of €1.92 billion ($2.23 billion).
Outlook of NOKFor 2026, Nokia expects comparable operating profit in the range of €2.1-€2.6 billion, reflecting a technical revision from the previous range following the reclassification of two businesses as discontinued operations. Operationally, the company's outlook remains unchanged. Free cash flow conversion is projected at 55-75% of comparable operating profit, while capital expenditure is estimated to be in the range of €800-€900 million.
The company continues to expect Network Infrastructure net sales to grow 12-14% in 2026 on a constant currency and portfolio basis, including 18-20% growth for the combined IP Networks and Optical Networks businesses, supported by sustained demand from AI & Cloud customers.
NOK’s Zacks RankNOK currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming ReleasesArista Networks Inc. (ANET - Free Report) is scheduled to release second-quarter 2026 earnings on Aug. 8. The Zacks Consensus Estimate for earnings is pegged at 89 cents per share, suggesting growth of 21.92% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 19.86%. The company delivered an average earnings surprise of 8.31% in the last four reported quarters.
Amphenol Corporation (APH - Free Report) is set to release second-quarter 2026 earnings on July 29. The Zacks Consensus Estimate for earnings is pegged at $1.19 per share, implying growth of 46.91% from the year-ago reported figure.
Amphenol has a long-term earnings growth expectation of 24.01%. The company delivered an average earnings surprise of 14.08% in the last four reported quarters.
Corning Incorporated (GLW - Free Report) is set to release second-quarter 2026 earnings on July 28. The Zacks Consensus Estimate for earnings is pegged at 76 cents per share, implying growth of 26.67% from the year-ago reported figure.
Corning has a long-term earnings growth expectation of 23.89%. The company delivered an average earnings surprise of 2.41% in the last four reported quarters.
Boeing (BA) edged out Airbus at the Farnborough Airshow, but the relatively quiet order race showed how much the aerospace industry's priorities have changed.Bo
Nike is trading at a deep discount to its previous highs, potentially undervaluing future earnings. Management is restructuring the business for sustainable long-term growth.
Artificial intelligence has already transformed the markets for semiconductors, networking equipment, and data centers. Now it is reshaping something far less glamorous but arguably even more important: energy.
The race to build AI infrastructure is turning electricity into a strategic asset, and natural gas sits at the center of that equation. While investors have spent the past two years chasing chipmakers, the next bottleneck may not be compute at all. It may be the fuel needed to power it. That shift could create new winners — and expose risks many investors haven’t yet priced into energy and technology stocks.
AI’s Appetite Is Colliding With Energy Reality AI data centers need around-the-clock electricity. Unlike solar or wind generation, natural gas plants can deliver constant baseload power, making them the preferred choice for many new AI campuses.
Matthew Smith, chief investment officer of Chronometer Partners, argued on the Invest Like the Best podcast that the U.S. is heading toward a structural natural gas shortage beginning in 2028. His firm’s 18-month research effort concluded that the country could face a supply deficit even before AI demand reaches full scale.
Here’s what the numbers tell us:
Metric Current Expected by 2030 U.S. natural gas production 110-112 Bcf/day ~132 Bcf/day LNG exports ~15 Bcf/day ~35 Bcf/day U.S. electricity generated by natural gas Over 40% Growing reliance Those figures reveal the problem. Production is expected to rise about 20 Bcf per day, but LNG export commitments alone consume much of that increase before accounting for new AI data centers. According to Smith, the market could create a “knife fight” for available natural gas supplies.
Natural gas producers could benefit from stronger pricing, while utilities owning gas-fired generation may see fuel costs climb. AI hyperscalers could also face a meaningful increase in operating expenses. Smith estimates energy currently represents roughly 10% of AI compute costs but could rise to 20% or even 30% if gas prices were to double or triple over time.
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Conversely, alternative power sources become more attractive as electricity prices increase.
Companies tied to nuclear generation could see greater demand as policymakers look for dependable, carbon-free baseload power. Solar assets also become more valuable when wholesale electricity prices rise because they can capture higher market prices without fuel costs. Meanwhile, equipment suppliers benefiting from today’s AI infrastructure boom could eventually see orders moderate if rising energy costs slow new data center construction.
Granted, this isn’t a near-term certainty. New production, pipeline expansions, or faster permitting could ease some pressure. Even so, LNG export projects already under construction are backed by multibillion-dollar contracts that are unlikely to disappear, limiting the flexibility of domestic supply.
Key Takeaway In short, AI’s biggest constraint may soon shift from chips to energy. Investors have largely focused on Nvidia (NASDAQ:NVDA | NVDA Price Prediction), Advanced Micro Devices (NASDAQ:AMD), and the hyperscalers, but the companies supplying the fuel that powers AI deserve equal attention.
Regardless of whether natural gas prices spike exactly as projected, one conclusion appears difficult to escape: AI is becoming an energy story as much as a technology story. Smart investors should broaden their watch lists beyond semiconductors and consider how natural gas producers, nuclear power companies, and electricity infrastructure providers fit into the next phase of the AI investment cycle.
If the coming battle for energy turns into the “knife fight” some industry experts expect, those sectors may prove just as essential as the processors inside the data centers.
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American Airlines Group Inc (NASDAQ:AAL, XETRA:A1G) shares fell about 8% Thursday after the carrier reported better-than-expected second quarter results but issued a cautious outlook for the third quarter amid rising fuel costs.
The company reported adjusted earnings of $0.15 per share for the quarter, ahead of Wall Street expectations of $0.03 per share.
Revenue reached a record $16.74 billion, up 16.3% from a year earlier and broadly in line with analyst estimates.
The company highlighted strong demand across its commercial operations, with revenue growth across premium, Main Cabin, domestic and international segments. Premium passenger unit revenue increased 13.4% year over year, while Main Cabin passenger unit revenue rose 8.8%. Domestic passenger unit revenue increased 10.6%, while international performance was supported by growth across the Atlantic, Pacific and Latin America regions.
Corporate travel demand also remained strong, with managed corporate revenue rising 26% year over year during the quarter.
However, higher fuel expenses continued to pressure results. American reported fuel costs increased by more than $2.2 billion, or 83%, compared with the same period last year. The company said stronger revenue performance helped offset nearly half of the increase.
“American delivered year-over-year revenue growth of more than 16% in the second quarter, exceeding our initial expectations and continuing the momentum we’ve built across the business,” American CEO Robert Isom said.
“This performance reflects the strength of our commercial strategy, driven by our four pillars: elevate the customer experience, grow the global network, drive premium revenue and lead in loyalty.”
Looking ahead, American expects third quarter revenue to increase 16% to 19% year over year. The company anticipates average fuel prices of about $3.75 per gallon in the quarter and expects costs excluding fuel and profit sharing to rise 2.5% to 4.5%.
American forecast third quarter adjusted earnings per diluted share ranging from a loss of $0.70 to a loss of $0.10, below analyst expectations for a profit of roughly $0.28 per share.
For the full year, the company expects adjusted earnings per diluted share between a loss of $0.65 and a profit of $0.65.
American Airlines Group Inc (NASDAQ:AAL, XETRA:A1G) shares fell about 8% Thursday after the carrier reported better-than-expected second quarter results but issued a cautious outlook for the third quarter amid rising fuel costs.
The company reported adjusted earnings of $0.15 per share for the quarter, ahead of Wall Street expectations of $0.03 per share.
Revenue reached a record $16.74 billion, up 16.3% from a year earlier and broadly in line with analyst estimates.
The company highlighted strong demand across its commercial operations, with revenue growth across premium, Main Cabin, domestic and international segments. Premium passenger unit revenue increased 13.4% year over year, while Main Cabin passenger unit revenue rose 8.8%. Domestic passenger unit revenue increased 10.6%, while international performance was supported by growth across the Atlantic, Pacific and Latin America regions.
Corporate travel demand also remained strong, with managed corporate revenue rising 26% year over year during the quarter.
However, higher fuel expenses continued to pressure results. American reported fuel costs increased by more than $2.2 billion, or 83%, compared with the same period last year. The company said stronger revenue performance helped offset nearly half of the increase.
“American delivered year-over-year revenue growth of more than 16% in the second quarter, exceeding our initial expectations and continuing the momentum we’ve built across the business,” American CEO Robert Isom said.
“This performance reflects the strength of our commercial strategy, driven by our four pillars: elevate the customer experience, grow the global network, drive premium revenue and lead in loyalty.”
Looking ahead, American expects third quarter revenue to increase 16% to 19% year over year. The company anticipates average fuel prices of about $3.75 per gallon in the quarter and expects costs excluding fuel and profit sharing to rise 2.5% to 4.5%.
American forecast third quarter adjusted earnings per diluted share ranging from a loss of $0.70 to a loss of $0.10, below analyst expectations for a profit of roughly $0.28 per share.
For the full year, the company expects adjusted earnings per diluted share between a loss of $0.65 and a profit of $0.65.
Key Takeaways AAL posted record Q2 revenues of $16.74 billion as premium and Main Cabin demand strengthened. Passenger yield rose 11.9%, while premium unit revenues gained 13.4% and corporate revenues climbed 26%. Fuel expense surged 83.3%, squeezing operating margin to 2.7% and prompting cautious 2026 guidance. American Airlines (AAL - Free Report) reported second-quarter 2026 earnings (excluding 4 cents from non-recurring items) of 15 cents per share, down 84.2% year over year but well above the Zacks Consensus Estimate of 3 cents. The result represented a 400% earnings surprise.
Operating revenues rose 16.3% to a record $16.74 billion and surpassed the consensus mark of $16.70 billion by 0.2%. Revenue growth was strong across all entities and cabins, with premium, Main Cabin, domestic and international all increasing meaningfully year over year. Total revenue per available seat mile increased 10.3%.
AAL’s Passenger Revenues Gain on Higher PricingPassenger revenues climbed 15.9% year over year to $15.21 billion. Cargo revenues increased 29.7% to $273 million, while other revenues advanced 17.9% to $1.25 billion.
Passenger yield rose 11.9% to 22.33 cents, reflecting stronger pricing. Passenger revenue per available seat mile increased 10% to 18.59 cents. Revenue passenger miles grew 3.6%, while capacity, measured in available seat miles, expanded 5.4%.The passenger load factor (% of seats filled with passengers) declined 1.5 points to 83.2%.
American Airlines Sees Broad Cabin and Regional StrengthPremium passenger unit revenues increased 13.4% year over year, outperforming an 8.8% rise in Main Cabin unit revenues. Managed corporate revenues advanced 26%, marking the fifth consecutive quarter of double-digit growth.
Domestic passenger revenues rose 17.1% to $10.73 billion, aided by a 10.6% increase in passenger unit revenues. International passenger revenues grew 13.2% to $4.49 billion. Pacific revenues jumped 24.6%, Atlantic revenues increased 12.8% and Latin America revenues improved 11.4%.
AAL Faces a Sharp Increase in Fuel ExpenseTotal operating expenses rose 22.9% year over year to $16.29 billion. Aircraft fuel and related taxes surged 83.3% to $4.88 billion, reflecting a 77.1% increase in the average fuel price to $4.05 per gallon.
Salaries, wages and benefits increased 5.9% to $4.64 billion. Maintenance, materials and repairs rose 10.8% to $1.03 billion, while regional operating expenses increased 7.5% to $1.34 billion. CASM excluding special items, fuel and profit sharing advanced 2.9% to 13.93 cents.
American Airlines’ Margins Contract Despite Revenue GrowthGAAP operating income fell 60.7% year over year to $446 million. The reported operating margin narrowed to 2.7% from 7.9%, as elevated fuel costs outweighed the benefit of record revenues.
Adjusted operating income declined 61.7% to $453 million, while the adjusted operating margin contracted to 2.7% from 8.2%. GAAP net income totaled $71 million, or 11 cents per diluted share, compared with $599 million, or 91 cents, a year earlier.
AAL Expands Loyalty and Improves OperationsAAdvantage enrollments increased more than 30% year over year, while spending on the company’s co-branded Citi credit cards grew 8%. Changes to Basic Economy offerings and checked-bag fees contributed to a 5-point increase in the upsell rate to Main Cabin.
On-time arrival performance improved 2.8 points. The rebanking of the Dallas-Fort Worth hub reduced system misconnections by nearly 25% and helped unit revenues at the hub outperform the system average by 4 points.
AAL Maintains Strong LiquidityAAL ended the quarter with $11.3 billion in total available liquidity. Cash totaled $1.03 billion, while short-term investments were $6.74 billion at the end of June.
Operating cash flow for the first six months of 2026 increased to $4.69 billion from $3.42 billion a year ago. Capital expenditures and aircraft purchase deposits totaled $1.63 billion. The company paid $4.65 billion toward long-term debt and finance leases while issuing $4.52 billion of long-term debt.
AAL Issues Cautious Q3 and 2026 GuidanceFor the third quarter, AAL, currently carrying a Zacks Rank #2 (Buy), expects revenues to increase 16-19% year over year, with capacity growth of 3-5%. CASM excluding special items, fuel and profit sharing is projected to rise 2.5-4.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Management expects third-quarter adjusted results between a loss of 70 cents and a loss of 10 cents per share. The outlook assumes an average fuel price of approximately $3.75 per gallon and a $1.7 billion year-over-year increase in fuel expense. The Zacks Consensus Estimate for third-quarter 2026 earnings is currently pegged at 31 cents per share.
For full-year 2026, American Airlinesnow anticipates adjusted results ranging from a loss of 65 cents to earnings of 65 cents per share. Previously, the carrier had expected adjusted earnings in a range of a loss of 40 cents to earnings of $1.10 per share.
The revised outlook assumes a roughly $6 billion headwind due to high jet fuel prices. The Zacks Consensus Estimate for full-year 2026 earnings is currently pegged at 57 cents per share. Despite strong travel demand and rising ticket prices, American Airlines and other airline operators are grappling with the volatility of fuel prices, resulting in an uncertain environment.
