, /PRNewswire/ -- Lockheed Martin (NYSE: LMT) in Marietta, Georgia, marked its 75th anniversary as a U.S. Center for Manufacturing Excellence June 17, showcasing cutting‑edge technology and innovation that will sustain the facility's mission of delivering solutions for the nation and its allies for generations to come.
Trish Pagan, vice president of Lockheed Martin's Air Mobility and Maritime Missions and general manager Marietta site, addresses guests celebrating the 75th anniversary of Lockheed Martin's Marietta manufacturing facility. In the background, Lockheed Martin employees line up to see the iconic C-130J Hercules and 5th Generation Fighter F-22 Raptor, both made in Marietta. "For 75 years, our team at Marietta has evolved to meet the needs of our customers, nation, and a changing world, pioneering airpower solutions that strengthen global security," said O.J. Sanchez, Lockheed Martin Aeronautics president. "We honor a legacy built on excellence, commitment, community and innovation while looking toward the next 75 years of developing and delivering capabilities that matter."
Lockheed Martin's Marietta site and its C-130 production line hold the distinction and world record for the longest continuously running military aircraft production line in history. While the C-130 has been foundational to the site's success for decades, the site's influence and impact continues to grow, to include involvement in Skunk Works projects.
"For 75 years, Lockheed Martin has helped strengthen our nation's security and Georgia's economy, and today's announcement of 1,200 new Marietta-based jobs is another milestone in that enduring partnership," said Gov. Brian Kemp, keynote speaker at the ceremony, and joined by family. "These new jobs are creating meaningful careers for hardworking Georgians while supporting production of world-class aircraft like the C-130J Super Hercules and F-35 Lightning II, equipping America's service members and our allies with next-generation capabilities."
U.S. Rep. Barry Loudermilk also addressed present and former employees of the site on a stage flanked by static displays of iconic aircraft proudly made in Marietta, including the first fifth-generation fighter, the F-22 Raptor, and the C-130J Super Hercules.
A well-established global defense contractor, Lockheed Martin generated $4.5B in economic impact for the state in 2025 and employs 5,600 people. The Marietta site serves as a global hub that offers production, sustainment, and a resilient supply chain for U.S. and international customers. At the same time, the facility provides an anchor for the U.S. and state of Georgia economy and workforce.
"Lockheed Martin is a beacon of American ingenuity that fuels our national defense and strengthens the capabilities of our allies," said Loudermilk, who spoke at the event. "As we celebrate 75 years of excellence, we reaffirm our commitment to sustaining this world-class business for future generations."
While the ceremony and milestone highlighted past missions, Lockheed Martin's future remained in focus. Today, the site remains at the forefront of aerospace manufacturing, producing the "Built to Deliver. Built to Last.™" C-130J and center wing assembly for the world's most advanced fighter, the F-35. Ongoing and future work associated with Skunk Works®, were noted as important to future plans for the Marietta site. An expedition hall showcased the future, to include a model of Lockheed Martin Vectis™, a survivable and flexible collaborative combat aircraft.
"In Georgia, innovation does not replace legacy—it builds upon it," said Trish Pagan, vice president of Air Mobility and Maritime Missions and general manager Marietta site. "The C-130's origin story was born of Skunk Works ingenuity and the Marietta site's destiny and growth will be informed by innovation. Our legacy is defined by our ability to evolve, meeting the changing demands of our customers and the security challenges of each generation. We will remain at the forefront of delivering the next generation of capabilities while building on a foundation of proven performance."
In addition to its global business impact, Lockheed Martin employees donate 21,000 volunteer hours to the community and provide charitable donations to several organizations in the metro-Atlanta area. Lockheed Martin also partners with several technical colleges and universities to help create the workforce of the future through internships, apprenticeships and highly regarded STEM initiatives.
"As we celebrate 75 years, we do so with pride in our history and a clear vision for our future," Pagan said. "The Lockheed Martin story in Marietta is a story of growth, innovation, and adaptability. Whether it is locally or worldwide, we take pride in delivering and evolving our products and services, and remaining on the leading edge."
For more information on Lockheed Martin's Marietta history, mission or a virtual plant tour, visit here: https://www.lockheedmartin.com/en-us/who-we-are/business-areas/aeronautics/marietta-media-kit.html
About Lockheed Martin
Lockheed Martin is a global defense technology company driving innovation and advancing scientific discovery. Our all-domain mission solutions and 21st Century Security® vision accelerate the delivery of transformative technologies to ensure those we serve always stay ahead of ready. More information at Lockheedmartin.com.
The general assumption is that a peace deal between the United States and Iran will hurt defense stocks. But it's not that simple. In fact, it's not really about whether the fighting stops now. It's about whether governments will continue spending on defense over the next decade.
It's not just one war Lockheed Martin (LMT +2.04%) has long benefited from demand for defense systems during peacetime and wartime. Over the past 40 years, shares of Lockheed Martin have climbed 2,500%. And while there hasn't been a complete lack of military conflict over the last four decades, the military demands have varied. Yet that has never changed the long-term trajectory of the stock.
In 2025, the company ended the year with a record backlog of approximately $194 billion, giving it years of contracted work already in hand. Lockheed also generated $75 billion in revenue during 2025, up about 6% from the prior year. Management expects sales to climb to between $77.5 billion and $80 billion in 2026.
That is not trivial, and an end to the war with Iran won't suddenly erase existing orders for fighter jets, missile-defense systems, helicopters, satellites, and other military hardware. In fact, many of Lockheed's most important programs don't rely on any single conflict.
Image source: Getty Images.
Take the F-35, for example, which remains the backbone of air forces around the world. Lockheed delivered a record 191 F-35 aircraft in 2025, and the company still has hundreds of aircraft remaining in its production backlog.
Meanwhile, recent events in the Middle East have highlighted the importance of missile defense, as Iran's extensive use of ballistic missiles has reinforced demand for systems such as THAAD (Terminal High Altitude Area Defense) anti-ballistic missile defense system and Patriot interceptors.
In January, Lockheed signed an agreement with the Pentagon that could increase THAAD interceptor production capacity from 96 missiles annually to as many as 400. That's not an insignificant increase. And that's why you should not assume that peace automatically translates into lower defense spending.
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In some cases, the opposite can happen. Countries that witnessed the conflict, for example, may decide they now need larger missile inventories, stronger air defenses, and more advanced surveillance capabilities.
In fact, Forecast International recently estimated that more than $21 billion in prospective foreign military sales involving Lockheed Martin and RTX Corporation (RTX +2.55%) were approved for Middle Eastern partners during the first quarter of 2026 alone.
We've been here before Reports indicate this latest deal establishes a 60-day ceasefire framework and begins discussions regarding Iran's nuclear program. However, major issues remain unresolved, including Iran's ballistic missile capabilities, regional proxy forces, and longer-term security arrangements.
In other words, geopolitical risk hasn't disappeared. It's simply changed form. Of course, this doesn't mean defense stocks are immune to downside risk. If the ceasefire evolves into a durable diplomatic settlement and tensions continue to ease across the region, some investors may rotate away from defense contractors and toward sectors that benefit more directly from lower energy prices and improving economic growth.
But for Lockheed Martin, the bigger story remains demand visibility. A company with nearly $194 billion in backlog doesn't rely on a single conflict to justify its valuation. Multiyear procurement programs, international defense partnerships, and modernization efforts across Europe, Asia, and the Middle East all support the business.
So while the Iran peace deal may reduce some of the near-term urgency that helped drive defense spending earlier this year, it probably doesn't change the long-term investment thesis for Lockheed Martin. If anything, the conflict may have reinforced the reasons many countries continue to invest heavily in missile defense, advanced aircraft, and military readiness. And those remain some of Lockheed Martin's most important businesses.
Lockheed Martin (LMT +2.04%) stock fell 4.2% through 11:30 a.m. ET Thursday -- and it's no mystery why.
President Trump announced yesterday that the U.S. and Iran have signed an "interim agreement" to end their conflict. While it may be hard to answer the age-old question "war, huh, what is it good for?," investors today seem to think ending the Iran war will be bad news for Lockheed Martin stock.
Image source: Lockheed Martin.
Details on the agreement Details are in flux, and the interim agreement may not resolve much, as it merely starts a 60-day period of more intense negotiations surrounding the status of the Strait of Hormuz and the fate of Iran's nuclear weapons program. Still, the broad outlines look like this:
The U.S. naval blockade on Iran will end. Iran may resume foreign sales of oil. Other countries' ships have 60 days' free passage through the Strait of Hormuz. S. sanctions on Iran will lift. Previously frozen Iranian bank accounts will unfreeze. And Iran will set up a $300 billion reconstruction fund. Not much of this is immediately relevant to Lockheed Martin stock, but knowing the details is important for context, so investors can gauge the chances that both sides will believe they're getting enough out of this peace deal for it to hold together permanently.
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What this means for Lockheed Martin stock So, how is the peace deal relevant to Lockheed investors? Well, if peace holds and fighting doesn't resume, this might depress demand for new weapons from Lockheed. There is still the matter of replacing other weapons already used and restocking U.S. arsenals, however, and this is already yielding billions of dollars in sales for Lockheed.
If you ask me, this peace deal won't be as bad news for Lockheed as investors seem to think.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.
Certain sectors receive more positive attention from stock investors than others. That's only natural when things are going well.
Right now, with the buzz surrounding artificial intelligence (AI), technology stocks have been strong performers. The S&P 500 Information Technology sector's 17.5% gain this year (through June 12) has dwarfed the S&P 500 ex-Information Technology's 3.8% rise. Those kinds of gains may tempt investors, but technology stocks have always been volatile and challenging to pick out long-term winners.
For those looking for steadier, long-term stock price gains and regularly increasing dividends, these two industrial sector stocks below fit the bill. You may not see fast appreciation, but you'll do well over time from these solid companies. It's time to uncover why they deserve your investment.
Image source: Getty Images.
1. Lockheed Martin Lockheed Martin (LMT +2.04%) develops and manufactures items like military aircraft, air and missile systems, military and civilian helicopters, and satellite systems. It primarily sells its product to the U.S. government (72% of 2025 sales).
The company is particularly reliant on the Department of Defense, which made up 63% of the company's total sales. That means Lockheed Martin's top line is sensitive to the government's defense spending, which gets approved through Congress. That may give some investors pause, given the ever-changing political whims. However, while defense spending varies, it's always a main part of the U.S. budget, including this year's more than $950 billion.
Lockheed Martin's first-quarter sales totaled $18 billion, edging up 0.3% from the previous year. But the tepid sales were influenced by certain delays, so that shouldn't scare you off. Management expects steady, if unspectacular, sales growth of 3% to 7% for the year, reaching $77.5 billion to $80 billion.
