Track market-moving stories before they get noisy

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.

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

HomeStock IdeasLong IdeasCommunication Services

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.

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.

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.

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

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.

Price and Consensus: GTLB

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.

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.

+ GuruFocus.com on

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].

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Key Takeaways HON beat Q2 estimates as automation strength drove revenue, earnings and orders growth. HON raised 2026 organic sales, segment margin and adjusted EPS outlook despite a lower sales forecast.Honeywell Technologies expects stronger Q3 and Q4 earnings, margins and organic sales growth. Honeywell Technologies (HON - Free Report) reported second-quarter 2026 adjusted earnings of $1.95 per share, which surpassed the Zacks Consensus Estimate of $1.80. The bottom line increased 10% year over year on an adjusted basis. On a reported basis, the company’s earnings were $16.65 per share compared with $1.21 in the year-ago quarter, reflecting the impact of a one-time gain related to the deconsolidation of Quantinuum.

Total revenues of $5.19 billion surpassed the consensus estimate of $4.98 billion. The top line increased 3% from the year-ago quarter, driven by strength in the Building Automation and Industrial Automation segments. Organic sales increased 4% year over year. Orders rose 16%, while backlog increased 9% to approximately $20 billion.

Including the Honeywell Aerospace business, Honeywell International reported total revenues of $9.72 billion in the second quarter of 2026, up 4% year over year from $9.32 billion.

HON’s Q2 Performance by Business SegmentFollowing the separation of Honeywell Aerospace on June 29, 2026, the company operates as a pure-play automation business under the segments discussed below.

Industrial Automation revenues declined 5% year over year to $1.50 billion. However, organic sales grew 4% year over year. Organic sales growth was driven by strength in utilities projects, warehouse backlog conversion, and sensing and industrial measurement businesses.

Building Automation revenues totaled $2 billion, up 10% year over year. Organic sales increased 9% year over year. The upside was driven by continued strength in both the building products and building solutions businesses. While sales from the building products business grew 10%, the same from the building solutions business increased 7%, driven by services.

Process Automation and Technology revenues increased 4% to $1.68 billion. However, organic sales fell 1% year over year. The results were driven by continued strength in LNG and a return to growth in automation projects. However, lower catalyst shipments compared with the year-ago quarter offset the gains.

Costs & Margins of HONIncluding the Honeywell Aerospace business, the company’s total cost of sales, comprising the cost of products and services sold, was about $6.07 billion, up 7.2% year over year. Selling, general and administrative expenses were $1.34 billion, down 1.3% year over year. Interest expenses and other financial charges were $363 million, reflecting an increase of 10.3% year over year.

Operating income was $1.74 billion, down 5.8% year over year. The operating income margin was 17.9% compared with 19.8% in the year-ago period.

Excluding the Honeywell Aerospace business, operating income was $662 million, down 0.6% year over year. The operating income margin was 12.8% compared with 13.3% in the year-ago period.

HON’s Balance Sheet & Cash FlowIncluding the Honeywell Aerospace business, HON had cash and cash equivalents of $8.75 billion at the end of the second quarter of 2026 compared with $12.49 billion at the end of December 2025. Long-term debt was $26.23 billion, lower than $27.14 billion at 2025-end.

Excluding the Honeywell Aerospace business, Honeywell Technologies generated $563 million in cash from continuing operating activities in the second quarter of 2026 compared with $187 million in the prior-year period. Capital expenditures totaled $187 million compared with $108 million in the prior-year quarter. Free cash flow was $456 million compared with $114 million in the year-ago quarter.

Q3 Guidance by HONFor the third quarter of 2026, Honeywell Technologies expects sales to be in the range of $4.9-$5 billion. Organic sales are expected to increase 4-6%.

HON expects a segment margin of 20-20.7%. The metric indicates an increase of 240-310 basis points year over year. Adjusted earnings per share are expected to be between $2.05 and $2.20. The metric indicates an increase of 21-29% on a year-over-year basis.

The adjusted effective tax rate is expected to be approximately 17%.

Q4 Guidance by HONFor the fourth quarter of 2026, Honeywell Technologies expects sales to be in the range of $5-$5.1 billion. Organic sales are expected to increase 4-6%.

HON expects a segment margin of 22-22.7%. The metric indicates an increase of 400-470 basis points year over year. Adjusted earnings per share are expected to be between $2.28 and $2.43. The metric indicates an increase of 25-33% on a year-over-year basis.