Q2 Performance of Other Airline CompaniesDelta Air Lines (DAL - Free Report) reported second-quarter 2026 earnings (excluding 88 cents from non-recurring items) of $1.56 per share, beating the Zacks Consensus Estimate of $1.51. Earnings declined in double digits (% wise) from a year ago as sharply higher fuel costs pressured profitability.
Revenues rose on a year-over-year basis to $17.67 billion but missed the consensus estimate of $17.76 billion. Broad demand strength lifted adjusted total revenue per available seat mile (“TRASM”), 12.4%, while premium and diversified revenue streams continued to expand.
United Airlines (UAL - Free Report) reported second-quarter 2026 adjusted earnings of $1.99 per share, down 48.6% year over year but above the Zacks Consensus Estimate of $1.92 by 3.7%.
Operating revenues rose 16% to $17.67 billion and were essentially in line with the $17.68-billion consensus mark. A 12.1% increase in TRASM and broad-based gains across premium, loyalty and cargo revenues supported the top line despite sharply higher fuel costs.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.
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HomeIndustriesTelecommunicationsThe Ratings GameThe Ratings GameHowever, that doesn’t mean Starlink won’t be an overhang on wireless stocksJuly 23, 2026, 1:57 p.m. ET
SpaceX’s Starlink business has cast a shadow over AT&T’s stock recently, but a Wolfe Research analyst says investors are worrying prematurely — if they even have to be concerned at all.
“Starlink may bully its way into mobility, but it would take years to acquire and clear the right spectrum,” Wolfe’s Peter Supino wrote in a note to clients titled “Starlink Shmarlink!”
Key Takeaways V reports fiscal Q3 results on July 28 with the consensus mark suggesting 8.4% EPS and 11.6% revenue growth.V has a positive Earnings ESP, a favorable rank and has topped earnings estimates for four straight quarters.Payment volumes, cross-border spending and digital payments to support Visa's quarterly growth. Visa Inc. (V - Free Report) is set to report its third-quarter fiscal 2026 results on July 28, 2026, after market close. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $3.23 per share on revenues of $11.35 billion.
The estimate for fiscal third-quarter earnings has witnessed one upward movement and no downward revisions over the past 60 days. The bottom-line projection indicates a year-over-year increase of 8.4%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 11.6%.
Image Source: Zacks Investment Research
For fiscal 2026, the Zacks Consensus Estimate for Visa’s revenues is pegged at $45.37 billion, implying a rise of 13.4% year over year. The consensus mark for EPS is pegged at $13.13, suggesting a jump of around 14.5% on a year-over-year basis.
The payments juggernaut has a robust history of surpassing earnings estimates. It beat estimates in each of the last four quarters, with the average being 3.2%???. This is depicted in the graph below:
Q3 Earnings Whispers for VisaOur proven model predicts a likely earnings beat for the company this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is precisely the case here.
Visa has an Earnings ESP of +0.12% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping Visa’s Q3 ResultsThe Zacks Consensus Estimate suggests a 7.2% increase in total Gross Dollar Volume from the previous year, while our model predicts 7.3% growth. The growing adoption and popularity of digital payment methods are likely to contribute positively to Visa's overall fiscal third-quarter results.
As the company draws revenues as a set percentage of total transaction value every time a customer makes payments with a debit/credit card, higher spending means more revenues in the form of transaction processing fees. The Zacks Consensus Estimate for fiscal third-quarter total processed transactions implies 9.2% year-over-year growth.
The consensus mark for total payment volumes indicates an 8.8% year-over-year increase. We expect the metric for U.S. operations alone to jump nearly 7% year over year. Similarly, our model predicts 14% year-over-year growth in Latin America and 14.6% in CEMEA.
The Zacks Consensus Estimate for data processing revenues indicates 13.6% growth in the fiscal third quarter from the year-ago level of $5.15 billion, while our estimate suggests a 15.3% increase. Similarly, the consensus mark for service revenues suggests 12% year-over-year growth, whereas we expect the metric to grow 13% from $4.33 billion.
Furthermore, the consensus estimate for international transaction revenues indicates 7.9% growth from a year ago. Continuous growth in cross-border volumes is expected to have supported the metric. The FIFA World Cup 2026 event is likely to have provided a boost in June 2026.
The factors stated above are expected to have positioned Visa for strong year-over-year growth in the fiscal third quarter and an earnings beat. However, rising expenses and client incentives (a contra-revenue item) are likely to have partially offset the positive impact of higher volumes.
We expect adjusted total operating expenses for the quarter under review to increase 15.9% year over year due to increased Personnel, Professional Fees, Marketing, and Network and Processing expenses. Also, the Zacks Consensus Estimate for client incentives is pegged at $4.58 billion for the to-be-reported quarter.
Visa Price Performance & ValuationVisa's stock has gained only 0.8% in the year-to-date period. It still outperformed the industry’s 10.1% fall butunderperformed the S&P 500’s increase of 9.3%. In comparison, its peers like Mastercard Incorporated (MA - Free Report) and American Express Company (AXP - Free Report) have decreased 6.8% and 5.7%, respectively, during this time.
YTD Price Performance – V, MA, AXP, Industry & S&P 500 Image Source: Zacks Investment Research
Now, let’s look at the value Visa offers investors at current levels.
The company’s valuation looks somewhat stretched compared with the industry average. Currently, Visa is trading at 24.34X forward 12-month earnings, above the industry’s average of 16.95X, but still remains below its five-year median of 25.82X.
Image Source: Zacks Investment Research
In comparison, Mastercard is trading at 24.93X forward 12-month earnings. American Express, on the other hand, is trading at 18.25X now.
How Should You Play Visa Ahead of Q3 Earnings?Visa enters its fiscal third-quarter earnings report with several factors working in its favor. The company has consistently delivered earnings beats, carries a Zacks Rank #2, and has a positive Earnings ESP, a combination that historically increases the likelihood of another earnings surprise. Healthy payment volumes, resilient cross-border spending, expanding Value-Added Services and growing stablecoin initiatives should continue supporting solid revenue and earnings growth. The FIFA World Cup-related travel activity in June may have provided an additional boost to international transaction revenues.
Beyond the quarter, Visa's long-term investment case remains compelling. The company continues to benefit from the secular shift toward digital payments while successfully expanding into adjacent businesses such as fraud prevention, data services and blockchain-based settlement infrastructure. Its strong cash generation also enables substantial share repurchases and dividend growth, reinforcing shareholder returns.
That said, investors should not ignore the risks. Regulatory scrutiny in the United States and overseas, rising operating expenses, higher client incentives and increasing competition from fintechs and real-time payment networks could weigh on margins over time. In addition, Visa's valuation remains above the industry average, leaving less room for disappointment if results or guidance fall short of expectations.
Overall, with favorable estimate revisions and durable business fundamentals, Visa appears well-positioned heading into earnings. Existing investors should remain confident, while prospective investors may find the stock attractive as the long-term growth story remains intact.
Key Takeaways PG is set to report Q4'26 results, with 2.3% y/y sales growth expected.PG faces margin pressure from commodity costs, tariffs and higher financing expenses.PG's innovation and pricing strength continue supporting steady organic sales growth. The Procter & Gamble Company (PG - Free Report) , also known as P&G, is set to report fourth-quarter fiscal 2026 results on July 29, before the opening bell. The company is expected to have witnessed year-over-year sales growth in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $21.4 billion, indicating a 2.3% rise from the prior-year quarter’s reported figure. The consensus mark for PG’s earnings is pegged at $1.41 per share, indicating a decline of 4.7% from the year-ago quarter’s actual. The consensus mark for earnings has moved down by a penny in the past seven days.
The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $87.1 billion, indicating a 3.3% rise from the prior-year quarter’s reported figure. The consensus mark for PG’s earnings is pegged at $$6.88 per share, indicating a rise of 0.7% from the year-ago quarter’s actual. The consensus mark for earnings has moved down 0.3% in the past 30 days.
PG has a trailing four-quarter earnings surprise of 2.7%, on average. The company delivered an earnings surprise of 1.9% in the third quarter of fiscal 2026.
PG’s Q4 Earnings WhispersOur proven model does not conclusively predict an earnings beat for Procter & Gamble this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Procter & Gamble currently has an Earnings ESP of -0.23% and a Zacks Rank #4 (Sell).
Key Trends to Watch Ahead of PG's Q4 EarningsProcter & Gamble’s fourth-quarter fiscal 2026 results are expected to reflect the mounting pressures from elevated commodity costs, rising tariffs and higher financing expenses, which are expected to have weighed on its margin performance. The gross margin has been contracting despite productivity gains, while tariff headwinds and higher interest and taxes threaten earnings growth.
On the last reported quarter’s earnings call, management acknowledged ongoing pressure from raw materials, packaging, transportation and other supply-chain-related expenses, which have been weighing on the cost of goods sold and limited margin expansion. Management maintained its fiscal 2026 outlook, but earnings are expected to trend toward the lower end of 1-6% growth, as cost headwinds persist and investments step up.
PG projects all-in sales growth of 1-5% for fiscal 2026, including an estimated one-percentage-point tailwind from foreign exchange, acquisitions and divestitures. Organic sales growth is expected to be in line with or rise 4%.
We expect the core cost of products sold to increase 2.6% year over year in fourth-quarter fiscal 2026. Our model predicts the core gross margin to contract 20 bps year over year to 48.9%.
Management also highlighted that trade-related costs are creating incremental pressure on sourcing, manufacturing and cross-border supply chains. Given PG’s global footprint, tariffs can disrupt cost structures across multiple categories and geographies, limiting the company’s ability to fully offset impacts through productivity alone. While selective pricing actions and supply-chain adjustments provide partial mitigation, tariffs remain largely outside management’s control and can compress margins if sustained.
However, PG’s resilient performance underscores the power of its brand portfolio and disciplined operating strategy. Despite a mixed consumer backdrop, the company continues to generate steady organic sales, supported by pricing strength and broad-based category growth. Procter & Gamble continues to leverage its strong portfolio of daily-use products, wherein performance directly drives consumer brand choice, to deliver steady organic growth.
Our model predicts year-over-year organic sales growth of 0.4% for PG in the fourth quarter and 1.3% for fiscal 2026. Our model estimates organic sales growth of 2% for Beauty and 1% for the Fabric & Home Care segment, with flat organic sales for the Health Care segment. Organic sales for the Fabric & Home Care, and the Grooming segments are expected to decline 1% each in the fiscal fourth quarter.
The company’s integrated strategy, built on innovation, market expansion and productivity, has enabled it to adapt to shifting consumer dynamics and maintain competitiveness.
Innovation execution is a key swing factor. The company is rolling out major product upgrades and new formats across core franchises, with management repeatedly emphasizing that sustainable growth will come from superior performance rather than price-led tactics. PG’s focus on core categories and innovation continues to fuel performance, likely aiding organic sales in the fiscal third quarter.
Procter & Gamble’s Price Performance & ValuationPG shares have gained 4% in the year-to-date period compared with the industry’s return of 2.6%. However, the stock has underperformed the Zacks Consumer Staples sector and the S&P 500’s growth of 8.4% and 9.5%, respectively.
PG’s YTD Performance
Image Source: Zacks Investment Research
From the valuation standpoint, Procter & Gamble is trading at a forward 12-month P/E multiple of 21.1X, exceeding the industry’s average of 18.64X but below the S&P 500’s average of 20.85X. PG’s valuation appears pricey relative to the industry.
Image Source: Zacks Investment Research
Given the premium valuation, investors may face significant risks if the company's future performance does not meet expectations. The consumer goods market is becoming increasingly competitive, and Procter & Gamble’s innovation and market expansion may not suffice to drive significant growth. Macroeconomic challenges and heightened competition may impede the company's ability to sustain its current growth trajectory.
Stocks With the Favorable CombinationHere are some companies, which, according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Fomento Economico Mexicano (FMX - Free Report) currently has an Earnings ESP of +37.42% and sports a Zacks Rank #1. The company is likely to register growth in the top and bottom lines when it reports second-quarter 2026 numbers. The consensus mark for revenues is pegged at $12.9 billion, which indicates a rise of 19.3% from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FMX’s quarterly earnings per share of 82 cents implies growth of 95.2% from the year-ago quarter’s actual. The consensus mark has moved down 10.9% in the past 30 days. FMX has a trailing four-quarter negative earnings surprise of 17%, on average.
Newell Brands Inc. (NWL - Free Report) currently has an Earnings ESP of +5.36% and a Zacks Rank #2. The company is likely to register growth in the top line when it reports second-quarter 2026 numbers. The consensus mark for revenues is pegged at $1.97 billion, which indicates growth of 1.7% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for Newell Brands’ quarterly earnings per share of 19 cents implies a decline of 20.8% from the year-ago quarter’s actual. The consensus mark has been unchanged in the past 30 days. NWL has a trailing four-quarter earnings surprise of 9.7%, on average.
Church & Dwight Co. Inc. (CHD - Free Report) currently has an Earnings ESP of +0.65% and a Zacks Rank #3. The company is likely to register declines in the top and bottom lines when it reports second-quarter 2026 numbers. The Zacks Consensus Estimate for CHD’s quarterly EPS is pegged at 89 cents, down 5.3% from the year-ago period. The consensus mark has been unchanged in the past 30 days.
The consensus estimate for CHD’s quarterly revenues is pegged at $1.5 billion, which implies a decline of 0.2% from the prior-year quarter. Church & Dwight has a trailing four-quarter earnings surprise of 6.5%, on average.
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Apple and Ford are working together on software systems for future vehicles. AP/Getty/Business Insider Apple is moving deeper into Ford's cars.
On Thursday, the companies announced that Ford will integrate Apple Maps into the next generation of its lower-cost electric vehicles, called the universal EV platform.