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Shareholders can also look forward to receiving dividends that increase regularly. In fact, last October, the company announced that the board of directors approved an impressive 5% hike in the quarterly rate to $3.45 a share. This marked 23 straight years of increases. With a payout ratio of 65%, which compares dividends to earnings, investors can feel confident in Lockheed Martin's ability to pay dividends.
The stock has a 2.6% dividend yield, well above the S&P 500 index's 1.1%.
2. RTX RTX (RTX +2.55%) was formed following the 2020 merger between Raytheon Company and United Technologies. The current business spans aerospace and defense manufacturing, including technologically advanced products, aircraft engines, and defense systems like missiles.
Sales to the U.S. government accounted for 38% of last year's sales, down from 46% in 2023. International customers accounted for 47% of sales in 2025. That sales mix provides some diversification.
While many large mergers fail to create value for shareholders, this one has done well. Since the deal's completion in April 2020, the shares returned 325.4%, including dividends, besting the S&P 500's 227.3%.
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And that doesn't seem set to end. Importantly, RTX continues to post solid results. First-quarter sales, adjusted to remove the impact of acquisitions and foreign-currency translations, grew 10% compared to last year. Management expects a solid 5% to 6% growth for all of 2026.
Meanwhile, the combined company has raised dividends annually since the merger's completion. Most recently, RTX increased its quarterly dividend by a sharp 7.4% to $0.73 a share this month.
That's certainly a positive sign about management's confidence in the future. Aside from the willingness to reward shareholders with higher dividends, RTX also has the ability to fund dividends from earnings, with a payout ratio of 51%.
Along with potential capital appreciation, shareholders will receive an above-market dividend yield. At the new rate, RTX's shares provide a payout of 1.6%.
On June 18, 2026, Lockheed Martin Corp (LMT) shares fell by 4.0% to a current price of $510.95. This decline is notable within the context of the stock's 52-wee
Lockheed Martin (LMT - Free Report) closed at $510.95 in the latest trading session, marking a -4.01% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 1.09%. Meanwhile, the Dow experienced a rise of 0.14%, and the technology-dominated Nasdaq saw an increase of 1.91%.
The stock of aerospace and defense company has risen by 1.86% in the past month, lagging the Aerospace sector's gain of 10.21% and overreaching the S&P 500's gain of 0.29%.
Analysts and investors alike will be keeping a close eye on the performance of Lockheed Martin in its upcoming earnings disclosure. On that day, Lockheed Martin is projected to report earnings of $7.09 per share, which would represent a year-over-year decline of 2.74%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $19.41 billion, up 6.9% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $29.88 per share and a revenue of $79.05 billion, demonstrating changes of +29.24% and +5.33%, respectively, from the preceding year.
It is also important to note the recent changes to analyst estimates for Lockheed Martin. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. At present, Lockheed Martin boasts a Zacks Rank of #3 (Hold).
With respect to valuation, Lockheed Martin is currently being traded at a Forward P/E ratio of 17.81. This indicates a discount in contrast to its industry's Forward P/E of 26.73.
Investors should also note that LMT has a PEG ratio of 0.96 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Aerospace - Defense industry had an average PEG ratio of 1.58.
The Aerospace - Defense industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 103, putting it in the top 43% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
Choosing between the world's largest defense contractors involves weighing steady government contracts against commercial aerospace recovery. You must decide whether Lockheed Martin (LMT +2.04%) or RTX (RTX +2.55%) offers better value today.
Lockheed Martin remains a premier choice for pure-play defense exposure, while RTX provides a more diversified mix of military and commercial aerospace technologies. Both companies are navigating a complex landscape of shifting geopolitical priorities and supply chain hurdles in 2026.
The case for Lockheed MartinLockheed Martin designs defense technologies across aeronautics, missiles, and space. It serves as a massive player among defense stocks, with a portfolio serving the U.S. Department of Defense and other federal agencies. The U.S. government accounted for nearly 72% of 2025 sales, and customer concentration like this adds a layer of risk to the business.
In FY 2025, revenue reached approximately $75.1 billion, representing growth of 5.7% over the previous year. This resulted in net income of just over $5 billion. The F-35 program remains the primary revenue driver, contributing nearly 27% of total sales and supporting international partnerships.
As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 3.2x. This ratio measures total debt relative to shareholders’ equity, indicating how much a company relies on borrowed money. Free cash flow reached $6.9 billion in the year. The current ratio, which compares assets to upcoming bills, is nearly 2.8x.
The case for RTX Corp.RTX operates through three main segments: Collins Aerospace, Pratt & Whitney, and Raytheon. It serves both commercial and government aviation markets, providing parts for manufacturers like Airbus and Boeing Co (BA 1.87%). This diversification makes it a unique player because it is less reliant on any single government program compared to its peers.
For FY 2025, revenue reached $88.6 billion, representing approximately 9.8% growth over the prior year. This helped the company generate net income of roughly $6.7 billion. International customers accounted for close to 47% of 2025 net sales, demonstrating global reach beyond domestic borders.
The December 2025 balance sheet showed a debt-to-equity ratio of approximately 0.6x, about the same ratio as today, indicating a balance between short-term assets and liabilities. Free cash flow for 2025 was $7.94 billion, representing the cash a company generates after covering its operating costs and capital expenditures.
Risk profile comparisonLockheed Martin is highly sensitive to U.S. government budget priorities, which can shift with political cycles. The company is also managing litigation risks, including a $4.25 billion lawsuit by SDR Group over hybrid airship business models. Additionally, the F-35 program carries ongoing risks related to cost overruns and technical performance schedules.
RTX is navigating global supply chain constraints and labor shortages, which are increasing costs and hindering production. The company is also subject to regulatory monitoring under agreements with the DOJ and SEC regarding pricing and anti-bribery compliance. Furthermore, the powder metal matter, a manufacturing defect, requires accelerated inspections for specific engine models through 2026, which impacts its Pratt & Whitney segment.
Valuation comparisonLockheed Martin currently trades at a significantly lower earnings multiple than RTX, though it offers a slightly lower net margin.
MetricLockheed MartinRTXSector BenchmarkForward P/E17x26.7x31.6xP/S ratio1.6x2.8xSector benchmark uses the SPDR XLI sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Lockheed Martin Corp is a core company in the middle of one of the biggest priorities in the U.S.: aerospace and defense. In particular, the F-35 fighter program remains a pillar of Lockheed’s business, with the Defense Department planning to continue to buy the jet into the 2040s. Having more than a quarter of revenue essentially guaranteed for 15 years or more is unheard of and quite appealing to a long-term investor.
RTX Corp benefits, too, from the U.S. focus on its military, which should provide a steady stream of business for the foreseeable future. However, RTX is still much more an amalgamation of parts than Lockheed. RTX consists of various vendors, such as engine maker Pratt & Whitney and Collins Aerospace. RTX was formed through the merger of Raytheon and United Technologies in 2020, so while the company has been executing well, there is still some work to be done in integrating the massive businesses.
That said, RTX is expected to be the fastest-growing of the two businesses this year, with revenue advancing about 6% to $90.1 billion, while Lockheed Martin’s sales are anticipated to grow about 5% to $79.1 billion.
Under the theory of buy good companies at good prices, Lockheed Martin gets the nod here. LMT is cheaper by the forward price-to-earnings and the forward price-to-sales ratios.
There's far more to warfare than guns and missiles. So, when thinking about defense stocks, it's important to look at every angle. On one side are traditional defense contractors, such as Lockheed Martin (LMT +2.04%), which develops and sells various weapons systems, vehicles, and other technologies to the United States government and its allies.
On the other side is Space Exploration Technologies (SPCX +1.61%), or SpaceX for short. SpaceX doesn't sell weapons, but artificial intelligence (AI) and rocket launches are paramount to defending the United States moving forward. The federal government accounted for approximately a fifth of SpaceX's total revenue in 2025.
It's hard not to like SpaceX's advantages in space and AI, arguably the greatest opportunities ahead for the defense industry. But which stock is the smarter long-term buy right now?
Image source: Getty Images.
Both companies have tremendous growth opportunities Space offers several growth opportunities for defense companies, including satellite constellations for communications and surveillance, orbital data centers, and the Golden Dome, a planned multilayered missile defense system featuring thousands of satellites equipped with sensors and interceptors.
SpaceX offers an infrastructure angle on space and AI. It's the world's de facto leader in rocket launch services and provides global connectivity through Starlink. It would likely remain quite busy as the government continues to expand its satellite constellations. According to SpaceX, AI is its greatest opportunity, and there's government traction there, too. Court documents recently revealed that the U.S. military utilized AI technology from SpaceX's xAI to aid in Operation Epic Fury in Iran.
Lockheed Martin also has a long history with the government, including several anti-missile munitions and systems, such as NGI and THAAD interceptors, PAC-3 air defense missiles, and the SBIRS critical missile-warning system. Investors will likely find the company's software, munitions, and sensors throughout the Golden Dome.
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SpaceX's ambitious goals are also its biggest risk Elon Musk is one of the greatest modern entrepreneurs, so it shouldn't come as a surprise that SpaceX is figuratively reaching for the stars. While preparing for its IPO, SpaceX estimated its total addressable market across space, connectivity, and AI at $28.5 trillion, though AI accounted for $26.5 trillion of that. The company's recent IPO raised approximately $85.7 billion in new capital, giving Elon Musk a financial war chest to make SpaceX's goals a reality.
The downside of all this hype and excitement is a stock valuation that raises the stakes for investors. SpaceX currently trades at a market cap of $2.4 trillion, more than 120 times its 2025 revenue. That makes SpaceX perhaps the most expensive stock on Wall Street. The company must deliver eye-popping growth, or the stock will probably struggle.
Lockheed Martin has a lower ceiling, but a much higher floor
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Lockheed Martin's growth is directly affected by federal defense spending. America will probably always need to spend to defend itself as long as it's a major world power, and Lockheed Martin will be there with weapons and technology through land, sea, air, and space. But the country's persistent fiscal deficit could undermine that, and each election cycle comes with uncertainty. All told, Lockheed Martin's ceiling just doesn't approach SpaceX's.
Fortunately, it doesn't come with SpaceX's price tag. You can value Lockheed Martin stock on its earnings since the company is profitable. With analysts calling for annualized earnings growth of 7% to 8% over the next three to five years, Lockheed Martin seems very fairly valued at 17 times its 2026 earnings estimates. Plus, investors receive a dividend with a solid 2.7% yield, adding to their total returns.