The adjusted effective tax rate is expected to be approximately 17%.

Honeywell’s 2026 OutlookFor 2026, Honeywell Technologies raised its organic sales growth, segment margin and adjusted earnings outlook. Excluding the Honeywell Aerospace business, the company expects sales to be in the range of $19.8-$20 billion compared with the previous projection of $19.9-$20.2 billion. The lower sales forecast reflects the earlier-than-expected divestitures of the Productivity Solutions and Services and Warehouse and Workflow Solutions businesses.

Organic sales are expected to increase 3-4%, up from the prior projection of 2-3%. HON expects a segment margin of 20.1-20.5%. The metric indicates an increase of 250-290 basis points year over year.

Adjusted earnings per share are expected to be between $8.05 and $8.35, up from the previous projection of $7.90-$8.30. The metric indicates an increase of 25-29% on a year-over-year basis.

Free cash flow is expected to be approximately $2 billion. The outlook includes the projected results of the Johnson Matthey Catalyst Technologies business following the completion of the acquisition on July 17, 2026.

HON’s Zacks Rank & Key PicksThe company currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks are discussed below.

3M Company (MMM - Free Report) currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MMM delivered a trailing four-quarter average earnings surprise of 4.1%. In the past 60 days, the Zacks Consensus Estimate for 3M’s 2026 earnings has increased 0.9%.

Applied Industrial Technologies (AIT - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 4.0%.

The Zacks Consensus Estimate for AIT’s fiscal 2026 (ended June 2026) earnings has improved by a penny in the past 60 days.

Crane Company (CR - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.3%.

In the past 60 days, the consensus estimate for CR’s 2026 earnings has increased by 0.3%.

Key Takeaways Union Pacific beat Q2 estimates as EPS rose 8.5% and revenue increased 11.5% year over year.UNP grew freight revenues 12%, led by pricing gains, higher fuel surcharge revenue and volume growth.UNP expects high-single digit EPS growth in 2026 with operating ratio improvement and $3.3B capex. Union Pacific Corporation (UNP - Free Report) reported impressive second-quarter 2026 results, wherein both the earnings and revenues beat the Zacks Consensus Estimate.

Quarterly earnings (excluding 5 cents from non-recurring items) of $3.41 per share beat the Zacks Consensus Estimate by 2.8% and increased 8.5% on a year-over-year basis.

Operating revenues of $6.86 billion beat the Zacks Consensus Estimate of $6.65 billion and rose 11.5% on a year-over-year basis, driven by core pricing gains, volume growth and higher fuel surcharge revenues, partially offset by business mix. Revenue carloads declined 1% year over year.

Freight revenues (accounting for 95% of the top line) increased 12% year over year to $6.52 billion. Other revenues increased 11% year over year to $346 million in the second quarter of 2026.

Operating income increased 9% year over year to $2.76 billion. Total operating expenses of $4.10 billion inched up 13% year over year. Fuel expenses rose 63% year over year. Expenses on purchased services and materials increased 10% on a year-over-year basis, while expenses on compensation and benefits decreased 1% year over year.

The operating ratio (operating expenses as a percentage of revenues) in the second quarter of 2026, on an adjusted basis, improved 110 basis points year over year to 59.2%.

UNP’s Segmental HighlightsBulk (Grain & grain products, Fertilizer, Food & refrigerated, Coal & renewables) freight revenues were $2.04 billion, which increased 7% on a year-over-year basis. Segmental revenue carloads decreased 1% year over year to $514 million.

Industrial freight revenues totaled $2.39 billion, up 8% year over year. Segmental revenue carloads increased 3% year over year to $586 million.

Freight revenues in the premium division were $2.08 billion, up 21% year over year. Premium revenue carloads increased 4% year over year to $1.06 billion.

UNP’s LiquidityUnion Pacific exited the second quarter of 2026 with cash and cash equivalents of $1.16 billion compared with $1.27 billion at the quarter's end of 2026. Debt (due after a year) of $29.04 billion was down 4.14% compared with the December-quarter end of 2026 actuals.

UNP’s 2026 OutlookFor 2026, earnings per share are expected to register high-single digit growth, consistent with attaining the three-year CAGR target of high-single digit to low-double digit growth through 2027.

UNP further anticipates operating ratio improvement. Capital expenditure is expected to be approximately $3.3 billion. UNP aims to continue generating strong cash while increasing annual dividend payouts.