The deal gives Apple a much larger role in Ford's next-generation electric vehicles. Their partnership has historically centered on CarPlay, the tech giant's phone-projection system. Apple's new partnership will now power built-in navigation and help inform Ford's next hands-free driving system.
And there's a big change for Android users: Drivers will not need an iPhone to use Apple Maps.
The navigation system will run natively on the vehicle's displays and communicate with other parts of the car, providing traffic information, destination searches, EV route planning, and battery preconditioning.
Ford tells Business Insider that the system could also enable location-aware features, such as automatically opening a driver's garage door when the vehicle arrives home.
That tech is set to debut in the yet-unveiled $30,000 EV pickup truck, which is expected to reach dealerships in 2027.
The partnership will also extend into autonomous driving tech. Ford's Latitude AI subsidiary will use road-level information from Apple Maps to develop a next-generation hands-free driving experience.
The companies said the system is intended to work seamlessly from a highway's entrance ramp to its exit ramp.
"This partnership is designed to make advanced technology simple, useful, and intuitive in our customers' everyday lives," a Ford representative said in a statement sent to Business Insider.
Technology is at its best when it feels simple, intuitive and genuinely useful. That’s the idea behind our new midsize electric vehicle, the first on our Universal Electric Vehicle Platform.
To give @Ford customers the ultimate driving experience, we’re proud to be working with… pic.twitter.com/NMgvGfUplQ
— Jim Farley (@jimfarley98) July 23, 2026 The partnership puts Ford on a very different technology path compared to its EV rivals.
Its decade-old Detroit nemesis, General Motors, has moved away from Apple CarPlay in its newer EVs — and GM CEO Mary Barra has said it plans to eventually phase out both CarPlay and Android Auto across its entire lineup.
GM is instead building around its own interface and Google's automotive software, and has highlighted its software business as a high-margin profit driver during recent earnings calls.
Tesla and Rivian have also resisted adding Apple's software into their vehicles, preferring to control their vehicles' central screens and software ecosystems. Both offer individual Apple services or integrations: Rivian added a native Apple Music app and Apple Key integration, while Tesla lets owners use its vehicle app through the Apple Watch.
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Ben Shimkus You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Ben Shimkus is a reporter for the Business News desk. He writes about cars, transportation, retail, and jobs. Ben's reporting has appeared in Rolling Stone, The Verge, Automotive News, USA Today, AutoBody News, LGBTQ Nation, TopSpeed, and Out Magazine. He's also held staff writing positions at The U.S. Sun and the Daily Mail. He graduated from NYU with a Master's in journalism in 2024. Email Ben at [email protected] or message him privately on Signal at bshimkus.41.
Key Takeaways GM beat Q2 earnings estimates and appears better positioned on stronger fundamentals and clearer visibility.Tesla posted record deliveries, but higher SG&A and R&D costs drove a 57% drop in operating income.GM's pricing discipline, $6.3B in first-half free cash flow and 0.39 forward sales multiple support its edge. U.S. legacy automaker General Motors (GM - Free Report) and electric vehicle (EV) and tech giant Tesla (TSLA - Free Report) have released their second-quarter 2026 results. While General Motors surpassed earnings estimates, Tesla missed expectations despite record deliveries as higher SG&A and R&D expenses drove a 57% year-over-year decline in operating income.
Tesla is betting high on autonomous vehicles (AVs) and humanoid robots as its next growth frontier. It is ramping up its unsupervised robotaxi ambitions and riding on increasing FSD (Full Self Driving) subscriptions. Meanwhile, General Motors is benefiting from strong demand for full-size pickups, SUVs and commercial fleet vehicles. The company has maintained pricing discipline instead of relying on heavy discounts, which is supporting margins.
Year to date, shares of Tesla have lost 17%, while GM has inched up roughly 1%. Let’s compare their growth drivers and challenges to see which stock is placed better post second-quarter results.
Image Source: Zacks Investment Research
The Case for TeslaTesla’s EV sales are showing signs of stabilization, with second-quarter deliveries reaching a record 480,126 vehicles, supported by growth across major regions and stronger Model Y demand. A rising order backlog and increased FSD adoption provide better volume visibility, although sustained growth will depend on pricing discipline and product execution.
Beyond vehicles, Tesla’s Energy Generation and Storage business remains an important diversification opportunity. Storage deployments increased 41% year over year to 13.5 GWh in the second quarter of 2026, while revenues grew to $3.14 billion. Demand for Megapack and Powerwall, supported by data center growth and broader electrification trends, could create a meaningful long-term growth avenue.
Tesla’s biggest upside opportunity lies in autonomy, software and robotics. Robotaxi service is now live in seven U.S. metros, with unsupervised operations ramping in Austin, Dallas, Houston, Miami, Orlando and Tampa. Tesla reported more than 380,000 unsupervised Robotaxi miles across six cities with no notable incidents. Cybercab production has also begun, and Optimus manufacturing lines have been installed, strengthening Tesla’s long-term vision.
However, execution risks remain significant. Tesla’s 2026 capital spending is expected to exceed $25 billion, putting pressure on free cash flow, which turned negative in the second quarter. Energy margins also remain volatile, while declining regulatory credit revenue removes a previous earnings support. Lower vehicle pricing is weighing on automotive gross margins.
Competition in EVs is intensifying, and Tesla is attempting to scale multiple businesses simultaneously. While autonomy, AI and robotics offer huge long-term potential, they also require significant investment and successful execution. Tesla’s balance sheet and technology advantages provide a strong foundation, but the stock’s future returns will depend on whether these emerging businesses can eventually justify the current level of investment and expectations.
The Case for General MotorsGeneral Motors is benefiting from its leadership position in the U.S. market. It has maintained pricing discipline, keeping incentives below industry averages for more than three years, which has supported profitability despite inflationary pressures. GM North America EBIT-adjusted margin improved to 8.6% in the second quarter, returning to its target range, while the upcoming next-generation Chevrolet Silverado and GMC Sierra launches and additional full-size SUV capacity could support future growth.
GM is also making progress in areas that can diversify earnings. Its China operations returned to profitability after restructuring efforts, with equity income improving year over year. Meanwhile, software and digital services represent a long-term opportunity. Growing OnStar subscriptions and Super Cruise adoption could create higher-margin recurring revenue streams, with recognized and deferred software revenues expected to expand meaningfully. New businesses such as GM Energy, GM Defense and GM Insurance further strengthen the company’s ability to generate revenues beyond vehicle sales.
Strong cash generation also bodes well. GM generated $6.3 billion in adjusted automotive free cash flow during the first half of 2026 and continued aggressive share repurchases while maintaining a strong automotive cash balance. The company’s raised 2026 outlook reflects improving execution and confidence in its core operations.
However, near-term challenges remain. Tariffs, commodity inflation and onshoring costs are expected to weigh on profitability, while major truck launches could create temporary production disruptions. EV weakness has also forced GM to restructure its battery and manufacturing footprint, resulting in significant charges. Shipping disruptions affected wholesale volumes in the Middle East, and management expects conditions in the region to remain uncertain.
Overall, GM’s strong U.S. franchise, improving cost discipline and shareholder returns provide a solid foundation. However, near-term cost pressures and EV-related challenges remain.
Valuation & Estimates CheckGM is trading at a forward sales multiple of 0.39. Tesla, meanwhile, trades at a significantly higher valuation, reflecting investor expectations for its AI and autonomous driving businesses. With Tesla continuing to invest aggressively and many of its AI initiatives still years away from generating meaningful earnings, the valuation leaves relatively little room for execution missteps. While GM carries a Value Score of A, Tesla has a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for GM and TSLA’s 2026 EPS has moved up by 3 cents each to $12.88 and $2.16, respectively, over the past seven days.
Our TakeBoth Tesla and GM carry a Zacks Rank #3 (Hold) but the risk-reward profiles are different. Tesla offers significant upside if autonomy, AI and robotics develop as management expects, but investors are paying a premium for businesses that still require substantial execution.
General Motors, meanwhile, is delivering stronger fundamentals today, supported by its profitable core business, disciplined operations and shareholder returns at a much lower valuation. With fewer execution hurdles and clearer earnings visibility, GM appears better positioned post second-quarter results.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
I reiterate a Strong Buy on General Motors with a $104 price target, reflecting 30% upside from $80. The next-generation Silverado and Sierra cycle, higher full-size SUV availability, OnStar growth, lower EV losses and continued share repurchases should drive adjusted EPS toward my 2027 estimate of $14.88. I arrive at my price target by applying a 7x FWD non-GAAP P/E to my 2027 estimated EPS of $14.88.
Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Goldman Sachs (GS - Free Report) , a company that currently holds a Momentum Style Score of A. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Goldman Sachs currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market? In order to see if GS is a promising momentum pick, let's examine some Momentum Style elements to see if this investment bank holds up.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For GS, shares are up 0.95% over the past week while the Zacks Financial - Investment Bank industry is up 0.22% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 1.98% compares favorably with the industry's 3.67% performance as well.
While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Over the past quarter, shares of Goldman Sachs have risen 21.27%, and are up 53.06% in the last year. On the other hand, the S&P 500 has only moved 5.37% and 20.16%, respectively.
Investors should also take note of GS's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now GS is averaging 1,972,181 shares for the last 20 days..
Earnings OutlookThe Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with GS.
Over the past two months, 7 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost GS's consensus estimate, increasing from $59.53 to $68.83 in the past 60 days. Looking at the next fiscal year, 7 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom LineTaking into account all of these elements, it should come as no surprise that GS is a #1 (Strong Buy) stock with a Momentum Score of A. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Goldman Sachs on your short list.
Key Takeaways CINF is expected to post $3 billion in Q2 revenues, up 8.4%, while EPS is expected to be $1.82, down 7.6%.Premiums may rise on pricing, exposure growth, new business and stronger Cincinnati Re contributions.Higher bond yields may lift investment income, but rising losses and operating costs could pressure results. Cincinnati Financial Corporation (CINF - Free Report) is expected to witness an improvement in its top line but a decline in its bottom line when it reports second-quarter 2026 results on July 27, after the opening bell.
The Zacks Consensus Estimate for CINF’s second-quarter revenues is pegged at $3 billion, indicating 8.4% growth from the year-ago reported figure.
The consensus estimate for earnings is pegged at $1.82 per share. The Zacks Consensus Estimate for CINF’s second-quarter earnings has moved 5 cents north in the past seven days. The estimate indicates a year-over-year decline of 7.6%.
Solid Earnings Surprise HistoryCINF’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 27.54%.
What the Zacks Model Unveils for CINFOur proven model predicts an earnings beat for Cincinnati this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the chances of an earnings beat.
You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Earnings ESP: CINF has an Earnings ESP of +7.22%. This is because the Most Accurate Estimate of $1.96 is pegged higher than the Zacks Consensus Estimate of $1.82.
Zacks Rank: CINF carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Shape Q2 ResultsPremiums are likely to have benefited from greater exposure, improved pricing, higher property and casualty agency new business, increased standard-lines new business, stronger contributions from Cincinnati Re, agent-centered model and policy-by-policy pricing. The Zacks Consensus Estimate is pegged at $2.7 billion.
Performance at Personal Lines is likely to have benefited from higher rates, a higher level of insured exposures, increased policy retention rates and changes in policy deductibles or mix of business. The Zacks Consensus Estimate for Personal Lines revenues is pegged at $898 million.
Better agency renewal and new business written premiums due to higher renewal pricing are likely to have favored premiums at Excess and Surplus lines. The Zacks Consensus Estimate for Excess and Surplus lines revenues is pegged at $191 million.
Robust operating cash flow and higher bond yields are expected to have boosted net investment income. The Zacks Consensus Estimate for investment income, net of expenses, is pegged at $313.5 million.
However, total benefits and expenses are likely to have risen due to higher insurance losses, policyholder benefits, underwriting and acquisition costs, interest expense and other operating expenses.
Disciplined underwriting and a favorable catastrophe environment are likely to have supported underwriting profitability.
Other Stocks to ConsiderSome other P&C insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
Axis Capital Holdings (ACGL - Free Report) has an Earnings ESP of +3.82% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at $3.23 per share, indicating a 1.8% year-over-year decrease.
ACGL’s earnings beat estimates in the last four reported quarters.
The Hanover Insurance (THG - Free Report) has an Earnings ESP of +2.39% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at $3.88 per share, indicating a 10.1% year-over-year decrease.
THG’s earnings beat estimates in the last four reported quarters.
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +2.59% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at $5.61 per share, indicating a 5.6% year-over-year decrease.
ALL’s earnings beat estimates in the last four reported quarters.
Key Takeaways QCOM to report fiscal Q3 2026 earnings on July 29, with sales estimated at $9.71 billion and EPS at $2.22.Qualcomm expanded Snapdragon across smartphones and AI PCs, supporting broader market reach.QCOM faces smartphone competition, pricing pressure and mixed Android demand despite AI momentum. Qualcomm Incorporated (QCOM - Free Report) is scheduled to report third-quarter fiscal 2026 earnings after the closing bell on July 29. The Zacks Consensus Estimate for sales and earnings is pegged at $9.71 billion and $2.22 per share, respectively. Earnings estimates for QCOM for fiscal 2026 have increased 0.4% to $10.78 over the past 60 days, and those for fiscal 2027 have also increased 1.7% to $10.88.
QCOM Estimate Trend
Image Source: Zacks Investment Research
Earnings Surprise HistoryThe chip manufacturer delivered a trailing four-quarter earnings surprise of 3.28%, on average, beating estimates on each occasion. In the last reported quarter, the company pulled off an earnings surprise of 3.11%.