To be frank, SpaceX is a flashier company and has far greater growth potential than Lockheed Martin. But investing is just as much about the price you pay as it is the stock you buy. SpaceX might go on to do some amazing things. Unfortunately, I don't see investors profiting much with such a high valuation. If SpaceX winds up dropping, it's worth circling back. Right now, Lockheed Martin is likely the better buy, even for the long term.
Key Takeaways Defense contractors reported record backlogs as global military demand and orders accelerated.Lockheed Martin, GE Aerospace, and Boeing cited strong order growth and contracts.ETFs like IDEF offer diversified exposure to firms benefiting from rising defense spending. The global geopolitical landscape is fracturing at a rapid pace. From the ongoing Russia-Ukraine war to heightened cross-border hostility in regions like Pakistan-Afghanistan, and most recently, intensified attacks on Lebanon and escalating Iran-U.S. tensions, the world order is increasingly being shaped by hostile conflict.
This turbulent backdrop has triggered a fundamental shift in defense priorities worldwide, with nations rushing to bolster their military capabilities like never before.
Amid this environment, as governments across the globe are signing multi-year, multi-billion-dollar contracts for advanced weaponry and aerospace systems, defense primes like Lockheed Martin (LMT - Free Report) and BAE Systems (BAESY - Free Report) are seeing their order books swell to historic levels.
For investors, these robust backlogs are not just numbers — they indicate solid future revenue growth and profitability, setting the stage for a strong case to increase their exposure to exchange-traded funds (ETFs) holding these defense contractors. The convergence of rising geopolitical risks and robust corporate order books makes this a pivotal moment to consider investing in defense stocks.
But before we dive into the specific ETFs, let's first justify our thesis with empirical evidence. Understanding the sheer scale of this industry’s current order book as well as its growth prospects is essential to making an informed investment decision.
The Unprecedented Boom in Defense Order BacklogsOver the past year, the defense industry has seen an extraordinary accumulation of unfulfilled orders. Government defense spending is inherently cyclical and operates on a multi-year lag; a budget authorized today translates to contracts and revenues recognized years down the line. As a result, the primary financial indicator to watch right now is not immediate shipments, but the corporate backlog.
Major defense contractors have been posting figures that reflect this trend, underscoring the massive accumulation of demand.
For instance, Lockheed Martin, the world’s largest defense contractor, witnessed its first-quarter 2026 backlog rise 7.7% to a robust $186.4 billion, driven by strong customer demand for its combat-proven weapons.
The company has signed several framework agreements with the U.S. government in the first quarter to accelerate and scale munitions production, including advanced Patriot Missile, THAAD, and PrSM. To this end, LMT’s management expects the multi-year demand commitments defined in these framework agreements to support strategic investments in defense production infrastructure, while also enabling the company to increase production rates of these critical systems to three to four times the current levels.
Backlog of RTX Corp. (RTX - Free Report) , a well-known missile and radar manufacturer worldwide, came at a record $271 billion at the end of March 2026, out of which defense backlog amounted to $109 billion, representing year-over-year growth of 18.5%. The company is currently investing heavily to increase production of its critical munitions, including Tomahawk, AMRAAM, and Standard Missile family, over the next decade, to meet growing demand.
BAE Systems, a technology-led defence, aerospace and security solutions provider, recorded a backlog worth approximately $110.4 billion by 2025-end, which improved 7.5% from the prior-year level. This strong backlog growth was driven by notable order intakes like the $6.6 billion worth of Maritime orders for the company’s Submarines business, the next major phase of Canada’s River Class destroyer program, and Australia’s Hobart Class combat system upgrade, along with a $6 billion order from Türkiye for 20 Typhoon aircraft and weapons.
GE Aerospace (GE - Free Report) , a major provider of military jet engines, clinched orders worth $6.2 billion in the first quarter of 2026. The figure jumped 67% year over year, as governments across the globe continued to focus on modernizing and scaling their forces, thereby driving demand for the company’s products and services. Notable orders in the first quarter included a contract to supply T408-GE-400 engines for the U.S. Marine Corps' Sikorsky CH-53K King Stallion helicopter and another award from Turkish Aerospace Industries to continue integrating GE’s F404 engine into Türkiye's jet trainer Hurjet.
Boeing (BA - Free Report) , renowned for both its passenger aircraft and defense equipment, recorded a backlog worth $85.8 billion in the first quarter of 2026, reflecting a 39% year-over-year surge. BA signed a seven-year defense framework agreement to expand PAC-3 Seeker production and announced a strategic partnership with Rheinmetall to offer the MQ-28 Ghost Bat to Germany during the first quarter.
Defense ETFs to BuyAs per a report from the United Nations, global military spending could reach $4.7-$6.6 trillion by 2035, with the higher end of the projection, if achieved, being nearly five times the level at the end of the Cold War.
This unprecedented military spending surge, further corroborated by the massive influx of long-term orders, as mentioned above, provides unparalleled revenue growth visibility for defense contractors. Higher order book volume gives these defense contractors the stability required to scale up operations, maximize manufacturing efficiencies, and continuously expand their profitability margins over the next decade as they convert their backlogs into successful deliveries.
However, picking individual winners can be risky, considering single-stock operational risks, such as supply-chain bottlenecks or individual program delays. Instead, investors can gain exposure to this multi-year trend through the following Defense ETFs.
iShares U.S. Aerospace & Defense ETF (ITA - Free Report)
This fund, with net assets worth $14.21 billion, offers exposure to 49 U.S. aerospace and defense companies, including manufacturers of commercial and military aircraft. GE holds the first spot in this fund, with 21.91% weightage, while RTX holds the second spot with 14.68% weightage. BA holds 9.27% of shares in this fund, clinching the third spot, while LMT enjoys the seventh spot, holding 4.11% of shares.
ITA has surged 30.6% over the past year and charges 38 basis points (bps) as fees. It traded at a volume of 0.92 million shares in the last trading session.
This fund, with a market value worth $8.26 billion, offers exposure to 61 companies involved in the development, manufacturing, operations and support of US defense, homeland security and aerospace operations. GE holds the first spot in this fund, with 9.25% weightage, while BA holds the second spot with 8.47% weightage. RTX holds 7.19% of shares in this fund, clinching the third spot, while LMT enjoys the fourth spot, holding 6.1% of shares.
PPA has soared 28.1% over the past year and charges 58 as fees. It traded at a volume of 0.17 million shares in the last trading session.
iShares Defense Industrials Active ETF (IDEF - Free Report)
This fund, with net assets worth $4.08 billion, offers exposure to 114 companies that are well-positioned to benefit from global defense and security spending. RTX holds the first spot in this fund, with 8.05% weightage, while LMT holds the second spot with 6.76% weightage. BA holds 5.04% of shares in this fund, clinching the fourth spot, while BAESY enjoys the ninth spot, holding 2.68% of shares.
IDEF has rallied 18.7% over the past year and charges 55 bps as fees. It traded at a volume of 1 million shares in the last trading session.
On June 22, 2026, Lockheed Martin Corp (LMT) shares fell 3.4% and are currently priced at $493.60. The stock has experienced a significant decline of 6.9% over
The collaboration integrates Sentrycs' precise cyber-based detect-to-defeat capabilities to Lockheed Martin's Sanctum™ advanced modular defense architecture to enhance protection against evolving aerial threats
WEST PALM BEACH, FL / ACCESS Newswire / June 23, 2026 / Ondas Inc. (Nasdaq:ONDS) ("Ondas" or the "Company"), a leading provider of advanced autonomous systems and next-generation defense and security technologies, today announced a collaboration between its subsidiary, Sentrycs, a leader in counter-drone (C-UAS) technology based on Cyber-over-RF, and Lockheed Martin (LMT), a leading global defense and aerospace company.
Under the collaboration, Sentrycs' Cyber-over-RF technology will be integrated into Sanctum, Lockheed Martin's next-generation Counter-UAS (C-UAS) solution to protect military forces, homeland security, and critical assets against evolving unmanned aerial threats.
Sanctum tackles complex drone threats, including coordinated swarms and rapidly evolving UAS tactics. It combines advanced artificial intelligence, cloud-enabled data fusion, and a modular defense architecture to detect, track, analyze, and neutralize aerial threats in real time. Built for interoperability and mission flexibility, Sanctum integrates multiple sensors, effectors, and command-and-control systems into a unified operational framework, enabling scalable protection across a wide range of defense environments.
Under the collaboration, Sentrycs' solution will add a precise cyber-based detection and mitigation layer to Sanctum's multi-domain architecture.
Operating directly at the communication protocol layer, Sentrycs' Cyber-over-RF technology enables operators to detect, identify, track, and take control of unauthorized drones without jamming, spoofing, kinetic engagement, or collateral interference with surrounding communications and infrastructure. This highly targeted mitigation capability, which enables operators to take control of unauthorized drones and guide them to a safe landing without causing collateral damage or interfering with surrounding systems, strengthens the layered response options available to operators while supporting safe, controlled, and mission-adaptable counter-drone operations.
"Sanctum is a modular, open Counter-UAS architecture capable of rapidly integrating advanced sensing and mitigation technologies," said Matt Bahnemann, Senior Manager Program Management at Lockheed Martin. "Integrating Sentrycs' Cyber-over-RF capability expands the layered sensing and response options available to operators and further strengthens Sanctum's ability to address evolving unmanned aerial threats."
"Modern defense against unmanned aerial threats requires integrated, layered solutions that combine advanced detection, rapid decision-making, and precise mitigation capabilities," said Eric Brock, Chairman and CEO of Ondas Holdings Inc. "We are proud to collaborate with Lockheed Martin, a global leader in defense technology, to integrate Sentrycs' Cyber-over-RF capability into Sanctum. Combining Lockheed Martin's advanced modular defense architecture with Sentrycs' precise, non-disruptive detection and mitigation technology creates a stronger and more comprehensive operational capability for addressing evolving aerial threats."
The collaboration marks another step toward more integrated and interoperable Counter-UAS architectures, as defense organizations increasingly prioritize flexible, layered solutions capable of addressing rapidly evolving unmanned aerial threats.
About Ondas Inc.
Ondas Inc. (Nasdaq:ONDS) is a leading provider of autonomous systems, robotics, and mission-critical technologies for defense, homeland security, public safety, critical infrastructure, and industrial markets. The Company develops and deploys integrated unmanned and autonomous platforms across air, ground, and stratospheric environments, including autonomous drone systems, counter-UAS technologies, robotic ground systems, advanced unmanned aircraft and propulsion solutions, demining and engineering systems, and integrated sensing and communications technologies designed to support intelligence, surveillance, reconnaissance, security, and operational missions in complex environments. Ondas' solutions are deployed globally by government, defense, and commercial customers to protect infrastructure, borders, transportation networks, personnel, and strategic assets.
For additional information on Ondas Inc., visit www.ondas.com.