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

Q2 Performances of Other Transportation CompaniesWestinghouse Air Brake Technologies (WAB - Free Report) , operating as Wabtec Corporation, reported encouraging second-quarter 2026 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year.

Quarterly adjusted earnings of $2.76 per share beat the Zacks Consensus Estimate of $2.63 by 4.9% and increased 21.6% year over year, owing to higher sales and operating margin expansion.

Revenues climbed 17.5% to $3.18 billion and surpassed the consensus mark of $3.08 billion by 3.2%.

United Airlines Holdings, Inc. (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 total revenue per available seat mile or TRASM, and broad-based gains across premium, loyalty and cargo revenues supported the top line despite sharply higher fuel costs.

J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported second-quarter 2026 earnings of $1.91 per share, up 45.8% from $1.31 a year ago. The figure beat the Zacks Consensus Estimate of $1.71 by 11.7%.

Operating revenues climbed 19.4% year over year to $3.50 billion and surpassed the consensus mark of $3.19 billion by 9.5%. Higher volumes and pricing across several businesses supported growth, led by a 10% increase in Intermodal loads.

HomeStock IdeasLong IdeasTech 

SummaryServiceNow delivered strong Q2 results, surpassing revenue and EPS estimates, with subscription revenue up ~25% YoY and growing high-value customer momentum.GAAP subscription gross margins deteriorated sharply in Q2. On paper, this massive deterioration looks threatening.I discuss why looking at the reported GAAP gross margin hides some important details buried deep in the earnings report. After all, the gross margin decline looks worse than it is.The bear argument for ServiceNow is centered on its deteriorating gross margin and technology disruption. JHVEPhoto/iStock Editorial via Getty Images

AI has made life difficult for SaaS companies. Well, at least for the majority of them. Apart from Palantir Technologies Inc. (PLTR), which has increasingly positioned itself as a business transformation solutions provider, not a SaaS company, SaaS stocks have suffered

13.17K Followers

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NOW over 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.

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.

Are momentum stocks on the verge of a major recovery? Consider this: the iShares MSCI USA Momentum Factor ETF (CBOE:MTUM) fell from $345.22 on June 22 to $302.09 on Friday, July 17, and has rebounded since. The fund sits unchanged today at $314.65 and up 24% year to date (YTD). (Note that MTUM is an unleveraged fund that periodically rebalances with volatile, shifting factor exposure.)

If last Friday’s low marked the bottom for the momentum trade, the most beaten-down high-momentum names could see outsized upside. However, a triple from today’s prices remains a very high bar, especially for unprofitable companies. Two of the three names below are unprofitable on a trailing basis, and the third is a large, richly valued software company where tripling is difficult.

Investors can treat the “could triple” idea as a high-risk, speculative, multi-year bull case, not a forecast. It mainly depends on the momentum rebound holding and each individual thesis playing out. Here are three ranked candidates.

3. ServiceNow (NOW) ServiceNow (NYSE:NOW | NOW Price Prediction) stock trades at $94.04, down 39% YTD, giving it a TTM P/E ratio of 59x on TTM EPS of $1.60. The bull case rests on agentic AI orchestration becoming a durable growth pillar, much like cybersecurity software has stayed resilient through broader software-sector weakness.

ServiceNow delivered a strong Q2 FY2026 with revenue of $3.987 billion, up 24% year over year (YoY), and CEO Bill McDermott stated that “agentic deployments of ServiceNow AI increased ninefold in just nine months.” A Wall Street analyst target of $138.84 implies meaningful upside.

The risk is ServiceNow’s size. With a market cap above $98 billion, a triple would require the company to sustain premium AI growth for years while software multiples expand. Reddit’s r/investing community has debated whether AI capex is crowding out software demand.

2. Wolfspeed (WOLF) Wolfspeed (NYSE:WOLF) stock is up 51% YTD to $26.33, with no TTM P/E because Wolfspeed remains unprofitable on TTM EPS of -$13.28. The bull thesis centers on a vertically integrated silicon carbide supply chain that could inflect as SiC adoption ramps in AI data centers, industrial electrification, and grid modernization.

Following Chapter 11 emergence, Wolfspeed cleaned up its balance sheet, cutting total liabilities by 71% YoY and reducing annual interest expense by $62 million. CEO Robert Feurle highlighted the launch of the “first commercially available 10 kV silicon carbide power MOSFET” alongside a next-generation TOLT portfolio and 300mm substrate platform.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and ServiceNow didn't make the cut. Grab the names FREE today.