Image Source: Zacks Investment Research
Earnings WhispersOur proven model does not conclusively predict an earnings beat for Qualcomm for the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Qualcomm currently has an ESP of -0.58% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping Upcoming ResultsDuring the to-be-reported quarter, Qualcomm introduced two new Snapdragon mobile platforms to enhance performance, deliver advanced artificial intelligence (AI) capabilities and improve user experiences across the mid-range and entry-tier smartphone markets. The launches strengthened the company's smartphone offerings and reinforced its presence in high-volume device categories. This is likely to have led to incremental handset revenues.
The company also expanded its AI PC portfolio with the launch of the Snapdragon C platform, extending its reach into the entry-tier laptop market. Offering AI-powered computing, reliable performance and improved power efficiency at an affordable price point, the platform enables the company to address a broader customer base. Early processor demand from PC manufacturers ahead of new device launches is expected to support chipset shipments, providing a favorable contribution to Qualcomm's fiscal third-quarter results.
In the quarter under review, Qualcomm continued to diversify its business by expanding its presence across PCs, connected devices and edge AI applications. The company's broader Snapdragon platform is expected to increase its exposure to multiple high-growth markets while reducing its reliance on the smartphone segment over time. These strategic initiatives are expected to strengthen Qualcomm's long-term growth prospects and are likely to have a positive impact during the June quarter.
Despite strong momentum in AI, PCs and automotive, Qualcomm continues to face intense competition in its smartphone chipset business. Memory supply constraints and related price increases affect device economics. Management expects handset revenues from Chinese customers to bottom in the fiscal third quarter, assuming weaker low-tier handset units sequentially, which can weigh on the licensing revenue mix. The company is witnessing increasing pricing pressure from rival chipmakers, particularly in the Android market, which could weigh on margins. At the same time, continued investments in AI, automotive, data center and XR technologies are likely to have kept operating expenses elevated during the quarter. Mixed demand in the global smartphone market, especially in the entry-level segment, might have also limited chipset shipments.
Price PerformanceOver the past year, Qualcomm has gained 9.8% compared with the industry’s growth of 61%, underperforming competitors like Intel Corporation (INTC - Free Report) and Broadcom Inc. (AVGO - Free Report) . While Broadcom has gained 38.7%, Intel has surged 329.6% over the said time frame.
Image Source: Zacks Investment Research
Key Valuation MetricFrom a valuation standpoint, Qualcomm appears to be relatively cheaper compared to the industry and below its mean. Going by the price/earnings ratio, the company’s shares currently trade at 16.07 forward earnings, lower than 30.2 for the industry and the stock’s mean of 16.58.
Image Source: Zacks Investment Research
Investment ConsiderationsBy strengthening its leadership in on-device AI, premium Snapdragon platforms and connected-edge technologies, Qualcomm is well-positioned to diversify its revenue base beyond smartphones. Continued momentum in Automotive and IoT, expanding AI capabilities and the company's entry into the data center market are expected to support long-term revenue growth, improve product diversification and strengthen earnings potential.
However, persistent weakness in the Android smartphone market due to industry-wide memory supply constraints, coupled with customer concentration and intense competition in the semiconductor industry, is expected to weigh on near-term revenues. In addition, geopolitical uncertainties, evolving trade policies and the gradual transition of major customers toward in-house chip development are likely to remain key challenges for the company’s growth and profitability.
End NoteQualcomm continues to maintain a strong competitive position, supported by its robust technology portfolio and leadership in wireless communications. Upward revisions in earnings estimates also reflect improving investor confidence. However, persistent competitive pressures in the handset market, customer concentration and an uncertain macroeconomic environment could limit near-term upside, making the stock less attractive ahead of the quarterly results.
Existing investors may continue to hold the stock, supported by its attractive valuation, strong product lineup and ongoing efforts to diversify its business across multiple end markets, which should provide a solid foundation for sustainable long-term growth.
Intel’s stock rally leaves little room for merely decent second quarter results.
INTC stock is moving ahead of earnings. See the chart and price action here. INTC Rally Raises the Earnings BarIntel’s second-quarter earnings arrive after Thursday’s close, and Wall Street expects revenue of $14.4 billion, up from $12.86 billion a year earlier. Analysts project earnings of 19 cents per share, versus a 10-cent loss last year, according to Benzinga Pro data.
The estimates imply meaningful progress, but the stock already reflects a much stronger recovery.
Intel’s recent execution supports part of the optimism. The chipmaker has topped revenue estimates for seven straight quarters and has beaten earnings estimates in three consecutive quarters and seven of the past ten.
What to WatchAnother beat may be required to defend Intel stock’s current valuation.
The bigger test will come from guidance and margins. Traders need evidence that stronger demand can translate into durable profit growth.
Management’s comments on data center demand, foundry economics and manufacturing yields could matter more than headline revenue. Any sign of higher costs or slower growth could pressure shares quickly.
Artificial intelligence remains central to Intel’s bull case. Investors will watch for demand across server processors and enterprise infrastructure.
Cost reductions add another complication. Intel has cut jobs within its Data Center and AI group. The move may improve efficiency, yet it could raise questions about underlying demand. Analysts could press management on whether the cuts reflect discipline or weaker growth expectations.
Thursday’s report, therefore, carries an unusually high bar. A clean beat, stronger margins and confident guidance could extend Intel’s rally, while mixed results may expose the gap between turnaround enthusiasm and current fundamentals.
After a near-tripling, Intel must prove the story has moved beyond hope.
INTC Stock Price Activity: Intel stock was down 3.12% at $99.42 at the time of publication Thursday, according to Benzinga Pro.
Over the past month, INTC has declined about 21.9% versus a 0.6% rise in the S&P 500 and is up roughly 168% year-to-date compared to the index’s 7.7% gain.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task.
By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.
However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.
Our proprietary system currently recommends Shopify (SHOP - Free Report) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Here are three of the most important factors that make the stock of this cloud-based commerce company a great growth pick right now.
Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Shopify is 34.6%, investors should actually focus on the projected growth. The company's EPS is expected to grow 57.5% this year, crushing the industry average, which calls for EPS growth of 13.5%.
Impressive Asset Utilization RatioAsset utilization ratio -- also known as sales-to-total-assets (S/TA) ratio -- is often overlooked by investors, but it is an important indicator in growth investing. This metric shows how efficiently a firm is utilizing its assets to generate sales.
Right now, Shopify has an S/TA ratio of 0.84, which means that the company gets $0.84 in sales for each dollar in assets. Comparing this to the industry average of 0.76, it can be said that the company is more efficient.
While the level of efficiency in generating sales matters a lot, so does the sales growth of a company. And Shopify looks attractive from a sales growth perspective as well. The company's sales are expected to grow 27.4% this year versus the industry average of 0%.
Promising Earnings Estimate RevisionsBeyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend is a plus here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
There have been upward revisions in current-year earnings estimates for Shopify. The Zacks Consensus Estimate for the current year has surged 0.6% over the past month.
Bottom LineShopify has not only earned a Growth Score of B based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #1 because of the positive earnings estimate revisions.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination indicates that Shopify is a potential outperformer and a solid choice for growth investors.
Key Takeaways Pfizer's sNDA for Talzenna plus Xtandi received FDA priority review in HRR gene-mutated mCSPC.The application seeks to expand Talzenna combo use to an earlier stage of metastatic prostate cancer.Pfizer expects an FDA decision on the Talzenna plus Xtandi sNDA in the last quarter of 2026. Pfizer (PFE - Free Report) announced that the FDA has accepted the supplemental new drug application (sNDA) for Talzenna (talazoparib), an oral PARP inhibitor, in combination with Xtandi (enzalutamide), an androgen receptor pathway inhibitor (ARPI), for an expanded use in prostate cancer.
The sNDA is seeking approval of Talzenna in combination with Xtandi for treating men with homologous recombination repair (HRR) gene-mutated metastatic castration-sensitive prostate cancer (mCSPC), also known as metastatic hormone-sensitive prostate cancer (mHSPC).
With the FDA granting a priority review to the sNDA, a decision from the regulatory body is expected in the last quarter of 2026.
If approved, the sNDA would expand the use of Talzenna plus Xtandi to mCSPC, an earlier stage of the disease. Prostate cancer remains the second most common cancer among men globally.
Talzenna was initially approved in the United States, the EU and several other regions as a monotherapy for adults with deleterious or suspected deleterious gBRCAm HER2-negative locally advanced or metastatic breast cancer. Later, Talzenna, in combination with Xtandi, received FDA approval for treating men with HRR gene-mutated metastatic castration-resistant prostate cancer (mCRPC). The regimen is also approved in the EU for adults with mCRPC in whom chemotherapy is not clinically indicated. The combo is currently authorized in around 60 countries, with indications varying by region.
PFE’s Price PerformanceYear to date, shares of Pfizer have gained 3.1% compared with the industry’s rally of 12.2%.
Image Source: Zacks Investment Research
PFE’s sNDA Based on Phase III TALAPRO-3 StudyThe sNDA for the Talzenna plus Xtandi combo in mCSPC was based on data from the phase III TALAPRO-3 study.
Data from the same showed that treatment with Talzenna plus Xtandi reduced the risk of radiographic progression or death by 52% versus placebo plus Xtandi, with consistent benefit seen across patients with BRCA and non-BRCA HRR gene alterations.
The safety profile was similar to the known profiles of each agent, while no new safety signals were reported either.
The phase III TALAPRO-3 study enrolled 599 patients with mCSPC, who had received at most three months of androgen deprivation therapy (chemical or surgical), with or without an approved ARP inhibitor in this setting. Eligible patients in the study were randomized to receive Talzenna 0.5 mg/day plus Xtandi 160 mg/day, or placebo plus Xtandi 160 mg/day.
A regulatory filing seeking approval of Talzenna plus Xtandi in HRR gene-mutated mCSPC is also currently under review in the European Union.
PFE’s Zacks Rank & Stocks to ConsiderPfizer currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Kiniksa Pharmaceuticals (KNSA - Free Report) and Liquidia Corporation (LQDA - 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 Kiniksa Pharmaceuticals’ 2026 earnings per share have risen from $1.24 to $1.25, while estimates for 2027 have increased from $1.70 to $1.76 during the same time. KNSA shares have soared 51.3% year to date.
Kiniksa Pharmaceuticals’ earnings beat estimates in two of the trailing four quarters, while missing the same on the remaining two occasions, with the average surprise being 1.53%.
Over the past 60 days, estimates for Liquidia’s 2026 earnings per share have risen from $2.97 to $3.02, while estimates for 2027 have increased from $4.81 to $4.92 during the same time. LQDA shares have surged 152.4% year to date.
Liquidia’s earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with the average surprise being 54.40%.
When Cisco ran 6,986 multi-turn attacks against 15 flagship models, attackers who adapted across the conversation broke through as often as 88.3% of the time. Amy Chang, Cisco's head of AI threat intelligence and security research, brought that finding to the agentic security panel at VB Transform 2026; the number should worry anyone still running single-turn red-teaming programs.
IBM shares came under pressure after weaker-than-expected mainframe sales weighed on the company's outlook. CEO Arvind Krishna joins Bloomberg to explain why he sees the slowdown as temporary, how AI is reshaping enterprise technology spending, and why he's betting on quantum computing as IBM's next major growth engine.
Energy is back in focus midday Thursday. WTI crude oil is up 6% over the past 24 hours to $91.94 per barrel, and Barron's reported that WTI briefly hit $100 per barrel earlier today, its first time above $100 in nearly two months, before settling near $91.94.
Brent oil, the global benchmark, soared about 7% on Thursday to more than $100 a barrel. Crude surged after Yemen’s Houthi militants reportedly attacked two Saudi Arabian oil tankers in the Red Sea. Saudi Arabia has been using the Red Sea to bypass the Strait of Hormuz due to Iranian attacks on ships trying to move through that key waterway. President Trump also threatened “major military punishment” on Iran and the Houthis if they attack again.
Here’s a look at the current situation in the oil market and whether now’s the time to buy oil stocks.
Image source: Getty Images.
The partial bypass is under attackIran has been preventing oil from flowing freely out of the Strait of Hormuz since the U.S. and Israel launched military strikes earlier this year. While the U.S. and Iran had signed a Memorandum of Understanding that was to reopen the Strait toll-free for 60 days in June, Iran continued to attack ships. That led the U.S. to resume military action against the country.
With tanker flows through the Strait hampered, Saudi Arabia shifted to exporting more oil through the Red Sea via its recently expanded East-West Pipeline. That system can move 7 million barrels per day. However, the Iranian-backed Houthis have threatened to cut off this bypass by attacking ships moving through the Bab el-Mandeb, a straight between Yemen and the Horn of Africa. Doing so would further restrict the flow of oil to global markets.
The continued disruptions to the oil market led Goldman Sachs to warn that Brent could top $120 a barrel next quarter, and average $100 a barrel in 2027. That upside risk assumes that the Strait remains disrupted through next year. A disruption to Bab el-Mandeb could make matters even worse for the oil market by further limiting oil flows.
Time to buy oil stocks?President Trump is reportedly considering a “massive attack” on Iran that would be even bigger than the prior strikes. Such an attack would undoubtedly trigger an Iranian response, likely targeting the oil market. Iran could launch drones and missiles to damage key bypass infrastructure, including Saudi Arabia's East-West Pipeline and the Red Sea port of Yanbu, as well as the UAE’s bypass pipeline (Abu Dhabi Crude Oil Pipeline) and Fujairah port. That could quickly push crude prices up past $120 a barrel.
Despite upside risks to oil prices, oil stocks are only modestly higher this year. Oil giants ExxonMobil (XOM +2.14%) and Chevron (CVX +1.30%) have rallied about 30%, while Brent has surged 65%. They have much more upside potential if crude prices continue to rise.