Forward-Looking Statements
Statements made in this release that are not statements of historical or current facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. We caution readers that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including the risks discussed under the heading "Risk Factors" discussed under the caption "Item 1A. Risk Factors" in Part I of our most recent Annual Report on Form 10-K or any updates discussed under the caption "Item 1A. Risk Factors" in Part II of our Quarterly Reports on Form 10-Q and in our other filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date, except as required by law.
Lockheed Martin (LMT - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this aerospace and defense company have returned -7.4%, compared to the Zacks S&P 500 composite's +0.1% change. During this period, the Zacks Aerospace - Defense industry, which Lockheed falls in, has gained 3%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Lockheed is expected to post earnings of $7.09 per share for the current quarter, representing a year-over-year change of -2.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The consensus earnings estimate of $29.88 for the current fiscal year indicates a year-over-year change of +29.2%. This estimate has remained unchanged over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $32.2 indicates a change of +7.8% from what Lockheed is expected to report a year ago. Over the past month, the estimate has remained unchanged.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Lockheed.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Lockheed, the consensus sales estimate of $19.41 billion for the current quarter points to a year-over-year change of +6.9%. The $79.05 billion and $82.47 billion estimates for the current and next fiscal years indicate changes of +5.3% and +4.3%, respectively.
Last Reported Results and Surprise HistoryLockheed reported revenues of $18.02 billion in the last reported quarter, representing a year-over-year change of +0.3%. EPS of $6.44 for the same period compares with $7.28 a year ago.
Compared to the Zacks Consensus Estimate of $18.12 billion, the reported revenues represent a surprise of -0.57%. The EPS surprise was -3.45%.
Over the last four quarters, Lockheed surpassed consensus EPS estimates three times. The company topped consensus revenue estimates two times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Lockheed is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Lockheed. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Key Takeaways Airbus signed a contract with Armenia for up to six H145 helicopters.EADSY's H145 features Safran engines, Helionix avionics and a high-performance autopilot system.More than 1,800 H145 helicopters are in service worldwide with over 8.5 million flight hours. Airbus SE (EADSY - Free Report) recently announced that it has signed a contract with the Republic of Armenia for the delivery of up to six H145 helicopters.
The agreement marks Armenia’s first-ever contract with Airbus Helicopters and reflects the country’s efforts to modernize its rotorcraft fleet with one of the most versatile and dependable platforms in its class.
EADSY Continues to Lead in Military Helicopter MarketMore than 140 armed forces worldwide rely on Airbus for its expertise in providing high-quality, multi-role military helicopters. These helicopters are designed to support a wide range of missions, including armed reconnaissance, utility, attack, naval, maritime and special operations.
Airbus Helicopters not only supports current military requirements but also helps shape future needs through the company’s next-generation, innovative helicopter solutions. EADSY’s military helicopter portfolio features a diverse lineup of platforms, including the H125M, H160M, H175M, H215M, H225M, Tiger, NH90 and H145M.
EADSY’s H145 is widely recognized for its strong performance, especially in high-altitude and hot-weather conditions, making it well-suited for Armenia’s varied and mountainous terrain. The five-bladed variant of the H145 offers greater payload capacity, enhanced flight comfort and a more streamlined maintenance process.
More than 1,800 helicopters from the H145 family are currently in service worldwide, collectively accumulating more than 8.5 million flight hours. Powered by two Safran Arriel 2E engines, the H145 features full-authority digital engine control and the Helionix digital avionics suite. It is also equipped with a high-performance four-axis autopilot that enhances safety while reducing pilot workload. The H145 has the lowest acoustic footprint in its class and generates lower CO2 emissions than competing helicopters.
Opportunities for Other Defense CompaniesOther defense companies that are well-positioned to benefit from growth opportunities in the military helicopter market are discussed below:
Textron Inc. (TXT - Free Report) : The company’s Bell segment provides advanced military helicopters, and offers parts and support services to the U.S. government as well as international military clients. Its combat helicopter portfolio includes the Bell 412M, Bell 429M and Bell 407M.
TXT boasts a long-term (three to five years) earnings growth rate of 10.14%. The Zacks Consensus Estimate for 2026 sales stands at $15.56 billion, which indicates a jump of 5.2%.
Lockheed Martin Corp. (LMT - Free Report) : Its Sikorsky business unit provides military helicopters and rotary-wing aircraft to all five branches of the U.S. armed forces, as well as defense and commercial customers across more than 40 countries. Lockheed Martin’s notable rotorcraft offerings include the Armed BLACK HAWK, CH-53K, MH-60R SEAHAWK, HH-60W and S-70 BLACK HAWK.
LMT has a long-term earnings growth rate of 18.48%. The Zacks Consensus Estimate for 2026 sales stands at $79.05 billion, which suggests a rise of 5.3%.
The Boeing Company (BA - Free Report) : The company’s helicopters are recognized for providing advanced, mission-ready capabilities that support a wide range of operational requirements. Boeing’s product portfolio includes combat helicopters and rotorcraft like the H-47 Chinook, AH-64 Apache, AH-6 Little Bird and MH-139 Grey Wolf.
The Zacks Consensus Estimate for BA’s 2026 sales stands at $96.7 billion, which indicates a jump of 8.1%. The Zacks Consensus Estimate for 2026 earnings per share is pegged at a loss of 15 cents, which suggests year-over-year growth of 98.6%.
EADSY Stock Price MovementOver the past three months, Airbus shares have risen 13.4% compared with the industry’s growth of 10.5%.
It's often said that financial markets are efficient. However, Mr. Market doesn't bat 1.000, and he's not always just.
Take the case of Lockheed Martin (LMT +2.04%). The defense stock slipped 4% last Thursday and another 3.4% on Monday, with no company-specific news to explain the declines. The most likely culprit is news from last week that the U.S. and Iran are hammering out the details of an interim peace deal. It makes sense that the de-escalation of military tensions in the Middle East would drag on this stock and its defense peers.
Government spending supports a long-term case for Lockheed Martin shares. Image source: Getty Images.
Investors can likely tolerate a defense stock retreating on news of a peace deal. As it relates to Lockheed, the frustrating thing is that the stock has been in a bear market since the war started. The shares are off 23.8% since Feb. 28, while the S&P 500 is up 7.6% over the same period. That weakness may be masking an opportunity.
Patience is required with Lockheed stock Lockheed's bear market status isn't entirely attributable to the war in Iran. The company's first-quarter results spooked some market participants. Zero revenue growth and negative free cash flow will do that. Investors are right to be apprehensive about any company with disappointing earnings and negative free cash flow, but there's more at play with Lockheed.
The defense behemoth sits on a $194 billion backlog, which is equivalent to 2.6 times 2025 sales. Even market participants who want to quibble, saying that large backlogs aren't unusual for government contracts of significant scale, must acknowledge that the level of clarity Lockheed is presenting is enviable and hard for most industrial stocks to match.
Importantly, 27% of that backlog is attributable to F-35 sustainment. That's pertinent to investors because the next-generation fighter jet program is additive to Lockheed's margins. Over the life of the F-35 program, which is expected to span more than 60 years, the total cost is estimated at $2.1 trillion. Obviously, there's investing for the long term, but that doesn't always encompass six-decade holding periods. The point is that the F-35 program could pay long-term, predictable dividends for patient Lockheed investors.
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Fighter jets are only part of the Lockheed story. The White House is seeking a staggering $1.5 trillion in fiscal 2027 defense spending, with roughly half of that sum devoted to procurement and the modernization of weapons systems. Some of that spending will go to artificial intelligence (AI) and drones, segments in which Lockheed Martin is established.
Not a space stock, but... As investors know, space stocks are all the rage these days. Lockheed isn't a pure-play space name. Still, the segment drove $12.5 billion in sales in 2024, and the company has exposure to both deep and human-led space exploration as well as space national security. In fact, it was recently awarded a $514 million contract from the U.S. Space Force.
There's some bumpiness in Lockheed's quarter-to-quarter space profits. Still, the company has a sizable backlog in this segment, which could help allay near-term concerns about profit fluctuations.
Plus, Uncle Sam is making clear he wants the U.S. to be the undisputed champion in space defense and warfare systems. Hopefully, those systems will never be used, but there's big money in preparedness, indicating space could be a long-term catalyst for Lockheed stock.
Headline-driven capital flight out of defense equities routinely engineers textbook fundamental mispricings.
When the framework for a Middle East peace agreement hit the newswires recently, algorithm-driven selling accelerated the rotation, triggering a sharp flight from defense and crude oil. The logic appears sound to a passive observer. Fewer active regional conflicts must equal reduced defense spending.
That surface-level assumption completely ignores the mechanical realities of the defense industrial base. The broader market selloff hit legacy contractors indiscriminately, dragging Lockheed Martin NYSE: LMT shares down toward below the $529 mark.
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Lockheed Martin Corporation (LMT) Price Chart for Wednesday, June, 24, 2026
Wall Street exacerbated this slide by hyper-focusing on the first-quarter earnings report, in which Lockheed Martin reported earnings per share of $6.44, below consensus estimates of $6.79.
Markets incorrectly conflated this temporary margin compression with long-term demand destruction. The current valuation of Lockheed Martin reflects what may be an overreaction to geopolitical headlines, masking a structural backlog that is less directly tied to near-term peace developments than the stock’s move may imply.
Refueling Mid-Air: A $2.8 Billion Sustainment WinLockheed Martin Today
LMT
Lockheed Martin
$504.11 +10.51 (+2.13%)
As of 06/23/2026 03:58 PM Eastern
52-Week Range$410.11▼
$692.00Dividend Yield2.74%
P/E Ratio24.41
Price Target$620.68
Military spending operates on decades-long modernization cycles, not daily news cycles.
The United States military is executing a massive, structural upgrade of its air fleet regardless of temporary geopolitical truces. Right in the middle of the sector-wide drawdown, the Department of Defense awarded Lockheed Martin two contracts totaling $2.8 billion.
The primary agreement is a $2.29 billion cost-plus-incentive-fee contract for F-35 Lightning II sustainment. In the defense sector, procurement is only the first step in the revenue cycle. Sustainment covers site activation, fleet management, and ongoing reliability improvements. The Department of Defense operates on a recurring revenue model with major contractors. Selling the initial aircraft provides a baseline margin, but decades of required maintenance, software upgrades, and parts replacements drive true long-term profitability for Lockheed Martin.
This sustainment revenue is supported by a severe readiness deficit within the United States military. A recent Government Accountability Office report revealed that F-35 full mission capability rates dropped to a concerning 25%. To arrest this decline, the Pentagon submitted a funding request for an additional $13.7 billion through 2031 to address spare part shortages and maintenance backlogs. Aircraft readiness functions completely independently of active combat deployments.