However, the risk profile shouldn’t be overlooked. Wolfspeed stock carries deeply negative EPS, negative gross margins, and bearish Wall Street coverage with a Strong Sell in the mix and analyst target of $30. Reddit sentiment on WOLF was consistently bearish across all tracked periods earlier this month, underscoring how speculative this SiC recovery story remains.

1. Navitas Semiconductor (NVTS) Navitas Semiconductor (NASDAQ:NVTS) stock is up 70% YTD to $12.13, with no TTM P/E (unprofitable) and TTM EPS of -$0.63. Recent showcases include 800V power delivery boards debuted at NVIDIA (NASDAQ:NVDA) GTC and a 250 kW solid-state transformer with EPFL, part of a broader pivot into gallium nitride and high-voltage silicon carbide.

CEO Chris Allexandre stated that Navitas is “continuing to pivot away from mobile and consumer to focus on high-power markets with our GaN and high-voltage SiC solutions.” Navitas’s management targets a $3.5 billion serviceable addressable market by 2030 growing at a 60%+ compound annual growth rate (CAGR) across AI data center, grid, performance computing, and industrial electrification.

Navitas stock fell hard in the recent momentum sell-off, making it the highest-torque rebound candidate with a beta of 3.815. The risk is equally sharp: Navitas has no profits, a price-to-sales ratio above 76x, and revenue that fell 39% YoY in the most recent quarter as management winds down legacy consumer business.

Polymarket currently prices a 76% probability that Navitas beats its upcoming non-GAAP EPS estimate. Yet, even with a favorable setup, Navitas would need years of execution on the AI-power and grid-infrastructure roadmap for a share-price triple to materialize.

The Momentum Rebound Hypothesis The three names tie together under a single hypothesis: if the July 17 momentum low in the MTUM ETF holds, the highest-beta stocks inside the momentum factor could bounce hard from oversold levels. A tripling scenario is enticing as a speculative, multi-year bull case, but it requires both the factor rebound to stick and each company’s road map to execute cleanly.

Should the July 17 low fail, these high-beta names could fall just as fast as they’ve bounced. Cautious, modest position sizing is appropriate given the volatility across NVTS, WOLF, and NOW stocks.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and ServiceNow didn't make the cut. Grab the names FREE today.

Contact [email protected] for any questions or corrections.

Defense prime contractors are ripping higher Thursday on beat-and-raise quarters that underscore resilient demand and record backlogs even as the broader market slides.

iShares U.S. Aerospace & iShares U.S. Aerospace & Defense ETF (BATS:ITA) also rose and both Lockheed and RTX stocks remain up more than 30% over the past year.

Lockheed Martin‘s Record OrdersTHAAD Contract Boosts Long-Term ProspectsImage: Shutterstock

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Item 1 of 3 U.S. Secretary of the Army Christine Wormuth speaks near a Terminal High Altitude Area Defense (THAAD) missile and the Pac-3 Missile Segment Enhancement during the Association of the United States Army annual meeting and exposition at the Walter E. Washington Convention Center in Washington, U.S., October 14, 2024. REUTERS/Nathan Howard/File Photo

[1/3]U.S. Secretary of the Army Christine Wormuth speaks near a Terminal High Altitude Area Defense (THAAD) missile and the Pac-3 Missile Segment Enhancement during the Association of the United States... Purchase Licensing Rights, opens new tab Read more

WASHINGTON, July 23 (Reuters) - The world's two biggest defense contractors, Lockheed Martin and RTX, said on Thursday they expect strong profits going forward because a wave of global conflicts from Iran to Ukraine has depleted Pentagon stockpiles that will need replenishing.

Investors cheered ​the news, pushing shares of Lockheed (LMT.N), opens new tab up 10.6% and boosting RTX (RTX.N), opens new tab 7.7%.

The Reuters Iran Briefing newsletter keeps you informed with the latest developments and analysis of the Iran war. Sign up here.

President Donald Trump has been urging defense contractors to ‌increase production as the U.S.-Israeli war on Iran and a prolonged Russia-Ukraine conflict drain the Pentagon's inventory.

Trump has also proposed a record $1.5 trillion military budget for fiscal 2027. The U.S. House of Representatives this week passed its version of a massive defense policy bill that would authorize an unprecedented $1.15 trillion in spending for the military.