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Both oil giants entered the year focused on cutting costs to boost profitability amid the initial expectation for lower crude prices. Exxon is in the middle of a multi-year structural cost savings program aimed at shaving $20 billion in costs by 2030, $15.6 billion of which it has delivered as of the first quarter. Meanwhile, Chevron aims to deliver $3 billion to $4 billion in structural cost reductions by the end of this year, along with $1.5 billion in synergies from its merger with Hess. Additionally, both companies are investing heavily in their highest-return, lowest-cost assets to further boost profitability. As a result, both were on track to generate significant profit growth this year at a much lower oil price range ($65-$70 a barrel). With crude well above that level, and potentially heading even higher, they’ll generate significantly higher earnings and cash flow this year.
Surging oil prices make oil stocks look compellingIranian-backed Houthis are trying to disrupt Saudi Arabia’s bypass plan, which is driving up oil prices. This new disruption is part of the growing upside risk for oil prices. Despite the surge, oil stocks are still only up modestly this year. That makes the risk/reward look attractive for an investment in an oil stock like Chevron or Exxon right now.
It has been about a month since the last earnings report for Carnival (CCL - Free Report) . Shares have lost about 9.7% 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 Carnival due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Carnival Corporation before we dive into how investors and analysts have reacted as of late.
Carnival Q2 Earnings & Revenues Beat Estimates, Both Increase Y/YCarnival reported better-than-expected second-quarter fiscal 2026 (ended May 31) results, with both adjusted earnings and revenues surpassing the Zacks Consensus Estimate. The top and bottom lines also increased on a year-over-year basis.
Carnival posted its twelfth consecutive quarter of record net yields and exceeded the March guidance by $100 million, driven by strong commercial execution and improved cost efficiency despite nearly 30% higher fuel costs. Management noted that recent booking trends are beginning to improve, indicating a gradual easing of geopolitical headwinds and reinforcing confidence in demand, pricing and the company's long-term earnings potential.
CCL’s Q2 Earnings & RevenuesIn the quarter under review, the company reported adjusted earnings per share (EPS) of 41 cents, beating the Zacks Consensus Estimate of 35 cents. In the year-ago quarter, CCL posted an adjusted EPS of 35 cents.
Revenues in the quarter totaled $6.66 billion, beating the consensus mark of $6.64 billion. The metric also increased 5.3% year over year.
During the quarter, passenger ticket revenues amounted to $4.27 billion, up from $4.10 billion reported in the prior-year quarter. Our estimate for passenger ticket revenues was also pegged at $4.23 billion.
Onboard and other revenues increased to $2.39 billion from $2.22 billion reported in the year-ago quarter. Our estimate for Onboard and other revenues was pegged at $2.38 billion.
Carnival’s FinancialsAdjusted net income in the quarter amounted to $569 million compared with $470 million reported in the prior-year quarter. Adjusted EBITDA totaled $1.58 billion, up from $1.51 billion reported in the prior-year quarter.
CCL’s Balance SheetAs of May 31, 2026, cash and cash equivalents were $2.24 billion compared with $1.93 billion as of Nov. 30, 2025. Total debt (current and long-term) as of May 31, 2026, was $24.89 billion compared with $26.64 billion as of Nov. 30, 2025.
Booking Update of CarnivalThe company delivered another exceptionally strong booking performance, with its booked position for the second half of 2026 running ahead of last year at historically high prices on a constant-currency basis. This strength was achieved despite more than a full quarter of heightened geopolitical volatility that primarily affected booking trends for European deployments, particularly in the Mediterranean region. Management maintained pricing discipline by leveraging its occupancy advantage, supporting continued yield strength.
With 93% of 2026 capacity already booked and less inventory remaining for sale than at the same point last year, Carnival is well positioned to achieve record net yields in the back half of 2026. Demand for 2027 and beyond also remains robust, with booking volumes and pricing for future sailings running ahead of prior-year levels since March, including a significant increase in bookings for European itineraries.
The company's booking curve remains the furthest out on record, underscoring the strength of its portfolio of cruise brands and sustained demand generation efforts. Continued demand momentum was also reflected in higher fiscal second-quarter onboard revenues, increased pre-cruise onboard sales and strong customer engagement, providing enhanced revenue visibility.
Customer deposits reached an all-time high of $9.0 billion, surpassing the prior year's record by more than $450 million despite flat capacity growth over the next 12 months. The record deposit balance highlights the continued strength in consumer demand and further reinforces Carnival's strong cash flow profile.
CCL’s Q3 & FY26 OutlookFor third-quarter fiscal 2026, the company expects adjusted EBITDA to be approximately $2.88 billion. It expects fiscal third-quarter adjusted net income to be nearly $1.86 billion. The company expects fiscal third-quarter adjusted EPS to be $1.35.
For fiscal 2026, CCL now expects adjusted EBITDA of approximately $7.11 billion, down from its prior estimate of $7.19 billion. Adjusted net income is projected to be nearly $3.07 billion compared with the earlier expectation of $3.1 billion. Accordingly, adjusted EPS for the year is anticipated to be $2.22, revised up from the previous outlook of $2.21.
How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended downward during the past month.
VGM ScoresCurrently, Carnival has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a score of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Carnival has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
T-Mobile US, Inc. (TMUS) Q2 2026 Earnings Call July 23, 2026 7:30 AM EDT
Company Participants
Quan Yao - Senior Vice President of Investor Relations
Srinivasan Gopalan - CEO, President & Director
Peter Osvaldik - Executive VP & CFO
John Saw - President of Technology & CTO
André Almeida - Chief Broadband, Enterprise & Emerging Business Officer
Jon Freier - Chief Operating Officer
Conference Call Participants
Sean Diffley - Morgan Stanley, Research Division
Michael Funk - BofA Securities, Research Division
Craig Moffett - MoffettNathanson LLC
John Hodulik - UBS Investment Bank, Research Division
Peter Supino - Wolfe Research, LLC
Kannan Venkateshwar - Barclays Bank PLC, Research Division
Kutgun Maral - Evercore ISI Institutional Equities, Research Division
Michael Ng - Goldman Sachs Group, Inc., Research Division
Sebastiano Petti - JPMorgan Chase & Co, Research Division
Bryan Kraft - Deutsche Bank AG, Research Division
Samuel McHugh - BNP Paribas, Research Division
Presentation
Operator
Good morning. [Operator Instructions] I would now like to turn the conference over to Cathy Yao, Senior Vice President of Investor Relations for T-Mobile U.S.. Please go ahead.
Quan Yao
Senior Vice President of Investor Relations
Good morning. Welcome to T-Mobile's Second Quarter 2026 Earnings Call. Joining me on our call today are Srini Gopalan, our President and CEO; Peter Osvaldik, our CFO; as well as other members of the leadership team.
During this call, we will make forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially. We encourage you to review the risk factors set forth in our SEC filings. Our earnings release, investors factbook and other documents related to our results, as well as reconciliations between GAAP and non-GAAP results discussed on this call can be found on our Investor Relations website.
With that, let me now turn it over to Srini.
Srinivasan Gopalan
CEO, President & Director
Thanks, Cathy, and good morning, everyone. We're here in New
Key Takeaways T-Mobile beat Q2 earnings and revenue estimates on strong service revenue growth and higher postpaid ARPA.TMUS grew postpaid service revenues 12.6% and raised its 2026 operating cash flow and free cash flow outlook.TMUS generated higher EBITDA and cash flow despite rising operating costs and continued network investments. T-Mobile US, Inc. (TMUS - Free Report) reported second-quarter 2026 earnings of $3.13 per share, beating the Zacks Consensus Estimate of $2.49 by 25.7%. Total revenues of $22.79 billion also edged past the consensus mark of $22.74 billion by 0.21% and increased 7.9% year over year.
The strong performance reflected continued growth in service revenues, expanding postpaid average revenue per account (ARPA) and solid customer additions. Postpaid ARPA increased 2% year over year to $152.91, underscoring the company's ability to deepen customer relationships and drive higher monetization.
TMUS Benefits From Service Revenue ExpansionT-Mobile generated total service revenues of $18.98 billion in the second quarter, up 8.9% from the year-ago period. Postpaid service revenues climbed 12.6% year over year to $15.85 billion, supported by higher average postpaid accounts following the UScellular and Metronet acquisitions as well as higher postpaid ARPA.
Total revenues increased 7.9% year over year to $22.79 billion despite a sequential decline from the first quarter, reflecting lower equipment sales. Equipment revenues increased modestly from the prior-year quarter as a richer mix of high-end smartphones offset lower unit volumes, while service revenues continued to be the primary growth engine.
T-Mobile Strengthens Customer MetricsTMUS reported postpaid net account additions of 277,000 during the quarter compared with 318,000 a year ago. Total postpaid accounts increased to 34.7 million from 31.5 million in the prior-year quarter, highlighting continued expansion of the subscriber base despite slower net additions.
Postpaid account churn was 0.99% compared with 0.92% a year ago, primarily reflecting a higher mix of broadband-only accounts. Meanwhile, ARPA rose to $152.91 from $149.87, benefiting from higher fee revenue, increased customers per account, broader adoption of tax and fee-exclusive plans and continued growth in broadband and business accounts.
TMUS Faces Higher Operating CostsOperating expenses increased to $17.30 billion from $15.92 billion in the prior-year quarter. Higher costs of services, equipment sales, selling, general and administrative expenses, and depreciation and amortization all contributed to the increase.
Despite elevated expenses, profitability remained resilient. Net income rose modestly to $3.24 billion from $3.22 billion a year earlier, while diluted earnings per share increased 5.3% year over year to $2.99. Results included the impact of UScellular merger-related costs, including accelerated depreciation, net of tax, amounting to $146 million, or $0.14 per share.
T-Mobile Delivers Healthy Cash GenerationCore adjusted EBITDA increased 11.7% year over year to $9.54 billion, reflecting continued operating leverage as service revenues expanded. Net cash provided by operating activities rose 7.3% year over year to $7.5 billion, demonstrating the company's ability to translate revenue growth into cash generation.
Adjusted free cash flow improved 4.4% year over year to $4.8 billion despite higher capital spending. Cash purchases of property and equipment, including capitalized interest, increased 12.8% to $2.7 billion as the company continued investing in network expansion and integration initiatives. During the quarter, T-Mobile returned $3.3 billion to shareholders through $2.2 billion of share repurchases and $1.1 billion in dividends.
TMUS Raises Cash Flow Outlook for 2026Management reaffirmed its expectation for postpaid net account additions between 950,000 and 1.05 million for 2026 while maintaining its Core Adjusted EBITDA guidance in the range of $37.1 billion to $37.5 billion.
The company raised its outlook for net cash provided by operating activities to $28.4-$28.8 billion from the prior range of $28.1-$28.7 billion. Adjusted free cash flow guidance was also increased to $18.4-$18.8 billion from the previous outlook of $18.1-$18.7 billion, reflecting management's confidence in sustained service revenue growth, disciplined execution and continued cash generation.
TMUS’ Zacks RankTMUS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming ReleasesArista Networks Inc. (ANET - Free Report) is scheduled to release second-quarter 2026 earnings on Aug. 8. The Zacks Consensus Estimate for earnings is pegged at 89 cents per share, suggesting growth of 21.92% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 19.86%. The company delivered an average earnings surprise of 8.31% in the last four reported quarters.
Amphenol Corporation (APH - Free Report) is set to release second-quarter 2026 earnings on July 29. The Zacks Consensus Estimate for earnings is pegged at $1.19 per share, implying growth of 46.91% from the year-ago reported figure.
Amphenol has a long-term earnings growth expectation of 24.01%. The company delivered an average earnings surprise of 14.08% in the last four reported quarters.
Corning Incorporated (GLW - Free Report) is set to release second-quarter 2026 earnings on July 28. The Zacks Consensus Estimate for earnings is pegged at 76 cents per share, implying growth of 26.67% from the year-ago reported figure.
Corning has a long-term earnings growth expectation of 23.89%. The company delivered an average earnings surprise of 2.41% in the last four reported quarters.
SummaryT-Mobile delivered a strong Q2 earnings report, beating on postpaid net adds and net income, and raising free cash flow guidance.TMUS faces investor concerns over forced plan migrations and minor revenue shortfalls, but pricing power and strategic spectrum acquisitions remain intact.Despite cable competitors' wireless growth, TMUS's triopoly position and network investments support continued broadband share gains.I see no flashing red lights; the recent sell-off appears disconnected from fundamentals, and I remain long TMUS.4.06K Followers
Analyst’s Disclosure: I/we have a beneficial long position in the shares of TMUS, VZ 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.
U.S. stocks traded lower midway through trading, with the S&P 500 falling over 1% on Thursday.
The Dow traded down 0.92% to 51,738.04 while the NASDAQ declined 2.03% to 25,169.19. The S&P 500 also fell, dropping, 1.16% to 7,412.12.
Leading and Lagging Sectors
Industrials shares jumped by 2% on Thursday.
In trading on Thursday, communication services stocks fell by 5.2%.
Top Headline
T-Mobile US Inc. (NASDAQ:TMUS) stock fell around 5% on Thursday after the wireless carrier reported second-quarter results that beat earnings expectations but missed on revenue.
T-Mobile reported adjusted earnings of $2.99 per share, topping the analyst consensus estimate of $2.58, according to Benzinga Pro. Revenue increased to $22.79 billion from $21.13 billion a year earlier but missed the Street estimate of $22.94 billion.
Equities Trading UP
Equities Trading DOWN
Commodities
In commodity news, oil traded up 6.8% to $92.74 while gold traded down 2.6% at $4,044.80.
Silver traded down 4% to $57.915 on Thursday, while copper fell 1.8% to $6.3740.
Euro zone
European shares were lower today. The eurozone’s STOXX 600 fell 1%, while Spain’s IBEX 35 Index dipped 1.3% London’s FTSE 100 fell 0.6%, Germany’s DAX declined 1.2%, while France’s CAC 40 tumbled 1.6%.