The Department of Defense also awarded the Sikorsky Aircraft subsidiary of Lockheed Martin a secondary firm-fixed-price contract worth $525 million for the development and modernization of the CH-53K heavy-lift helicopter program. These logistical upgrades highlight exactly how structural spending acts as a financial moat against sector volatility.
Cruising Altitude: Lockheed Martin's $194 Billion BacklogUnderstanding the severe disconnect between Lockheed Martin's current share price and its intrinsic value requires a close look at its underlying valuation metrics. Lockheed Martin trades at a forward price-to-earnings (P/E) ratio of nearly 18. The forward P/E ratio measures a company's current share price relative to its projected per-share earnings. Trading at an 18 multiple is highly attractive for a business generating $75.05 billion in annual sales and with a near-monopoly in fifth-generation fighter production.
A price-to-earnings-to-growth ratio of 0.98 signals that shares are priced at parity with projected growth rates. Finding a blue-chip industrial trading at a discount to its growth curve remains a rare anomaly in the current macroeconomic environment.
More importantly, Lockheed Martin has a $186 billion total backlog, which acts as a massive financial shock absorber. A backlog is a list of orders that have been received but not yet fulfilled. When Lockheed Martin's backlog exceeds its entire market capitalization of nearly $124 billion, the downside risk profile narrows significantly.
Current options chain dynamics support this technical floor, indicating a sharp contraction in implied volatility for near-term out-of-the-money puts. Institutional hedging reflects rigid support near the $525 to $530 range, effectively neutralizing downside risk for Lockheed Martin.
Safe Landings: Yield Support in a Turbulent MarketCapital rotating into Lockheed Martin during this drawdown receives immediate, tangible yield. Lockheed Martin approved a second-quarter dividend of $3.45 per share, payable on June 26, rewarding patient capital while the broader market digests the geopolitical headlines.
Current Price$504.11High Forecast$735.00Average Forecast$620.68Low Forecast$460.00Lockheed Martin Stock Forecast Details
Institutional desks clearly see the value proposition and are aggressively accumulating shares of Lockheed Martin.
Korea Investment Corp increased its position in Lockheed Martin by 17.1% during the fourth quarter. Top-tier analysts diverge sharply from the broader market's cautious sentiment.
Although the broader analyst consensus remains Hold, with an average price target of about $620.68, Susquehanna maintains a massive $700 price target, and Morgan Stanley holds firm at $653.
These targets imply healthy upside and reflect deep institutional confidence in Lockheed Martin's underlying business fundamentals.
Short sellers hold an anemic 1.15% of the free float, confirming the total absence of genuine downward institutional pressure against Lockheed Martin.
The industrial base is actually expanding capacity to meet structural demand, even as the stock market sells the defense sector on peace news. General Motors NYSE: GM is currently in talks to manufacture commonly used weapons parts for Lockheed Martin, aiming to clear persistent munitions bottlenecks driven by recent global inventory depletion.
Final Approach: A Defense Modernization PlayThe market fundamentally misprices legacy defense contractors by tying them solely to active regional conflicts. Predictable sustainment programs and structural modernization upgrades constitute a durable financial moat for Lockheed Martin. The recent $2.8 billion in targeted contract awards proves that baseline military infrastructure spending remains incredibly robust.
Investors watching the headline-driven capital flight might consider evaluating how Lockheed Martin's high-visibility Department of Defense cash flow and attractive forward multiple position it for resilient, long-term outperformance.
Should You Invest $1,000 in Lockheed Martin Right Now?Before you consider Lockheed Martin, you'll want to hear this.
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NEW YORK--(BUSINESS WIRE)--The Estée Lauder Companies Inc. (NYSE: EL) and Jo Malone London today announced the launch of Scent Scanner, a first-of-its-kind experience available exclusively on Pinterest and rolling out in the US and France. The experience translates the visual preferences people have expressed across their Pinterest boards into personalized Jo Malone London fragrance recommendations.
Building on the success of Jo Malone London's AI Scent Advisor, introduced in 2025, Scent Scanner offers a new way for consumers to find their personalized scent, shifting the starting point from words to images. While the AI Scent Advisor invited consumers to describe the scent they were seeking, Scent Scanner reads visual inspiration – imagery, color palettes, textures, destinations, rituals and aesthetics – to suggest fragrances suited to each individual.
The custom Pinterest experience brings Jo Malone London’s expertise in fragrance discovery to life through a personalized digital journey. With their permission, Pinners can connect a Pinterest board from their profile and the Scent Scanner analyzes the visual cues and themes in their saved content to build a curated fragrance pairing – a personalized set of Jo Malone London scents.
On Pinterest, personal taste is already expressed visually through the images people save and curate. Scent Scanner transforms those visual expressions into fragrance recommendations, creating a new bridge between inspiration and purchase.
“For years, personalization in beauty meant asking people what they wanted. The bigger opportunity is to understand what they already love — and to meet them where their taste already lives,” said Aude Gandon, Chief Digital and Marketing Officer, The Estée Lauder Companies. “Scent Scanner demonstrates how we can combine the power of creativity and commerce to make fragrance discovery more relevant and engaging. By partnering with Pinterest, Jo Malone London is bringing Beauty Reimagined to life, by creating a new model for emotionally driven commerce and meaningful consumer connection.”
“People come to Pinterest to picture the life they want, and they tell us who they are in images long before they have the words for it,” said Julie Towns, VP, Product Marketing & Operations, Pinterest. “Scent Scanner reads that visual language and turns it into fragrance discovery that feels less like searching and more like being known. It's a natural next step for a platform people use to dream, discover, and do.”
“A fragrance is one of the most personal choices an individual makes — it becomes part of how they move through the world and how they're remembered,” said Jo Dancey, Global Brand President, Jo Malone London and Lifestyle Fragrance, The Estée Lauder Companies. “With Scent Scanner, we can build someone a fragrance pairing drawn from what already inspires them, so the Jo Malone London scents they discover feel chosen for them — and unmistakably their own.”
The launch reflects the continued collaboration between The Estée Lauder Companies and Pinterest to build digital commerce experiences that connect consumers with fragrance in new ways. Through personalized visual discovery and innovative shopping capabilities, the partnership aims to engage high-intent fragrance shoppers and create more seamless pathways from inspiration to purchase.
The companies will further showcase their collaboration at Cannes Lions International Festival of Creativity 2026, where leaders from Pinterest, The Estée Lauder Companies and Jo Malone London will discuss the evolving role of AI, personalization and visual discovery in consumer experiences.
About The Estée Lauder Companies
The Estée Lauder Companies Inc. is one of the world’s leading manufacturers, marketers, and sellers of quality skin care, makeup, fragrance, and hair care products, and is a steward of luxury and prestige brands globally. The Company’s products are sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, La Mer, Bobbi Brown Cosmetics, Aveda, Jo Malone London, Bumble and bumble, Darphin Paris, TOM FORD, Smashbox, AERIN Beauty, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN PARIS, Too Faced, Dr.Jart+, the DECIEM family of brands, including The Ordinary and NIOD, and BALMAIN Beauty.
About Jo Malone London
Since 1994, Jo Malone London has been synonymous with elegant and distinctive scents, carefully crafted with a modern sensibility. Created to be worn alone or layered together, the fragrances invite a personalised approach to scent and individual self-expression. Acquired by The Estée Lauder Companies Inc. in 1999, today Jo Malone London is loved globally for its joyfully British character, defined by elegance, charm and creativity.
The EstÃe Lauder Companies Inc. (NYSE: EL) and Jo Malone London today announced the launch of Scent Scanner, a first-of-its-kind experience available exclusiv
Key Takeaways Caterpillar benefits from AI data center power demand and plans to double related output.Visa sees growth from payment volumes, cross-border activity and AI-driven fraud services. Starbucks, Coca-Cola and Estee Lauder advance growth via turnarounds, innovation and digital reach. The wide moat strategy involves investing in companies that not only lead their industries but are also strategically fortified to maintain dominance in the future. The business models of these companies possess durable competitive advantages that shield them from competitors. This strategy isn't just about recording short-term gains, but securing a portfolio of stocks that can weather economic storms and deliver stable and predictable returns.
This investment strategy focuses on companies with unique strengths such as brand recognition, patent protection, proprietary technology and network effects. These moats ensure long-term profitability and market leadership, making the companies resilient in volatile markets.
Here we recommend five non-tech Wide Moat stocks with a favorable Zacks Rank. These stocks are: Caterpillar Inc. (CAT - Free Report) , Visa Inc. (V - Free Report) , Starbucks Corp. (SBUX - Free Report) , The Coca-Cola Co. (KO - Free Report) and The Estée Lauder Companies Inc. (EL - Free Report) . Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
Image Source: Zacks Investment Research
Caterpillar Inc.Zacks Rank #1 Caterpillar is gaining from rising AI data-center-related power demand. As big technology companies establish data centers globally to support their generative AI applications, CAT is witnessing robust order levels for reciprocating engines for data centers. The company is planning to double its output with a multi-year capital investment.
CAT has also revised its target of growing Power Generation sales to more than 3.0X from the earlier stated 2.0X target by 2030. CAT announced another agreement to provide PROPWR up to 2.1 gigawatts of large gas generator sets for prime power generation in support of data center, oil and gas and industrial applications.
Caterpillar has an expected revenue and earnings growth rate of 13.2% and 29.2%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 7.8% in the last 60 days.
Visa Inc.Zacks Rank #2 Visa’s scale and brand strength keep it at the center of global digital payments, with growth still driven by higher payment volumes, cross-border activity, and increasing transaction counts.
V’s fiscal second-quarter results showed broad momentum across consumer payments, commercial and money movement solutions, and value-added services. Management guides to low-teens revenue growth for fiscal 2026.
Investments in agentic commerce and stablecoin settlement, alongside targeted acquisitions and disciplined capital returns, should continue to extend its network value over time. With fraud cases on the rise and AI adoption increasing, V’s services are in high demand. Visa has embedded AI and generative AI into over 100 products, primarily for fraud prevention and cybersecurity.
Visa has an expected revenue and earnings growth rate of 13.4% and 14.1%, respectively, for the current year (ending September 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 2% over the last 60 days.
Starbucks Corp.Zacks Rank #1 Starbucks is benefiting from steady International segment momentum, operational execution and meaningful progress under its “Back to Starbucks” turnaround plan. SBUX’s growth in international markets, along with innovations in delivery and digital channels, added to the positives.
In second-quarter fiscal 2026, SBUX’s International revenues rose 9.9%, while comparable sales increased 2.6% on 2.1% transaction growth. The company emphasizes operational efficiency, coffeehouse portfolio optimization and menu innovation to drive growth. SBUX’s focus on digital loyalty, new product platforms and partnerships bodes well.