Demand is expected ​to remain strong. The U.S. has used more than 50,000 rockets, missiles and rocket-propelled munitions since the start of the Russia-Ukraine ​conflict in 2022 and throughout the U.S. attack on Iran, which began on February 28, according to Pentagon ⁠data.

Lockheed's missiles and fire control revenue rose nearly 20% to $4.1 billion, driven by a production ramp-up of its PAC-3 and precision strike missiles, ​both of which have been used in the war on Iran in the last few months. The segment was also helped by higher production ​of its THAAD missile interceptors, after the company signed a $35 billion contract with the U.S. government in June to quadruple output.

"The government is giving us a lot more flexibility than they traditionally would have done... so that we can be faster," Lockheed Martin's CEO Jim Taiclet said on the post-earnings call.

"That's what I hear ​from the deputy secretary every time we get together and beyond: faster, faster, faster," he added, referring to U.S. Deputy Secretary of Defense Steve ​Feinberg.

Lockheed's total backlog — orders yet to be produced — grew to $230.4 billion, up 38.3% from $166.5 billion last year.

"We're in active dialogue looking at other potential opportunities. We ‌do see ⁠a real opportunity here for more partnerships to scale production faster, particularly in Europe," Lockheed CFO Evan Scott said on a call with Reuters.

The company now expects 2026 revenue between $79.75 billion and $81.75 billion, up from a prior range of $77.5 billion to $80 billion, and above analyst expectations of $79.14 billion, according to LSEG data.

At RTX, backlog rose 22% from a year earlier to $289 billion, including $170 billion in commercial aerospace orders and $119 billion in defense. ​Demand for aircraft maintenance, repair and ​overhaul services has remained strong ⁠as supply-chain snags and delayed deliveries have forced airlines to keep older, more expensive fleets flying longer.

Sales at Raytheon, RTX's weapons business, rose 18% to $8.27 billion, helped by demand for Patriot, Standard and AMRAAM missile systems.

"About ​half of (Raytheon's) bookings in the first half of the year, $10 billion, came from international customers. Of that $10 ​billion, $7 billion came ⁠from European customers," RTX Chief Financial Officer Neil Mitchill told Reuters.

RTX now expects 2026 adjusted sales of $95 billion to $96 billion, up from $92.5 billion to $93.5 billion, above analyst estimates of $94.08 billion. It raised its adjusted profit forecast to $7.10-$7.25 per share, from $6.70-$6.90 previously.

About two-thirds of the increase in RTX's annual profit guidance ⁠comes from ​Raytheon, and another roughly 25% from Collins, the airplane components business, said Seth Seifman, analyst ​at JPMorgan.

RTX CEO Chris Calio said on the post-earnings call the company saw potential opportunities in the Middle East amid current developments, noting that RTX had strong customer relationships in ​both the Middle East and Europe.

Both companies topped Wall Street's second-quarter estimates.

Reporting by Mike Stone in Washington; editing by Chris Sanders and Nia Williams

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Mike Stone is a Reuters reporter covering the U.S. arms trade and defense industry. Most recently Mike has been focused on the Golden Dome missile defense shield. Mike also spends a lot of his time writing on Ukraine and how industry has adapted, or faltered as it supports that conflict. Mike, a New Yorker, has extensively covered how the U.S. has supplied Ukraine with weapons, the cadence, decisions and milestones that have had battlefield impacts. Before his time in Washington Mike’s coverage focused on mergers and acquisitions for oil and gas companies, financial institutions, defense companies, consumer product makers, retailers, real estate giants, and telecommunications companies.

Lockheed Martin (LMT +10.00%) stock surged ahead 9% through 1:22 p.m. ET Thursday after crushing on earnings this morning.

Analysts expected Lockheed to report $7.23 per share in profit on $19.4 billion in sales for Q2 2026. Instead, Lockheed earned $7.94 per share on $20.1 billion in sales -- and then raised guidance.

Image source: Lockheed Martin.

Lockheed Martin Q2 earnings Lockheed grew its sales 11% year over year, while profits surged an astounding 444%, rebounding from weak profits a year ago that were burdened by losses on "a classified program at Aeronautics" as well as a pair of helicopter programs for foreign customers. Sales increased in all four of the company's main business divisions, and year-ago losses at Aeronautics and Rotary and Mission Systems (those were the helicopter programs) were erased.

Free cash flow flipped from negative $150 million to positive $2.9 billion.

So you can understand why investors were pleased.