Asia Pacific Markets
Asian markets closed mixed on Thursday, with Japan’s Nikkei 225 gaining 0.46%, Hong Kong’s Hang Seng index surging 1.28%, China’s Shanghai Composite rising 0.25% and India’s BSE Sensex falling 0.47%.
Economics
U.S. initial jobless claims US fell by 22,000 to 187,000 in the week ending July 18, compared to market estimates of 212,000. The Chicago Fed National Activity Index climbed to -0.02 in June from -0.19 in the previous month. Photo via Shutterstock
Market News and Data brought to you by Benzinga APIs
Goldman Sachs (GS -1.95%) has gone through better and worse times over its storied, 157-year history, and these are definitely better times. Among a large array of capital markets activity in the second quarter, the most prominent was its role as the lead underwriter on the Space Exploration Technologies (SpaceX) initial public offering (IPO).
Goldman Sachs stock hit a record last week, topping $1,150, and there's still momentum building as the investment bank services its long backlog of client demand. But is there anything left for new investors?
Driven by a strong bull market Goldman Sachs is the largest investment bank in the world, and it thrives in strong bull markets. The S&P 500 hit new highs in the second quarter, during which it gained 14.6%, and that drives business for investment banks. CEO David Solomon noted that the artificial intelligence (AI) cycle is creating large capital markets needs, and clients are coming to Goldman Sachs for services like financing and risk management.
Image source: Getty Images.
The bank has several divisions, and there's a flywheel effect as financing advice turns into capital raises and capital raises in turn become opportunities for the wealth management division. Altogether, it's a wheel that keeps turning and reaping results in all sorts of ways.
This led to record performance in the second quarter, including record revenue of $20.3 billion, record fees, record assets under management of more than $4 trillion, and record earnings per share of $20.98. Global banking and markets revenue increased 53% year over year, driven by a 55% increase in investing banking fees, while total revenue was up 39%.
Not just SpaceX While the SpaceX IPO was certainly an important part of the second-quarter blowout, there were several other prominent pieces. It also structured a secondary offering for Alphabet, advised NextEra Energy's acquisition of Dominion Energy, and advised Comcast's spinoff of NBCUniversal. Solomon noted a "significant" increase in corporate dealmaking, and large-cap corporate mergers and acquisitions volume increased 90% year over year through the first half of 2026, while its backlog is the highest in five years and the second-highest ever.
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The question is what comes next. While Solomon pointed out that it's clear that these are the early innings in the AI buildout, history shows that high IPO activity often comes at the end of a bull cycle. Goldman Sachs stock trades at just under 17 times trailing-12-month earnings, which is a premium to recent averages. This might be the peak of the deal-making cycle, and investors should consider that, as well as Goldman Sachs is performing, this might not be the optimal time to buy the stock.
Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Goldman Sachs Group, and NextEra Energy. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.
Key Takeaways Globe Life missed Q2 earnings estimates despite higher premiums, underwriting income and investment income. GL raised its 2026 operating income outlook as life & health insurance businesses maintained solid momentum. GL repurchased $175 million of shares and posted double-digit growth in key health insurance businesses. Globe Life Inc. (GL - Free Report) reported second-quarter 2026 net operating income of $3.61 per share, which missed the Zacks Consensus Estimate of $3.67 by 1.6%. The bottom line, however, improved 10% year over year, driven by higher insurance underwriting income.
The quarter benefited from higher premium revenues, stronger insurance underwriting income, and increased investment income. Higher premium revenues reflected continued strength across the company’s life and health insurance businesses.
GL Benefits From Premium Growth Across Insurance BusinessTotal premium revenues increased 7% year over year to $1.30 billion. Life insurance premiums rose 3% to $860.8 million, while health insurance premiums climbed 16% to $436.9 million, supported by strong growth at United American and Family Heritage.
Operating revenues increased 8% year over year to $1.60 billion, driven by higher premium income, stronger net investment income and realized investment gains. The top line surpassed the Zacks Consensus Estimate by 0.6%.
Globe Life Posts Higher Underwriting and Investment IncomeInsurance underwriting income increased 5% year over year to $370.3 million. Life underwriting income rose 6% to $359.4 million, while health underwriting income edged up 1% to $99.3 million.
Net investment income rose 4% year over year to $293.8 million. Excess investment income, a key profitability measure, rose 10% to $38.3 million as higher investment income more than offset increased required interest on policy liabilities.
Administrative expenses were up 6.2% year over year to $91.4 million.
Total benefits and expenses increased 6.5% year over year to $1.2 billion, primarily due to higher total policyholder benefits, amortization of deferred acquisition costs, commissions, premium taxes and non-deferred acquisition costs, interest expense and other operating expense.
GL's Distribution Channels Deliver Mixed ResultsLife insurance premium growth was led by the American Income division, where premiums increased 5% year over year to $466.3 million. Liberty National premiums rose 3%, while Direct to Consumer premiums slipped 1%. Overall life net sales declined 3% to $149.6 million as weaker Direct to Consumer sales more than offset Liberty National's gains.
Health insurance continued to outperform. United American health premiums surged 29% year over year to $211.4 million, while Family Heritage premiums increased 9%. Total health net sales improved 2% to $70.4 million, supported by double-digit growth at United American despite softer performance at Liberty National and American Income.
Globe Life Strengthens Capital PositionBook value per share increased 18% year over year to $78.18. Excluding accumulated other comprehensive income (AOCI), book value per share rose 11% to $100.04.
Net income return on equity was 18.4% for the first six months of 2026, down 40 basis points year over year. Net operating income return on equity, excluding AOCI, was 14.3%, down 10 basis points year over year.
During the reported quarter, Globe Life repurchased 1.1 million shares for $175 million at an average price of $154.28 per share, continuing its shareholder return strategy.
GL Raises 2026 Earnings OutlookGlobe Life raised its full-year 2026 net operating income guidance to a range of $15.55-$15.95 per share, suggesting a 10-cent increase at the midpoint from its prior outlook.
Zacks RankGlobe Life currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other InsurersThe Progressive Corporation’s (PGR - Free Report) second-quarter 2026 earnings per share of $4.85 beat the Zacks Consensus Estimate by 3.2%. The bottom line, however, decreased 6.1% year over year. Net premiums written were $21.1 billion in the quarter, up 5% from $20.1 billion a year ago.
Net premiums earned grew 6% to $21.6 billion. The reported figure met the Zacks Consensus Estimate. Net realized gains on securities were $604 million, up 56% year over year. Combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 110 basis points from the prior-year quarter’s level to 87.1.
The Travelers Companies, Inc. (TRV - Free Report) reported second-quarter 2026 core income of $10.04 per share, which beat the Zacks Consensus Estimate of $5.21 by 92.7%. The bottom line climbed 54% year over year. Revenues of $12.09 billion missed the Zacks Consensus Estimate of $12.27 billion by 1.5%.
Net investment income rose 14% year over year to $1.07 billion pre-tax ($883 million after tax). The combined ratio improved 670 basis points year over year to 83.6%, reflecting lower catastrophe losses, stronger reserve development and a better underlying combined ratio.
W.R. Berkley Corporation (WRB - Free Report) reported second-quarter 2026 operating income of $1.27 per share, which beat the Zacks Consensus Estimate by 16.5%. The bottom line increased 21% year over year. W.R. Berkley’s net premiums written were about $3.4 billion, up 2.4% year over year. The figure surpassed our estimate of $3.4 billion.
Operating revenues totalled $ 3.8 billion, up 3.6% year over year. The top line surpassed the consensus estimate by 1.87%. Net investment income grew 10.4% to $418.7 million, supported by higher invested assets and higher portfolio yields. The figure topped our estimate of $407 million. The consensus estimate was $395.6 million.
Anyone can find stocks with monster dividend yields. The tricky part is finding the juicy dividend stocks you can actually trust with your money. Often, a high yield is a warning sign of problems boiling beneath the surface at a company, and it can sting your portfolio when a company has to cut its dividend.
Fortunately, there are high-yield dividend stocks you can trust, especially in the energy sector. Whether it's oil and gas or renewable power, the world needs increasingly more energy in this new era of artificial intelligence (AI).
Enterprise Products Partners (EPD -0.31%), Enbridge (ENB +0.38%), and NextEra Energy (NEE +0.65%) are three monster dividend stocks with strong track records, durable competitive advantages, and long-term growth prospects that should continue putting cash in your pockets for the foreseeable future. Here's why investors should be able to confidently buy and hold them through at least 2036.
Image source: The Motley Fool
1. A cash machine with a 5.7% yield Enterprise Products Partners is arguably the gold standard in the energy infrastructure space. The company operates more than 50,000 miles of pipelines, storage facilities, and export terminals located throughout North America, helping bring natural gas and liquids to the global marketplace. It's also a master limited partnership (MLP), a unique business structure that requires a special tax form, called a K-1.
The business functions like a toll road, generating revenue from fees it charges for materials flowing through its pipes. The fees are tied to long-term contracts, which protect the company from fluctuating commodity prices. Enterprise Products Partners isn't invincible if the entire industry slows down, but there's always a baseline level of consumption because the economy never stops.
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As an MLP, Enterprise Products Partners can distribute large sums of cash to its unitholders, the MLP term for shareholders. That's how you wind up with a dependable 5.7% yield. The payout ratio is actually quite conservative, at just 57% of the company's trailing 12-month distributable cash flow. That leaves money for capital expenditures to help capitalize on rising energy production and export activity over the coming years.
2. A diversified energy juggernaut Enbridge is one of the largest energy companies in North America. Its business combines liquids, pipelines, gas utilities, and renewable energy assets to offer investors a little bit of everything the energy sector has to offer. It also diversifies the company's revenue streams, making Enbridge a dependable dividend stock that yields 5.1% and has grown its dividend by an average of 9% annually over the past 30 years.
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The company is an essential cog for the U.S. and Canadian economies. Enbridge transports roughly 30% of the crude oil produced in North America and about 20% of the natural gas consumed by the United States. Virtually none of the business is exposed to commodity prices, and roughly 80% of its EBITDA (earnings before interest, taxes, depreciation, and amortization) is protected from inflation by price escalators.
Management maintains a targeted dividend payout ratio of 60%-70% of distributable cash flow, leaving a generous financial buffer in the event the business experiences an unexpected downturn. That doesn't seem too likely at this point; Enbridge anticipates growing at an annualized rate of about 5% as energy demand continues to rise.
3. An energy behemoth forming NextEra has ridden the secular growth trend in renewable energy for decades, becoming one of the world's largest producers of wind and solar power. It also operates Florida Power & Light, America's largest electric power utility. It offers a lucrative one-two punch that has driven the stock to market-beating returns and many years of dividend growth.
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It also hasn't prevented NextEra from swinging for the fences. The company has agreed to merge with Dominion Energy in a blockbuster deal worth more than $66 billion. With Dominion in the fold, NextEra would expand its empire beyond Florida into North and South Carolina and Virginia, the country's primary data center hub. It will position NextEra front and center for growth as data center ramps up electricity consumption over the next decade.
The merger is expected to close later next year. Such large deals are also risky because all the pieces must fit together well, and that can take time. NextEra increased its dividend by 10% earlier this year, perhaps a vote of confidence in the company's bright future. Management believes the combined entity will grow earnings by 9% annually through at least 2032, enough growth to make NextEra a no-brainer to buy and hold at the stock's current dividend yield of 2.8%.
Realty Income's (O -0.51%) developed a stellar reputation as a brick-and-mortar retailer REIT, defying the headwinds that are supposed to be destroying the retail industry. In fact, this landlord has raised its annual per-share dividend for nearly 29 consecutive years. And by no small amount either. Since listing itself on the NYSE in 1994, it's upped its dividend by an average of 4.1% per year.
Shareholders may see this growth pace perk up for the foreseeable future as this retail-focused real estate investment trust eases its way into the data center business. Here's what you need to know.
Yes, that Realty Income -- the retailer REIT It's true! The landlord to some of the retail industry's most resilient names, like Dollar General, Walmart, and Home Depot, is getting into the data center industry.
OK, it technically entered this business back in late 2023 by acquiring an 80% interest in two data centers then under construction in Northern Virginia that would ultimately be steered by AI infrastructure outfit Digital Realty.
That $800 million commitment was trumped in a big way just last month, however, when Realty Income formed a joint venture with Cloud Capital and an unnamed institutional investor. Together, they're initially committing over $6 billion to hyperscale data centers, leaving the door open to greater investment in the future.
Image source: Getty Images.
At first blush, it appears this REIT is moving into waters beyond its core proficiency. That's not quite the case. The business model here is essentially the same as its brick-and-mortar retailing operation -- Realty Income builds or buys a structure, and then converts it into a space that generates rental income.
In this case, the "renters" are simply companies leasing cloud-based access to computing servers. As Realty Income's CEO, Sumit Roy, commented on the agreement, the "announcement affirms the strength of our business model and its ability to translate across sectors, including digital infrastructure."
Accelerated income growth ahead One data center deal isn't necessarily game-changing for Realty Income. For that matter, neither is a small handful. For perspective on the amount of capital this real estate investment trust is actually putting into the business, the current net value of the company's real estate portfolio stands at $54 billion, which turned over $5.7 billion in revenue last year into nearly $4 billion worth of operating funds to pass along to shareholders, plus an additional $1.0 billion in net income. Its current data center efforts aren't likely to move the needle much just yet.
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Be patient, though. It's unlikely that Realty Income will back away from the hyperscale data center business now that it's proven it's comfortable with it. If anything, it's more likely than not to continue adding these projects to its portfolio. It matters simply because, according to Precedence Research, the worldwide data center market is poised to grow at an average yearly pace of nearly 27% through 2035. There's money to be made here.
Just don't lose perspective on this. While the opportunity for revenue growth is significant, hyperscale data centers also require a great deal of up-front capital and a somewhat slow payback period. It's still more of an income growth investment than a typical growth holding.