Starbucks has an expected revenue and earnings growth rate of 2.9% and 12.7%, respectively, for the current year (ending September 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 4.3% over the last 60 days.
The Coca-Cola Co.Zacks Rank #2 Coca-Cola is benefiting from the strength of its portfolio breadth, consistent share gains and improving margins driven by pricing and productivity efforts. Innovation, marketing and digital initiatives are enhancing consumer engagement and execution, while diversified categories reduce risk.
KO projects steady organic revenue and EPS growth, backed by a durable global distribution moat. Our model predicts KO’s organic revenue growth of 4.8% and comparable EPS to grow 8.8% for 2026. KO’s robust cash generation supports reinvestments and sustainable shareholder returns, including continued dividend growth.
Coca-Cola has an expected revenue and earnings growth rate of 3% and 8.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last 60 days.
The Estée Lauder Companies Inc.Zacks Rank #2 Estée Lauder continues to gain traction as its Profit Recovery and Growth Plan supports margin recovery, operational efficiencies and stronger sales visibility. The Beauty Reimagined strategy, digital expansion and portfolio investments are helping EL improve innovation, consumer reach and online engagement, while emerging markets and improving trends in Mainland China provide long-term growth support.
Online sales growth, stronger social commerce momentum and broader distribution across Sephora, Amazon Premium Beauty and TikTok Shop continue to strengthen the company’s omnichannel position, positioning EL for a more sustainable long-term recovery and growth trajectory.
The Estée Lauder Companies has an expected revenue and earnings growth rate of 3.7% and 31.9%, respectively, for the next year (ending June 2027). The Zacks Consensus Estimate for next year’s earnings has improved 3.9% over the last 60 days.
June 23, 2026 09:55 ET | Source: Real Estate Split Corp.
TORONTO, June 23, 2026 (GLOBE NEWSWIRE) -- Real Estate Split Corp. (TSX: RS and RS.PR.A) is pleased to announce that a distribution for June 2026 will be payable to Class A shareholders as follows:
Record DatePayable DateDistribution Per Equity ShareJune 30, 2026July 15, 2026$0.13
The Fund also announces the second quarter distribution of 2026 will be payable to preferred shareholders as follows:
Record DatePayable DateDistribution Per Preferred ShareJune 30, 2026July 15, 2026$0.145
The equity and preferred shares both trade on the Toronto Stock Exchange under the respective symbols RS and RS.PR.A.
For further information, please visit our website at www.middlefield.com or contact our Sales and Marketing Department at 1.888.890.1868.
This press release contains forward-looking information. The forward-looking information contained in this press release is based on historical information concerning distributions and dividends paid on the securities of issuers historically included in the portfolio of the Fund. Actual future results, including the amount of distributions paid by the Fund, may differ from the monthly distribution amount. Specifically, the income from which distributions are paid may vary significantly due to: changes in portfolio composition; changes in distributions and dividends paid by issuers of securities included in the Fund’s portfolio from time to time; there being no assurance that those issuers will pay distributions or dividends on their securities; the declaration of distributions and dividends by issuers of securities included in the portfolio will generally depend upon various factors, including the financial condition of each issuer and general economic and stock market conditions; the level of borrowing by the Fund; and the uncertainty of realizing capital gains. The risks, uncertainties and other factors that could influence actual results are described under “Risk Factors” in the Fund’s prospectus and other documents filed by the Fund with the Canadian securities regulatory authorities. The forward-looking information contained in this press release constitutes the Fund’s current estimate, as of the date of this press release, with respect to the matters covered hereby. Investors and others should not assume that any forward-looking statement contained in this press release represents the Fund's estimate as of any date other than the date of this press release.
In 2018, only one company trading on a U.S. stock exchange sported a market cap of over $1 trillion -- Apple (AAPL 0.73%). The iPhone maker's lofty level was a precarious one, though. Its share price tumbled in late 2018 and struggled for months.
Apple eventually regained a $1 trillion market cap, of course. Others reached the milestone as well over the next few years. Today, 13 stocks are members of the elite $1 trillion club. But there's one that I think is the best pick to buy right now.
Image source: Getty Images.
Who are the baker's dozen with 10-digit valuations in 2026? Meet the $1 trillion club:
Saudia Arabian oil giant Saudi Aramco would also make the list if we expanded our criteria to include stocks that don't trade on U.S. stock exchanges. So would South Korea's Samsung and SK Hynix. But these 13 stocks are the members of the $1 trillion club as defined.
Several great picks A company don't achieve a market cap of over $1 trillion without being highly successful. Unsurprisingly, several of the 13 stocks are great picks.
Nvidia remains the 800-pound gorilla in the artificial intelligence (AI) chip market. Broadcom and Taiwan Semi are also major players in this market that should continue to benefit from a massive AI tailwind.
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All three biggest cloud service providers are members of the club. Alphabet's Google Cloud unit, Microsoft's Azure platform, and Amazon Web Services (AWS) should continue to deliver robust growth.
Meta and Micron profit from AI in different ways. Meta's social media apps rake in billions of dollars in advertising revenue, thanks in large part to advanced AI algorithms that display content that keeps users coming back. Micron is a top supplier of memory chips, critical components in AI data centers.
Apple's iPhone-centric ecosystem makes it a perennial favorite for investors. I predict that the company will have significant growth potential with its forthcoming AI-powered smart glasses.
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If you're looking for defensive recession-proof stocks, Berkshire Hathaway and Eli Lilly stand out. Berkshire is probably the best-positioned of the group to weather an economic downturn, thanks to its diversification and fortress-like balance sheet. The demand for Lilly's cancer and weight-loss drugs shouldn't be impacted much, if at all, if the economy struggles.
I'm least enamored with the two Elon Musk companies on the list. SpaceX's valuation doesn't seem justifiable to me, though I'm not predicting the stock will plunge anytime soon. Tesla could have excellent opportunities in the robotaxi and humanoid robot markets, but I'd prefer to see the company gain momentum in both before investing.
The best of the bunch Which of these members of the $1 trillion club is the best to buy right now? My vote goes to Alphabet. The stock has multiple growth drivers.
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The company's Google Cloud strength is exceptional, with its backlog nearly doubling sequentially to over $460 billion in the first quarter of 2026. Google Search advertising revenue continues to grow robustly, with AI helping rather than hurting Alphabet's core business.
I think that Alphabet will be able to further monetize its impressive Gemini AI models. Waymo reigns as the leader in autonomous ride-hailing and is poised to become a significant moneymaker for the company over the next few years. Google Quantum AI holds the potential to be a game changer for Alphabet in the not-too-distant future.
Last, but certainly not least, Alphabet's stock looks reasonably valued relative to its growth prospects. Shares trade at 26 times forward earnings.
Keith Speights has positions in Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Eli Lilly, Meta Platforms, Micron Technology, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool has a disclosure policy.
Nvidia (NVDA 3.99%), the world's largest producer of data center GPUs, has been one of the biggest beneficiaries of the AI boom. The world's top AI companies use its GPUs to train their large language models (LLMs), and it locks in its customers with its proprietary software.
From fiscal 2022 to fiscal 2026 (which ended this January), Nvidia's revenue and EPS grew at CAGRs of 68% and 89%, respectively. That's why its stock surged more than 1,000% over the past five years. It's still a great long-term AI play, but another tech giant might generate even more impressive gains over the next few years as the AI market enters a new phase.
Image source: Getty Images.
What new phase is the AI market entering? Over the past few years, many AI companies have focused on training their algorithms by feeding them massive amounts of data. These training sessions, which can run for weeks to months, use large clusters of Nvidia's GPUs in data centers.
But today, inference -- or the act of using software to access that trained data -- is becoming the next big growth phase of the AI market. As hyperscalers try to reduce the high costs of running their AI models around the clock, they're shifting away from Nvidia's general-purpose GPUs toward specialized application-specific integrated circuits (ASICs).
Instead of being jacks-of-all-trades, ASICs are customized for specific tasks. At scale, these specialized chips can be more cost-efficient than Nvidia's GPUs for handling inference tasks. Therefore, Broadcom (AVGO 3.06%) -- which controls about 70% of the ASIC market -- will likely experience a major growth spurt as more AI companies ramp up their investments in inference-driven technologies.
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Why could Broadcom be an even bigger winner than Nvidia? Broadcom already produces custom ASICs for Alphabet's Google, Meta Platforms, OpenAI, and Anthropic. In fiscal 2025 (which ended last November), its AI chip sales soared 65% to $20 billion, accounting for 31% of its top line. It expects that figure to rise to $100 billion in fiscal 2027.
From fiscal 2025 to fiscal 2027, analysts expect Broadcom's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to both grow at CAGRs of about 53%. Its soaring AI chip sales should offset slower sales of non-AI chips (including wireless, mobile, data center, storage, and industrial markets) and infrastructure software (which it increased its exposure to over the past decade via several major acquisitions).
Broadcom already has an enterprise value of $1.98 trillion, but it trades at just 16 times next year's adjusted EBITDA. That low valuation will attract more investors seeking the next big AI stock -- and Broadcom could be a better play on the inference market than Nvidia.
Leo Sun has positions in Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Broadcom, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
In the artificial intelligence (AI) world, Nvidia has a dominant market position. Its GPUs are best in class and have powered countless AI workloads, and will continue to do so for some time. However, GPUs have incredible capabilities that aren't always utilized when deployed in settings where workloads are repetitive and predictable. That's why some AI hyperscalers are turning to custom AI chips to minimize their run costs.
None of the AI companies can do this on their own, which is why they partner with companies like Marvell Technology (MRVL 9.42%) and Broadcom (AVGO 3.06%). These two companies help their clients design custom AI chips, known as application-specific integrated circuits (ASICs), alongside networking equipment to connect everything together.
That's a booming business, but which of these two stocks is the better buy? Let's find out.
Image source: Getty Images.
AI is a new business unit for each company Both Marvell and Broadcom have other products beyond their AI-focused businesses that get investors excited.
Broadcom offers a wide range of products, including mainframe hardware and software, virtual desktop software, and cybersecurity solutions. Marvell is a bit more focused on the chip side of the industry, and also makes networking chips for mobile devices, controller chips for solid-state drives, and a host of other products.
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However, AI is the big focus for both businesses (and for investors). There is a huge market opportunity available, and each is looking to seize it.
The biggest takeaway from their custom AI chip businesses is the customers. Marvell's primary ASIC customers are Amazon and Microsoft, which use Marvell to help design their Trainium and Maia chips, respectively. Broadcom's client base includes Alphabet, Meta Platforms, OpenAI, and Anthropic. Those are some of the biggest names in AI, but which is the biggest boost?