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What's next for Lockheed Martin stock Turning next to guidance, Lockheed kept the good news coming.

Full-year sales previously forecast to fall below $80 billion will now more likely approximate $80.8 billion, plus or minus $1 billion. Earnings will similarly be about $0.50 per share better than forecast -- between $29.95 and $30.65. Free cash flow for the year should range from $7 billion to $7.2 billion, also ahead of prior expectations.

All things considered, Lockheed is doing its darnedest to prove out my optimism about the stock. Although the shares still look a little pricey when valued on GAAP profit, the strong cash production has Lockheed stock trading for only about 16.5x free cash flow.

Between its 11% sales growth rate and near-3% dividend yield, I still believe Lockheed stock is cheap enough to buy,

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.

Reliance, Inc. (RS) Q2 2026 Earnings Call Transcript

Investors looking for stocks in the Aerospace - Defense sector might want to consider either General Dynamics (GD - Free Report) or GE Aerospace (GE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

General Dynamics and GE Aerospace are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that GD's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

GD currently has a forward P/E ratio of 22.40, while GE has a forward P/E of 43.63. We also note that GD has a PEG ratio of 2.25. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GE currently has a PEG ratio of 2.64.

Another notable valuation metric for GD is its P/B ratio of 3.87. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, GE has a P/B of 19.81.

Based on these metrics and many more, GD holds a Value grade of B, while GE has a Value grade of D.

GD has seen stronger estimate revision activity and sports more attractive valuation metrics than GE, so it seems like value investors will conclude that GD is the superior option right now.

By PYMNTS  |  July 23, 2026

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A collection of crypto and finance companies have launched a bitcoin-focused security initiative.

The Bitcoin Security Consortium, announced in a news release Thursday (July 22), is backed by $15 million in pledges for its members, and is designed to promote the long-term security and survival of the bitcoin network.

The group’s founding members include Anchorage Digital, ARK Invest, BlackRock, Block, Blockstream, Coinbase, Fidelity Digital Assets, Galaxy and Strategy.

“As long-term holders, we have every incentive to see Bitcoin remain secure for generations,” said Strategy CEO Phong Le. “Funding the people who do this work, and helping inform the conversation around it, is a natural way for us to contribute.”

According to the release, the consortium will help fund and support researchers and developers working on bitcoin security, including the work of getting it ready for quantum computing.

“Large-scale quantum computers capable of threatening Bitcoin’s cryptography do not exist today, and credible estimates place such capability years away,” the release added. “Preparing post-quantum protections is nonetheless a meaningful long-term priority, and one the Bitcoin technical community is already actively working on.”

The consortium says it is modeled on the industry’s support of open-source software, providing resources and awareness without controlling the underlying work.

“It does not develop or direct bitcoin’s protocol, takes no position on specific protocol changes, and does not speak for bitcoin or its developers,” the release added. “Bitcoin’s development is, and will remain, the work of a global, decentralized community of contributors.”

The announcement follows a report earlier this month from Reuters that the cryptocurrency sector was preparing defenses against quantum computing-related threats, out of concerns that the technology could circumvent the cryptography protecting crypto transactions and digital wallets.

As that report noted, the $2 trillion crypto space already has a history of hacks. Quantum computing could aggravate that problem, as it could be used to unscramble the standard digital encryption methods.

Meanwhile, PYMNTS wrote in May that the factors destabilizing digital assets are the same ones affecting a variety of sectors, trucking logistics networks, eCommerce companies, industrial supply chains, financial institutions and enterprise software systems among them.

“The infrastructure designed to establish trust online, from passwords and digital certificates to vendor onboarding systems and payment rails, is increasingly vulnerable to industrialized fraud, AI-enabled impersonation and next-generation cryptographic threats,” that report said.

Key Takeaways V.F. Corp. is expected to post a 4.9% revenue decline and a narrower fiscal Q1 loss.The North Face, Timberland and Altra growth may partly offset continued weakness at Vans.Gross margin gains may be outweighed by higher SG&A, with an operating loss near $100 million. V.F. Corporation (VFC - Free Report) is scheduled to report first-quarter fiscal 2027 results on July 29, before the opening bell. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.68 billion, indicating a 4.9% dip from the prior-year quarter’s figure.

The consensus estimate calls for a loss of 22 cents per share, narrowing from a loss of 24 cents in the year-ago quarter. The metric has been stable in the past 30 days.