James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Digital Realty Trust, Home Depot, Realty Income, and Walmart. The Motley Fool has a disclosure policy.
If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Molson Coors Brewing (TAP - Free Report) . This company, which is in the Zacks Beverages - Alcohol industry, shows potential for another earnings beat.
When looking at the last two reports, this beer maker has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 37.82%, on average, in the last two quarters.
For the most recent quarter, Molson Coors was expected to post earnings of $0.36 per share, but it reported $0.62 per share instead, representing a surprise of 72.22%. For the previous quarter, the consensus estimate was $1.17 per share, while it actually produced $1.21 per share, a surprise of 3.42%.
Price and EPS Surprise
For Molson Coors, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Molson Coors has an Earnings ESP of +1.28% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on August 6, 2026.
Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.
Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Palantir (PLTR) received a fresh vote of confidence from Citi, which raised its earnings estimates on expectations that the company's U.S. commercial business w
Key Takeaways Palantir uses Ontology to connect data, workflows, and AI into enterprise operations.PLTR's AIP Bootcamps help customers rapidly move AI from pilots to production deployments.PLTR paired 85% revenue growth with strong profitability, outperforming key AI software peers. Palantir Technologies (PLTR - Free Report) has long been recognized as a leader in enterprise data analytics. Still, its competitive advantage is increasingly being defined by something far more durable than AI software alone. The company’s growing moat stems from its ability to help organizations transition from isolated AI experiments to fully operational, enterprise-wide AI deployments.
At the center of this strategy is Palantir’s Ontology, a software layer that connects an organization’s data, business processes, assets and decision-making into a unified operational model. Rather than simply generating insights, Ontology enables AI applications to understand how an enterprise functions and execute workflows within existing business operations. This transforms AI from a standalone productivity tool into infrastructure that supports mission-critical decision-making.
Complementing this platform is Palantir’s AIP Bootcamp program, which accelerates the path from proof of concept to production. Instead of spending months evaluating AI use cases, customers collaborate with Palantir to build working applications that solve real operational problems. Successful pilots often expand into larger deployments across departments, creating deeper integration with the customer’s technology ecosystem.
This combination of Ontology and AIP Bootcamps strengthens Palantir’s competitive position in several ways. As organizations deploy more workflows, connect additional data sources and embed AI into daily operations, switching to another platform becomes increasingly difficult. Existing customers also gain opportunities to expand usage over time, reinforcing recurring revenue growth while increasing long-term customer value.
Unlike many AI vendors focused primarily on developing models, Palantir is positioning itself as the operational layer that allows enterprises to deploy AI securely, reliably and at scale. As businesses increasingly prioritize production-ready AI over experimental projects, this integrated approach could continue widening PLTR’s competitive moat and strengthening its long-term growth prospects.
Palantir vs. AI Software PeersPLTR’s competitive strengths are reflected in its financial performance. The company delivered 85% revenue growth in the first quarter of 2026, including an exceptional 133% increase in U.S. commercial revenues, while generating a 60% adjusted operating margin and a 53% GAAP net margin. Even leading AI software companies like Datadog (DDOG - Free Report) and Snowflake (SNOW - Free Report) struggle to match this combination of rapid expansion and profitability.
While DDOG and SNOW continue to benefit from AI demand, their growth rates remain significantly lower. By combining a durable software foundation with industry-specific expertise and superior execution, Palantir continues to separate itself from DDOG, SNOW and traditional enterprise software competitors.
PLTR’s Price Performance & EstimatesThe stock has declined 30% year to date compared with the industry’s 7% decrease.
Image Source: Zacks Investment Research
From a valuation standpoint, PLTR trades at a forward price-to-sales ratio of 31.47X, well above the industry’s 3.96X. It carries a Value Score of F.
The Zacks Consensus Estimate for PLTR’s 2026 earnings declined over the past 60 days.
Image Source: Zacks Investment Research
PLTR currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Internet Software industry is facing meaningful execution challenges as AI adoption accelerates. One of the biggest concerns is balancing rapid software development with governance and security. Monetizing AI also presents challenges. Macroeconomic conditions continue to weigh on software spending. The industry participants are facing the challenge of continuously investing in AI infrastructure while maintaining profitability. These players are committing substantial resources toward AI models, cloud infrastructure, engineering talent and platform modernization to remain competitive. However, industry players like Unity Software (U - Free Report) , HubSpot (HUBS - Free Report) and GitLab (GTLB - Free Report) are benefiting from rapid adoption of AI, which is expanding software usage. AI is driving higher platform engagement, broader enterprise adoption and new monetization opportunities.
Industry Description The Zacks Internet Software industry comprises companies offering application performance monitoring, infrastructure and application software, DevOps deployment and Security software. Industry participants offer online payment solutions, asset optimization software, multi-cloud application security and delivery, social networking, 3D printing applications, and cloud content management solutions. They use the SaaS-based cloud computing model to deliver solutions to end-users, as well as enterprises. Hence, subscription is the primary revenue source. Advertising is also a major revenue source. Industry participants target a variety of end markets, including banking and financial services, construction, consumer packaged goods, education, energy, legal, various service providers, federal governments, and animal health technology and services.
3 Trends Shaping the Future of the Internet Software Industry Enterprise Software Infrastructure Growing Rapidly: The industry is benefiting from rapid AI adoption, which is driving demand for enterprise software infrastructure. AI-generated code is driving sharp increases in code pushes and platform usage, creating structural demand for DevSecOps platforms that can manage security, governance and deployment at machine scale. Growing requirement of integrated platforms capable of orchestrating both human developers and AI agents while maintaining compliance and operational control is benefiting the industry’s prospects. Platform consolidation is becoming increasingly attractive as enterprises seek unified data and AI infrastructure.
Consumption-Based Pricing Gains Traction: The emergence of AI-native pricing models is a key catalyst. The industry players are moving beyond traditional seat-based licensing by introducing consumption-based credits and outcome-driven pricing. The companies are allowing customers to scale usage as AI adoption expands, opening new monetization channels that extend beyond conventional software subscriptions. AI-powered agents, automation and consumption-based pricing are creating incremental revenue streams while increasing customer productivity.
AI Agents & AI-Workloads Create Opportunities: The growing need to secure cloud platforms amid the increasing incidences of cyberattacks and hacking drives the demand for web-based cybersecurity software. As enterprises continue to move their on-premises workloads to cloud environments, application and infrastructure monitoring are gaining importance. This is increasing the demand for web-based performance management monitoring tools. AI applications, AI agents and cloud-based AI workloads are expanding the attack surface for businesses, which bodes well for industry participants.
Zacks Industry Rank Indicates Dim Prospects The Zacks Internet Software industry, placed within the broader Zacks Computer and Technology sector, carries a Zacks Industry Rank #152, which places it in the bottom 38% of more than 247 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. The industry’s earnings estimates for 2026 have moved south by 1.7% since Aug. 31, 2025.
Given the bearish outlook of the industry, there are only a few stocks worth picking for healthy portfolio returns. However, before we present the top industry picks, it is worth looking at the industry’s shareholder returns and current valuation first.
Industry Lags S&P 500 and Sector The Zacks Internet Software industry has underperformed the broader Zacks Computer and Technology sector and the S&P 500 Index in the past year.
The industry has dropped 14.8% over this period compared with the S&P 500’s jump of 20.8% and the broader sector’s appreciation of 29.9%.
One-Year Price Performance
Industry's Current Valuation On the basis of forward 12-month price-to-sales (P/S), which is a commonly used multiple for valuing Internet Software stocks, we see that the industry is currently trading at 3.96X compared with the S&P 500’s 4.97X and the sector’s forward 12-month P/S of 6.71X.
Over the last five years, the industry has traded as high as 6.12X and as low as 3.69X, with a median of 4.73X, as the charts below show.
Forward 12-Month Price-to-Sales (P/S) Ratio
3 Internet Software Stocks to Buy Right Now Unity Software: This Zacks Rank #1 (Strong Buy) stock is benefiting from the rapid adoption of AI across game development and interactive content creation. You can see the complete list of today’s Zacks #1 Rank stocks here.
AI is accelerating game production, increasing new developer sign-ups and expanding demand for game discovery and monetization tools. The company is leveraging these trends through Vector, its AI-powered personalization platform, Unity AI for content creation and the upcoming commerce platform, while AI-native pricing models tied to agent usage are expected to create additional long-term revenue opportunities.
Unity shares have dropped 33.7% year to date (YTD). The Zacks Consensus Estimate for 2026 earnings has inched up by a penny to $1.04 per share over the past 30 days.
Price and Consensus: U
HubSpot: Another Zacks Rank #1 company, HubSpot's growth outlook is supported by rising enterprise adoption, platform consolidation and increasing AI monetization. The company continues to benefit from upmarket customer wins, multi-hub adoption and pricing initiatives, while AI-enabled offerings such as Customer Agent, Prospecting Agent and Data Agent are driving higher credit consumption and expanding recurring revenue opportunities.
The company believes that combining unified customer data with AI agents positions HubSpot as a comprehensive growth platform, enabling customers to automate marketing, sales and service workflows while increasing platform adoption over time.
HUBS shares have dropped 48.9% YTD. The Zacks Consensus Estimate for its 2026 earnings is pegged at $13.11 per share, down by a penny in the past 30 days.
Price and Consensus: HUBS
GitLab: This Zacks Rank #1 company is well positioned to benefit from the structural shift toward AI-powered software engineering. GitLab is winning larger enterprise deals as customers consolidate DevSecOps workflows on a single platform with integrated security, compliance, and AI. GitLab Ultimate anchors the upsell motion, while Dedicated and the Duo Agent Platform broaden deployment and monetization choices.
GitLab’s fiscal 2027 guidance points to continued revenue growth with non-GAAP operating profitability, supported by high cash generation and ongoing share repurchases. Remaining performance obligations of near $1.1 billion support revenue visibility as renewals and expansions flow through. Rising SaaS activity and early credit consumption indicate AI-assisted development is increasing usage across GitLab’s lifecycle.
GitLab shares have dropped 16.4% YTD. The Zacks Consensus Estimate for GTLB’s fiscal 2027 earnings is pegged at 81 cents per share, unchanged over the past 30 days.
Key Takeaways ANET is benefiting from AI networking demand and raised its 2026 AI revenue target to $3.5 billion. HUBS is seeing rapid AI agent adoption, with AI feature credit consumption up 67% quarter over quarter. U and IOT are expanding AI-powered platforms to improve automation, customer growth and efficiency. Artificial intelligence (AI) is rapidly reshaping the global technology landscape, driving a new wave of enterprise software spending. Businesses across industries ranging from manufacturing and healthcare to retail and financial services are accelerating investments in generative AI, large language models (LLMs), AI agents, intelligent automation, cloud platforms, and data analytics to improve productivity, enhance customer experiences, and streamline operations.
The AI boom is benefiting a broad range of software companies, including Arista Networks (ANET - Free Report) , Unity Software (U - Free Report) , HubSpot (HUBS - Free Report) and Samsara (IOT - Free Report) , which are integrating AI into their platforms to enhance product capabilities, improve customer outcomes and strengthen competitive positioning.
Before discussing the stocks in detail, let’s dig deeper into the trends.
Software Companies Gain From Rising Enterprise AI SpendingSoftware companies are benefiting from strong AI adoption by embedding intelligent copilots and automated agents into existing platforms, shifting from basic subscription models to consumption-based pricing. They are also using AI to dramatically accelerate their software development life cycles while expanding their data infrastructure capabilities to meet rising enterprise demands.
Continued strength of AI-driven software spending has been a key catalyst. Businesses are increasingly adopting solutions such as voice recognition, telehealth platforms, learning management systems, infrastructure monitoring software and spend management tools. Collaboration platforms, communication software and online education services are also seeing steady demand as workplaces and learning environments continue to evolve.
The pace of AI investment continues to accelerate. Gartner forecasts worldwide AI spending to reach $2.59 trillion in 2026, up 47% year over year, driven by higher investments in AI infrastructure, cloud services and enterprise software. It also expects end-user spending on AI models and platforms to reach $64 billion in 2026, up 63.4% from $39 billion in 2025. Spending on generative AI models is expected to surge 117%, while AI platform spending is projected to increase 36.9% in 2026. The growing adoption of AI-powered applications is creating significant opportunities for software companies that offer AI-enabled platforms and solutions.
Another major trend is the rise of Agentic AI. Software vendors are adopting usage-based AI pricing models, accelerating software development with AI coding tools and strengthening AI governance and compliance capabilities. The demand for multi-cloud interoperability is increasing, allowing enterprises to connect AI models and business systems seamlessly. These trends are positioning leading software companies to benefit from expanding AI adoption over the long term.
Our PicksUnity Software is benefiting significantly from the expanding adoption of AI across the interactive content industry. Unity’s AI-driven products, such as Vector and Unity AI, are accelerating game development, enhancing personalization and driving both user and creator growth. With 90% of game developers already using AI in their workflows and new Unity sign-ups up 20% quarter-over-quarter, Unity is positioned at the center of this transformation. In the first quarter of 2026, Strategic revenues grew 35% year over year, and AI-powered tools are driving both user and creator growth.
This Zacks Rank #1 (Strong Buy) company’s Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $1.03 per share, which has been unchanged over the past 30 days. This represents 19.77% year-over-year growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
HubSpot is benefiting significantly from expanding AI adoption, positioning the company for further upside. In the first quarter of 2026, the company highlighted that HubSpot’s AI-first strategy is translating into measurable growth, with AI-driven products like Customer Agent, Prospecting Agent and Data Agent seeing rapid adoption and usage. Active core seat users grew 90% year over year, and credit consumption for AI features surged 67% quarter over quarter. Customers are integrating AI into daily workflows, driving real outcomes such as improved CRM accuracy and higher support resolution rates.