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I'd have to give this segment to Broadcom, because of all of the custom AI chips out there, the most successful is Alphabet's Tensor Processing Unit (TPU). Time will tell whether other offerings from Amazon and Microsoft can catch up to the success Alphabet has had with a TPU, but until it does, I think Broadcom gets the nod here.
Winner: Broadcom
Broadcom is growing faster From a growth standpoint, Broadcom also has the edge.
Data by YCharts.
It's not by much, but Broadcom is barely beating Marvell. But what about the future? For the fiscal year 2026, ending in October 2026, Wall Street expects Broadcom to deliver 66% revenue growth. For fiscal year 2027, that figure is similar, at 62%. For Marvell, whose fiscal year 2027 ends in January 2027, analysts expect 41% growth in fiscal year 2027, followed by 45% growth in fiscal year 2028.
That's a pretty clear-cut win for Broadcom, as Wall Street is far more bullish on its future.
Winner: Broadcom
The stock valuation is the final factor Despite Broadcom holding a lead, if its valuation is too high, then Marvell can easily be the better buy. Although Marvell's outlook isn't as strong as Broadcom's, it's still good enough to warrant considering it as an investment. However, the market has gotten far too bullish on Marvell's stock, mainly due to Nvidia's recent endorsement.
Data by YCharts.
Broadcom trades at 34 times forward earnings, which is lower than Marvell's valuation when fiscal 2028 earnings estimates are used. That's just far too high a price to pay for a stock when Broadcom has a stronger client base, a better flagship custom AI chip, and strong revenue growth projections.
Broadcom is the runaway winner here, and I think it should easily outperform Marvell over the next five years.
Winner: Broadcom
Keithen Drury has positions in Alphabet, Amazon, Broadcom, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, Marvell Technology, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
Clearing The Supply Chain NoiseThe Wall Street heavyweight pushed back strongly against recent negative reports stemming from sell-side analysts and Asian supply chain sources suggesting that the joint Broadcom-Google next-generation artificial intelligence program was in jeopardy.
In the research note with a title ‘Ignore The Noise’, analysts Harlan Sur and Mayur Ramdhani stated that “contrary to the recent noise… that Broadcom/Google has delayed or canceled its next-gen Google TPU v9 2nm program, we believe, based on our own recent primary research work and past reports… that the team remains on track.”
The analysts emphasized that the highly anticipated chip program is proceeding with “NO delays; NO cancellations,” reinforcing Broadcom’s stellar execution track record.
According to JPMorgan, Broadcom maintains a commanding “18mos+ lead” over Google’s internal custom chip-design team, which continues to struggle with optimizing its current hardware architecture.
Long-Term Revenue Secured Through 2031The foundational pillar of JPMorgan’s bullish outlook is a definitive long-term contract signed earlier this year, which shields the semiconductor giant from market volatility.
The firm highlighted that the “five-year agreement between Google and Broadcom in March… locks in Broadcom’s TPU design win roadmap for the next four generations of TPU (v8, v9, v10, v11).”
Crucially for long-term shareholders, the bank emphasized that this pact “includes commitments for increasing TPU revenues on an annual basis through 2031,” ensuring a highly predictable and expanding pipeline of high-margin AI revenue.
Unshakable AI Market DominanceReiterating its “Overweight” rating on the stock with a December 2026 price target of $580.00, implying a 40.99% upside from current levels, JPMorgan concluded that the broader market fundamentally underestimates Broadcom’s competitive moat.
Having led the ASIC market for over 30 years, the firm remains a critical backbone for global tech giants. Given the locked-in revenue stream and temporary stock weakness, the analysts emphasized that they “would be aggressive buyers at current levels.”
How Has AVGO Performed In 2026?Shares of AVGO have advanced by 18.85% year-to-date. It closed 4.70% higher at $411.35 apiece on Thursday, and fell 1.47% in premarket on Monday.
Over the last month, AVGO stock was down 2.22%, and it rose 24.70% over the last six months; the stock was 63.71% higher over the year. Benzinga’s Edge Stock Rankings indicate that AVGO maintains a strong price trend in the short, long, and medium terms, with a solid quality score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: Ken Wolter on Shutterstock
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Broadcom (AVGO) investors worried about reports of delays in Google chip programs may be overreacting, according to an analyst note from J.P. Morgan. Analyst Ha
Broadcom Inc. (AVGO - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this chipmaker have returned -0.7%, compared to the Zacks S&P 500 composite's +2% change. During this period, the Zacks Electronics - Semiconductors industry, which Broadcom Inc. falls in, has gained 22.1%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Broadcom Inc. is expected to post earnings of $3.22 per share, indicating a change of +90.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +3.3% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $11.73 points to a change of +72% from the prior year. Over the last 30 days, this estimate has changed +3.4%.
For the next fiscal year, the consensus earnings estimate of $19.15 indicates a change of +63.3% from what Broadcom Inc. is expected to report a year ago. Over the past month, the estimate has changed +7.4%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Broadcom Inc..
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Broadcom Inc., the consensus sales estimate for the current quarter of $29.46 billion indicates a year-over-year change of +84.7%. For the current and next fiscal years, $104.05 billion and $166.78 billion estimates indicate +62.9% and +60.3% changes, respectively.
Last Reported Results and Surprise HistoryBroadcom Inc. reported revenues of $22.19 billion in the last reported quarter, representing a year-over-year change of +47.9%. EPS of $2.44 for the same period compares with $1.58 a year ago.
Compared to the Zacks Consensus Estimate of $22.04 billion, the reported revenues represent a surprise of +0.68%. The EPS surprise was +1.67%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Broadcom Inc. is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Broadcom Inc.. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Broadcom (AVGO 3.06%) was one of the hottest stocks of 2026 before it reported Q2 earnings. It was up nearly 40% before selling off sharply. However, the stock is still up 18% for the year, which is still quite impressive for a six-month return.
One of the primary reasons for Broadcom's sell-off was that it didn't significantly raise its 2027 guidance. That's just an absurd reaction for the market, and it has created a great buying opportunity.
Image source: The Motley Fool.
Broadcom's custom AI chip business is gaining momentum Broadcom does a lot of different things as a company, but what's most exciting for investors is its ASICs -- application-specific integrated circuits. These are chips that are designed with one purpose in mind and excel at it. ASICs have been used for a long time, and they're gaining momentum in the AI industry. Broadcom partners with an AI hyperscaler to design an ASIC, and then those companies buy them exclusively from Broadcom. These custom AI chips often outperform GPU-based training in terms of cost, making them even more popular than ever.
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Broadcom has four key clients: Alphabet, Meta Platforms, OpenAI, and Anthropic. These four clients will help boost its AI semiconductor revenue to more than $100 billion by 2027. That's a massive goal, as Broadcom's current trailing-12-month revenue is $75 billion, and most of that is from non-AI sources.
Broadcom is starting a massive, multi-year growth trajectory, yet the market is disappointed that it wasn't more. That's a silly reason to sell a stock, and long-term investors should take advantage of the sell-off and begin loading up on shares.
From a valuation perspective, Broadcom does look expensive at 35 times forward earnings. However, 2027 was the year of major growth, and based on 2027's earnings estimate, we get a 21x multiple.
AVGO PE Ratio (Forward) data by YCharts
That's still not cheap, but if Broadcom's custom AI chip business really starts to take market share from GPUs, it could lead to even further growth in 2028 and beyond as the AI build-out is expected to last through at least 2030, and maybe beyond. That leaves plenty of years for Broadcom's business to continue growing, and I think it makes for a great long-term investment, especially after the recent sell-off.
Keithen Drury has positions in Alphabet, Broadcom, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Broadcom, and Meta Platforms. The Motley Fool has a disclosure policy.
Apollo Global Management President Jim Zelter joins CNBC's 'Squawk on the Street' to discuss the firm's role in leading a $35 billion financing for Broadcom's AI platform to support Anthropic's compute expansion, demand for compute, the state of the credit markets, and more.
Key Takeaways AVGO AI semiconductor revenues surged 143% to $10.8B, driven by XPUs and networking demand.Semiconductor revenues climbed 79% to a record $15B, while bookings exceeded $30B.Broadcom expects AI semiconductor revenues to reach $16B in Q3, up more than 200% year over year. Broadcom (AVGO - Free Report) is seeing strong momentum from rising demand for AI-focused semiconductor solutions. In the second quarter of fiscal 2026, AI semiconductor revenues jumped 143% year over year to $10.8 billion, surpassing management’s expectations. Growth was driven by strong demand for custom AI accelerators (XPUs) and networking products used in large-scale computing environments.
Semiconductor Solutions revenues climbed 79% year over year to a record $15 billion and represented 68% of total revenues. Overall revenues increased 48% to $22.18 billion. Demand remained strong throughout the quarter, with semiconductor bookings exceeding $30 billion, well above shipments. Networking products contributed nearly 40% of revenues from Broadcom’s AI-related semiconductor business, reflecting continued investment in high-performance infrastructure.
Broadcom is also benefiting from long-term partnerships with major technology companies, including Google, Anthropic, OpenAI and Meta. These agreements cover multiple generations of custom processors and networking solutions and include deployment plans extending through 2028. The partnerships have already generated billions of dollars in purchase commitments, providing greater visibility into future growth.
The company continues to strengthen its networking leadership through technologies such as high-speed Ethernet switching, SerDes, co-packaged optics and fabric solutions, including its Tomahawk and Jericho platforms. Broadcom is also preparing to launch a next-generation 200-terabit Ethernet switch to support increasingly complex computing workloads.
Broadcom expects AI semiconductor revenues to rise to approximately $16 billion in the third quarter of fiscal 2026, representing growth of more than 200% year over year. The company expects AI semiconductor revenues to double in the second half of 2026 compared with the first half, with full-year AI semiconductor revenues projected at $56 billion, an increase of approximately 180% from fiscal 2025. Broadcom anticipates this momentum will continue, guiding for AI semiconductor revenues to exceed $100 billion in 2027.
AVGO Faces Tough Competition in the Semiconductor SpaceBroadcom is facing stiff competition from the likes of Advanced Micro Devices (AMD - Free Report) and NVIDIA (NVDA - Free Report) . Both Advanced Micro Devices and NVIDIA are expanding their footprint in the semiconductor space.
Advanced Micro Devices is benefiting from strong demand for EPYC processors and Instinct GPUs. In the first quarter of 2026, Data Center revenues rose 57% year over year to a record $5.8 billion, driven by cloud and enterprise adoption, expanding AI workloads and growing large-scale GPU deployments.