V.F. Corp. delivered an earnings surprise of 100% in the last reported quarter. In the trailing four quarters, the company’s earnings beat the Zacks Consensus Estimate by 47.5%.

Key Factors to Influence VFC’s Q1 ResultsV.F. Corp.’s first-quarter fiscal 2027 results are likely to reflect continued strength in its growth brands, led by The North Face, Timberland and Altra. Management expects these brands to benefit from sustained investments in product innovation, marketing and direct-to-consumer ("DTC") initiatives. The North Face is expected to maintain healthy momentum across categories, while Timberland should continue benefiting from stronger full-price sales and store expansion. Altra is also likely to remain a key growth driver, supported by product launches and increasing brand awareness. These factors are expected to partially offset continued weakness in Vans and support the company's long-term growth strategy.

The quarter is expected to remain pressured by continued softness at Vans. Management projects first-quarter revenues to decline low-single digits, primarily due to wholesale timing shifts that pulled certain orders into the fourth quarter of fiscal 2026. In addition, the company expects the first half of fiscal 2027 to remain weaker than the second half, with wholesale demand still recovering. While Vans' Americas DTC business continues to improve, management believes wholesale recovery will take longer as new product momentum gradually translates into higher sell-in across retail partners.

Investors will also closely watch VFC's profitability trends. The company expects gross margin expansion in the first quarter, supported by pricing actions, improved inventory management, better product mix and operational efficiencies. However, these gains are expected to be more than offset by higher SG&A expenses as VFC continues investing aggressively in marketing, DTC capabilities and Altra to support long-term growth. Consequently, management expects an operating loss of roughly $100 million for the quarter, which is incorporated into its full-year guidance.

Macroeconomic challenges are also expected to remain a headwind during the quarter. Management cited ongoing geopolitical disruptions in the Middle East, softer demand in Europe and uncertainty surrounding tariffs as factors likely to pressure first-half revenue trends. Although VFC has implemented sourcing diversification, pricing actions and supply-chain mitigation initiatives to lessen the tariff impact, these external factors are expected to weigh on near-term performance. Nevertheless, management reiterated confidence in achieving full-year revenue growth, expanding operating margins and progressing toward its medium-term financial targets.

What the Zacks Model Unveils for VFCOur proven model doesn’t conclusively predict an earnings beat for V.F. Corp. 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’s not the case here.

V.F. Corp. currently has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell). You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Valuation Picture of VFC StockGoing by the price/earnings ratio, VFC stock is currently trading at 14.48 on a forward 12-month basis, lower than the Textile - Apparel industry’s 15.67. It is also trading lower than its high of 21.42.

Image Source: Zacks Investment Research

The recent market movements show that VFC’s shares have lost 14.2% in the past six months compared with the industry's 1.5% drop.

Image Source: Zacks Investment Research

Stocks Poised to Beat Earnings EstimatesHere are some companies that, according to our model, have the right combination of elements to post an earnings beat:

SharkNinja, Inc. (SN - Free Report) currently has an Earnings ESP of +1.29% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

SN is likely to register growth in its bottom and top lines when it reports second-quarter 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.6 billion, indicating a 13.5% increase from the figure reported in the year-ago quarter.

The consensus estimate for SN’s second-quarter earnings is pegged at $1.09 per share, implying 12.4% growth from the year-ago quarter’s actual. The consensus mark has dipped a penny in the past 30 days.

MGM Resorts International (MGM - Free Report) currently has an Earnings ESP of +3.32% and a Zacks Rank of 3. MGM is likely to register a top-line increase when it reports second-quarter 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $4.5 billion, indicating a 1.4% rise from the figure reported in the year-ago quarter.

The consensus estimate for MGM Resorts’ second-quarter earnings is pegged at 62 cents a share, implying a 21.5% decrease from the year-earlier quarter. The consensus mark has increased by 2 cents in the past seven days.

Hilton Worldwide, Inc. (HLT - Free Report) currently has an Earnings ESP of +1.54% and a Zacks Rank of 3.

For the to-be-reported quarter, Hilton Worldwide’s earnings are expected to increase 3.6%. Hilton Worldwide reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 4.6%.

S&P Global is a leaner, higher-margin, and likely higher-growth company post-Mobility spin-off. Ratings and Indices segments are benefiting from robust issuance, record ETF inflows, and index performance, driving expected Q2 acceleration. My Q2 revenue growth estimate of 11.7% outpaces consensus.