This Zacks Rank #1 company’s Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $13.11 per share, which has been unchanged over the past 30 days. This represents 35.15% year-over-year growth.
Arista Networks is benefiting from the accelerating adoption of AI, which is driving unprecedented demand for high-speed networking solutions. In the first quarter of 2026, Arista Networks achieved the #1 market share in high-speed switching above 10-gigabit Ethernet, largely due to its robust cloud and AI networking strategy. With more than 100 customers deploying 800-gigabit Ethernet and a raised AI revenue target to $3.5 billion for 2026, Arista’s innovative products like the Etherlink portfolio and XPO optics are driving growth.
This Zacks Rank #2 (Buy) company’s Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $3.64 per share, which has increased by a penny over the past 30 days. This represents 22.15% year-over-year growth.
Samsara is benefiting from the expanding adoption of AI across the physical economy, positioning itself for further upside. As AI transitions from digital to physical applications, Samsara’s Connected Operations Platform leverages IoT hardware and AI to deliver real-time insights and automate workflows for asset-heavy industries. Customers are increasingly adopting AI-driven solutions like video-based safety, Waste Intelligence and Ground Intelligence, which help reduce costs, improve safety and boost operational efficiency. With more than $2 billion in ARR and strong growth in large customer segments, Samsara’s focus on operational AI and emerging products is driving durable, scalable growth.
This Zacks Rank #2 company’s Zacks Consensus Estimate for fiscal 2026 earnings is pegged at 75 cents per share, which has been unchanged over the past 30 days. This represents 33.93% year-over-year growth.
If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Etsy (ETSY - Free Report) . This company, which is in the Zacks Internet - Commerce industry, shows potential for another earnings beat.
This online crafts marketplace has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 24.05%.
For the most recent quarter, Etsy was expected to post earnings of $0.62 per share, but it reported $0.89 per share instead, representing a surprise of 43.55%. For the previous quarter, the consensus estimate was $0.88 per share, while it actually produced $0.92 per share, a surprise of 4.55%.
Price and EPS Surprise
For Etsy, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Etsy currently has an Earnings ESP of +4.83%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on August 5, 2026.
When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
With surging demand, limited production capacity, and skyrocketing prices, the dynamic random-access memory (DRAM) market has been red-hot this year. While there are three big players in the memory space, SK Hynix (SKHY +3.19%) and Micron (MU +3.13%) stand out as the two pure plays for investors to choose from, as the third supplier, Samsung, is a massive conglomerate involved in a variety of businesses.
The DRAM market is being driven by surging data center demand for high-bandwidth memory (HBM), which is packaged with graphics processing units (GPUs) and other AI chips to help optimize their performance. Inference tends to be even more memory reliant than AI model training, so the pickup in this segment of the AI market is helping drive demand even more. With high prices and strong margins supported by demand that well exceeds what they are able to produce, the big three memory makers have turned most of their focus to increasing their HBM manufacturing capacity.
However, with HBM, GPUs, and other high-performance chips all being manufactured using extreme ultraviolet (EUV) lithography and only one company in the world, ASML, able to make the massive and complex machines required, there is a limit to how much chipmaking capacity can be added in a single year. On top of that, producing HBM requires upwards of three times the wafer capacity as ordinary DRAM, which further limits capacity increases.
With the big three DRAM makers focusing their efforts and capacities on HBM, ordinary DRAM is also in short supply. As a result, prices for all types of DRAM have skyrocketed. SK Hynix's CEO recently said that 2027 will bring the worst memory crunch in the industry's history and predicted that demand could outpace supply past 2030. This dynamic has been a huge boon to both SK Hynix and Micron, lifting their revenues, gross margins, and profits. Conditions could be even more favorable for them next year.
But for investors, the question is which stock looks like the better buy now.
SK Hynix: The market leader
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SK Hynix is arguably the memory market leader. While Samsung has the highest market share for both DRAM and NAND, SK Hynix was the first to develop HBM, and it has a close partnership with Nvidia. It's also the GPU leader's main HBM supply partner. This relationship has helped it become the market share leader in what is perhaps the most important segment of the market, where it holds a nearly 60% share.
Overall, SK Hynix derives close to 80% of its revenue from DRAM and most of the rest from NAND (flash memory). Somewhat ironically, despite increasing HBM capacity and rising prices, standard DRAM server prices rose even more dramatically, so that segment made up a larger percentage of its DRAM revenue in Q1 than it did in the prior-year period. Overall, the company's revenue surged nearly 200% in Q1, while its gross margin went from 57% to 79%. That led to a nearly 400% surge in profit.
SK Hynix has started to lock in longer-term sales agreements for the first time, getting between three- and five-year agreements with no price caps, up-front payments from customers, and price floors. Meanwhile, it's looking to double its wafer capacity by 2030.
Micron: Booming growth
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Similar to SK Hynix, Micron derived about 76% of its revenue from DRAM last quarter, with NAND making up the rest. Last quarter, its revenue more than quadrupled year over year, and gross margin jumped from 37.7% to 84.6%.
It, too, has started to sign long-term agreements, which it says now cover about 40% of its revenue. One area where it diverges from SK Hynix, though, is that its contracts have price caps, along with some take-or-pay provisions. Micron is also investing aggressively to increase its production capacity.
Image source: The Motley Fool
The verdict SK Hynix is the HBM market leader, and its longer-term contracts without price caps could give it more upside if the up phase of this DRAM supercycle persists. Its American depositary receipts (ADRs) currently trade at a forward P/E of under 6, similar to Micron's valuation.
The knock on the stock, though, is that its ADRs trade at a big premium valuation to its stock in South Korea. This situation has been leading to some crazy price movements. I think SK Hynix is the better company, and its ADRs trade at a similar valuation to Micron, making it the better long-term buy. However, SK Hynix's trading dynamic is something worth considering when weighing whether to purchase the stock.
Micron (MU +3.59%) stock jumped 3.7% through 2 p.m. ET on Thursday, on no obvious good news for the computer memory stock -- but I think we can figure out why Micron popped anyway.
Yesterday evening, if you recall, Alphabet (GOOG -6.67%) (GOOGL -6.90%) stock reported its Q2 earnings -- sales up 24% year over year, and earnings up even more. Unfortunately for Alphabet investors, their company then proceeded to point out that AI is fueling its profits, and that for this reason, Alphabet is spending even more money on capital investment in its AI business.
Image source: Getty Images.
Alphabet splashes out the big bucks How much more, you ask?
Well, about $15 billion more than Alphabet had previously planned to spend -- between $195 billion and $205 billion this year alone.
Alphabet investors didn't like that news at all and sold off Alphabet stock by more than 6% today. Micron, investors, however, are having the opposite reaction -- and for good reason. After all, what do you think Alphabet is spending all these billions of dollars on?
That's right: They're spending the money to buy AI chips, and they're spending even more money to buy memory chips -- high bandwidth memory and flash memory -- to help those AI chips answer AI user questions.
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What this means for Micron stock And this, in a nutshell, is why what sounds like bad news for Alphabet stock today is clearly good news for Micron. One of the flushest companies on the planet, with $242 billion in the bank and $185 billion in trailing free cash flow, is turning on the spigots and directing its cash flows in Micron's direction.
And that makes today a great day to own Micron stock.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Micron Technology. The Motley Fool has a disclosure policy.
It's been nearly four years since artificial intelligence (AI) became an investing trend that swept over the stock market. The launch of ChatGPT in November 2022 exposed the world to generative AI. Nvidia followed that up in its May 2023 earnings report by announcing "surging demand" for its AI chips, which triggered an explosion in AI stocks that continues today.
AI is still the major theme, but the focus is much broader than which company can make the best chip. Investors also need to consider companies that provide power systems, computing capacity, storage and memory, land, connectivity, and cooling systems that keep AI operational.
There are dozens of ways to invest in AI today, but my three favorite picks each play an important role in the AI ecosystem. And all have significant tailwinds right now that are worth considering.
Image source: Getty Images.
AI stock to buy No. 1: Taiwan Semiconductor Manufacturing Whether it's Nvidia or one of its competitors designing a chip, Taiwan Semiconductor Manufacturing (TSM -1.50%) is likely to be the company fabricating them. TSMC, as the company is best known, is the world's largest chip foundry, with an estimated 73% of the global market.
The company has started selling chips made with its new 2-nanometer process, which offers higher density and energy efficiency. TSMC's 2 nm processing technology accounted for 3% of TSMC's total revenue in the second quarter, but it's expected to become a major moneymaker for TSMC.
TSMC also announced it would invest an additional $100 billion in its Arizona facilities to support advanced packaging fabs and its 2 nm processing technology. The investment brings TSMC's total commitment to its Arizona sites to $265 billion.
"We believe this investment will help to further foster the development of the U.S. semiconductor ecosystem, strengthen the supply chain, and support an increasing number of high-tech, high-paying jobs in the United States," CEO C.C. Wei said.
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AI stock to buy No. 2: Micron Technology Micron Technology (MU +3.59%) is one of the biggest winners so far this year, posting a gain of 240%, which is the second highest of any company in the S&P 500.
Micron makes high-performance memory and storage drives that are used in data centers, personal computers, mobile devices, and vehicles. It makes both NAND long-term storage, which allows devices to retain data even when they're powered off, and DRAM, which is semiconductor memory that temporarily stores active data. It's DRAM that is in high demand right now, driven by the growing number of data centers needed to train and run AI programs.
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Micron reported $41.45 billion in revenue for its fiscal 2026's third quarter (ended May 28), a whopping gain of 345% from a year ago. Net income was up 1,400% to $28.24 billion, and earnings per share increased from $1.68 to $24.67 per share.
Micron and other memory and storage stocks have slipped in recent weeks, but Wedbush Securities analyst Matt Bryson points to a catalyst -- the recent solid earnings performance of Dutch company ASML Holding, which makes commercial lithography systems for chipmakers. ASML noted it plans to increase its capacity by 30% in 2027, and Bryson takes that as a positive development for storage and memory stocks.
AI stock to buy No. 3: Nebius Group We've talked about chipmakers, storage and memory, and foundries. But my No. 3 favorite AI stock right now is Nebius Group (NBIS +1.64%), the former Russian internet company (now based in the Netherlands) that rebranded itself as an AI cloud services company.
The company provides cloud computing and GPU capacity for training and running AI workloads, serving as a strategic partner to Nvidia to scale its full-stack AI cloud platform. Nvidia invested $2 billion in Nebius to help the cloud services company deploy more than 5 gigawatts of capacity by the end of 2030. The deal calls for Nvidia and Nebius to collaborate on AI factory designs, the creation of an inference and agentic AI stack, AI infrastructure deployment, and fleet management.
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Nebius also signed an infrastructure agreement with Meta Platforms to provide $12 billion worth of dedicated capacity starting in 2027, and up to $15 billion in additional capacity -- essentially ensuring that Meta will be a backup buyer if Nebius is unable to sell its computing capacity.
Nebius' revenue in the first quarter was $399 million, up 684% from a year ago. The company spent an incredible $2.5 billion in capital expenditures, primarily GPUs and related hardware, in the first quarter. That's a huge number for a company with a market cap of only $53 billion. However, Nebius remains in a solid financial position, having raised $6.3 billion in the first quarter, and has a cash position of $9.3 billion.
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Texas Instruments TXN is experiencing a decline in share price despite surpassing Q2 earnings expectations and providing an optimistic Q3 forecast. The semiconductor company reported a significant year-over-year revenue growth of 22.8%, reaching $5.46 billion, which was well above market predictions. For Q3, TXN anticipates earnings per share (EPS) in the range of $2.23 to $2.57, with revenue projected between $5.65 billion and $6.15 billion, indicating another above-seasonal guidance as demand expands.
Demand Breadth: - Strong performance driven by industrial, data center, and automotive sectors. - Industrial revenue grew approximately 30% year-over-year and about 10% sequentially. - Automotive revenue increased in the mid-teens year-over-year and upper single digits sequentially. - Data center revenue doubled year-over-year and rose around 20% sequentially. Cycle: - TXN perceives customers as being in the early stages of the cycle. - Backlogs have increased for both immediate and longer-term orders, supporting management's outlook for broad, sustained demand growth. Margins & Pricing: - Gross margin expanded by 340 basis points sequentially to 61%, with expectations for further modest growth in Q3. - Pricing remained stable in the first half, contrary to TXN's usual slight declines, with increases starting primarily in Analog. Inventory and Capacity: - TXN's investments in inventory and manufacturing capacity enable quick responses to heightened demand. - The company has sufficient cleanroom infrastructure to support approximately three years of growth and maintains a capital expenditure outlook of $2-3 billion for the year, potentially leaning toward the higher end. Q3 Outlook: - TXN anticipates a stronger and broader demand landscape heading into Q3. - Industrial, data center, and automotive sectors are expected to be the primary growth drivers, with personal electronics also expected to improve. Despite the stock's recent downturn, TXN's Q2 performance was promising, indicating a potential recovery into a broader upcycle. The automotive sector accelerated, and both industrial and data center markets remained robust. The above-seasonal Q3 guidance suggests ongoing strength in core markets. TXN's strategic investments in inventory and manufacturing are yielding benefits, allowing for quick adaptations to increasing customer demands and potential gains from suppliers with longer lead times. The gross margin has improved significantly, and management anticipates further increases in Q3, with pricing expected to contribute more in Q4 and beyond. The stock's decline may reflect high expectations and the possibility that stronger demand could push capital expenditures toward the upper limit of TXN's forecast. It will be crucial for TXN to demonstrate that the overall demand environment continues to foster sustained revenue growth, higher factory utilization, and improved margins as the year progresses into 2027.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Mizuho raised Texas Instruments (TXN) price target to $305 from $300 while keeping a Neutral rating, citing data center growth. The chipmaker reported June quar