NVIDIA is also seeing robust AI-driven demand. In first-quarter fiscal 2027, Data Center revenues jumped 92% year over year and 21% sequentially to a record $75 billion. Growth was fueled by strong adoption of Blackwell systems and networking products, with computing revenues reaching $60 billion and networking revenues climbing to $15 billion.
AVGO’s Share Price Performance, Valuation & EstimatesBroadcom shares have increased 18.9% year to date, underperforming the broader Zacks Computer and Technology sector’s rise of 20%.
AVGO Stock Underperforms Sector
Image Source: Zacks Investment Research
The AVGO stock is trading at a premium, with a forward 12-month price/sales of 13.57X compared with the broader sector’s 6.77X. Broadcom has a Value Score of D.
AVGO Stock Has a Stretched Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the third quarter of fiscal 2026 earnings is pegged at $3.22 per share, up 2.9% over the past 30 days, suggesting 90.5% growth from the figure reported in the year-ago quarter.
Broadcom currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Broadcom (NASDAQ:AVGO | AVGO Price Prediction) posted record revenue of $22.19 billion on June 3, 2026, beat consensus on the top and bottom line, raised guidance, and lost roughly a fifth of its market value over the following week. The stock went from $495 at the filing to $385.73 one day later. The broader chip complex dropped alongside it. AVGO sits at $395 as of this writing, still down 4% while SPY is down 0.3% over the same window.
What JPMorgan is actually saying Late on last week, JPMorgan reiterated its Overweight rating with a $580 price target and told clients to be “aggressive buyers” of Broadcom at current levels.
The thesis rests on two arguments the bank thinks the market is mispricing. First, that Broadcom’s dominance in advanced packaging is being underestimated. Second, that the AI chip development program with Google is on track despite recent supply chain noise. Shares jumped over 4% on the call, and the most recent session added 4.7%.
The numbers that triggered the selloff are the same numbers supporting the bull case AI semiconductor revenue grew 143% year-over-year to $10.80 billion, beating Broadcom’s own guidance. CEO Hock Tan guided Q3 AI revenue to $16 billion, up over 200%, and disclosed that Q2 alone produced over $30 billion in AI bookings. For full-year 2026 the company expects $56 billion in AI semiconductor revenue, up approximately 180% from fiscal 2025, prior target of more than $100 billion in 2027.
Tan described the demand environment as “demand for XPUs and networking is simply insatiable.” and named the customers funding it. Anthropic gets access to more than 1 gigawatt of TPU-based compute in 2026 and another 5 gigawatts starting in 2027. OpenAI is contractually committed to deploy 1.3 gigawatts in 2027, on the way to a previously announced 10-gigawatt agreement by 2029. Meta committed to 3 gigawatts of MTIA XPUs through 2028. Two unnamed core customers have already placed $6 billion in purchase orders.
So why did the stock collapse? Three reasons explain it. Valuation, customer concentration, and a Nasdaq-wide chip rout. AVGO trades at 65 times trailing earnings and 33 times forward earnings, with a market capitalization of $1.87 trillion. The six-customer concentration is real, and Tan acknowledged that within Google specifically, “we fully expect that there will be some diversity of sources for them.”
On June 16, the Philadelphia Semiconductor ETF fell 5.9% on FOMC day, with Intel down 8.4% and AMD down 7.3%. AVGO went with them. The supporting filing detail is in the company’s Q2 FY2026 8-K.
The contrarian read on retail panic Reddit’s r/wallstreetbets briefly turned into a confessional. One post titled “wealthsimple exercised AVGO puts after hours. i’m down 1.2 million. is it over” drew 5,229 upvotes. Within 48 hours, a counter-narrative emerged on r/stocks: “Broadcom’s drop looks way overdone to me” picked up 204 upvotes and 130 comments.
Polymarket’s resolved record on AVGO earnings predictions is 100% correct across 6 markets, though the same crowd assigns essentially zero probability to AVGO becoming the second or third largest company by June 30.
What to weigh against the JPMorgan call Wall Street consensus sits at $522.06 with 37 buy ratings and 7 strong buys against 4 holds and zero sells. Insiders have been net sellers across 35 recent transactions. CFO Kirsten Spears flagged a structural margin headwind, noting that “our ASICs, TPUs, and some of the wireless business have lower margins” and that consolidated gross margin will compress as AI scales. Q3 gross margin is guided down to roughly 74%.
The JPMorgan trade bets the market mistook a mix-shift margin story and a sector tantrum for something fundamentally broken. Backlog visibility now extends into 2028, and gigawatt demand from Anthropic and OpenAI is, in Tan’s words, “far ahead of what we expected six months ago.” If that holds, $411 looks like a gift. If hyperscaler capex blinks, the multiple has a long way to fall.
Comparing Schwab U.S. Dividend Equity ETF (SCHD +0.50%) to Vanguard Dividend Appreciation ETF (VIG 0.51%) reveals two distinct strategies: one prioritizes current high yields while the other focuses on consistent dividend growth and technology exposure.
Investors often weigh these two funds when seeking exposure to reliable American companies. Vanguard Dividend Appreciation ETF targets large-capitalization companies with decade-long streaks of dividend increases, whereas Schwab U.S. Dividend Equity ETF focuses on fundamental strength and sustainability, resulting in two very different ways to own the dividend-paying market. Understanding whether you value immediate yield or long-term growth is central to choosing between these two exchange-traded funds.
Snapshot (cost & size)MetricVIGSCHDIssuerVanguardSchwabExpense ratio0.04%0.06%1-yr return (as of June 18, 2026)20.00%24.20%Dividend yield1.50%3.20%Beta0.820.68AUM$127.8 billion$99.9 billionBeta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
While the Vanguard fund is the more affordable option with its 0.04% expense ratio, the Schwab fund remains competitive at 0.06%. The 1.70 percentage point yield gap may attract those prioritizing cash flow, whereas VIG focuses on those who prefer the growth of that payout over time. The Schwab fund provides a lower beta of 0.68, suggesting it has historically been less volatile than the broader market compared to the Vanguard fund's beta of 0.82.
Performance & risk comparisonMetricVIGSCHDMax drawdown (5 yr)(20.40%)(16.80%)Growth of $1,000 over 5 years (total return)$1,715$1,543What's insideSchwab U.S. Dividend Equity ETF focuses on 103 holdings, tracking the Dow Jones U.S. Dividend 100 Index. Its largest positions include Texas Instrument Inc (TXN 8.40%) at 6.39%, Qualcomm Inc (QCOM 8.01%) at 6.22%, and Unitedhealth Group Inc (UNH +0.63%) at 5.50%. The fund, which was launched in 2011, paid $1.06 per share over the trailing 12 months. It prioritizes technology at 19.00%, with consumer defensive and healthcare each representing 18.00% of the portfolio, using fundamental screening to identify companies with high cash flow and return on equity.
In contrast, Vanguard Dividend Appreciation ETF maintains a broader portfolio of 338 holdings, tracking the S&P U.S. Dividend Growers Index. Its largest positions include Broadcom Inc (AVGO 3.06%) at 5.42%, Apple Inc (AAPL 0.73%) at 4.58%, and Microsoft Corp (MSFT +1.96%) at 4.28%. The fund was launched in 2006 and has paid $3.45 per share over the trailing 12 months. It is heavily tilted toward technology at 29.00%, followed by financial services at 20.00% and healthcare at 17.00%, excluding the highest-yielding stocks to capture companies with the strongest capacity to increase dividends.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investorsThese are two very different dividend ETFs. One, the Schwab U.S. Dividend Equity ETF, is more focused on the dividend yield, with a 3.25% distribution yield, one of the highest among dividend ETFs. The Vanguard Dividend Appreciation ETF only pays a yield that is less than half of SCHD’s at 1.53%.
SCHD has also been a better performer this year, up some 16% year-to-date compared to VIG, which has returned about 7%.
But VIG has been the much better long-term performer. As it focuses on dividend growers, it includes a lot of technology stocks that have rising dividends, but with lower yields. As the top three holdings — Broadcom, Microsoft, and Apple — indicate, these are not exactly dividend stocks. But they are three of the best growth stocks on the market.
This has allowed the VIG ETF to post strong long-term returns. However, the outperformance over SCHD is not that great — 11% for VIG to 8.7% for SCHD over the past five years and 13% for VIG to 12% for SCHD over the past 10 years.
Ultimately, if you are looking for excellent dividends and a good portfolio diversifier, SCHD is the better option.
Dave Kovaleski has positions in Apple. The Motley Fool has positions in and recommends Apple, Broadcom, Microsoft, Qualcomm, Texas Instruments, and Vanguard Dividend Appreciation ETF. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
Broadcom (AVGO 3.06%) shares recently sold off after the company reported a sharp acceleration in revenue growth. The stock has started to recover, but is still down 17% from its previous high at the time of writing.
Investors might have been looking for stronger revenue guidance for the rest of the year, but it's still puzzling that the stock fell this sharply. Management guided for another massive jump in AI chip revenue next quarter and provided a positive outlook for its AI semiconductor business over the next few years. Here's why this looks like a great setup for a buying opportunity.
Image source: Getty Images.
AI chip revenue is expected to grow 200% next quarter The AI data center build-out cycle remains robust. The Motley Fool's research found that four of the "Magnificent Seven" (Alphabet, Microsoft, Amazon, and Meta Platforms) were expected to increase capital spending by at least 45% in 2026. Broadcom is riding the wave, with revenue up 48% year over year last quarter, reaching $22 billion. Revenue for its AI chips, or XPUs, grew 143% to $10.8 billion.
CEO Hock Tan said, "Demand for XPUs and networking is simply insatiable." Fiscal third-quarter guidance calls for AI chip revenue to accelerate again next quarter, growing over 200% year over year to reach $16 billion.
In light of this momentum, the stock's dip seems to be nothing more than a healthy pullback before another leg higher. The forward price-to-earnings multiple is 30, which is not cheap but reasonable for a company that just posted earnings growth of 54%, with analysts projecting 45% annual earnings growth over the next few years.
Management expects growth through at least fiscal 2028 Some leading AI tech stocks are trading at low earnings multiples relative to their earnings growth. This is the market's way of discounting the possibility of a slowdown in data center spending, which is the main risk for Broadcom. But the valuation discount is an opportunity for long-term investors.
Broadcom has deals with every leading AI company, including Google, Anthropic, and OpenAI. It just signed a long-term agreement to supply multiple generations of TPUs and AI networking to Google. It has similar deals in place with the other companies.
Obviously, anything that slows down data center spending, such as regulations on new construction, would likely send Broadcom stock lower. But the opportunity is that people are not using AI less. They will only use it more as these models improve. ChatGPT users have doubled over the last year and are now approaching 1 billion weekly users. That will just put more strain on existing compute capacity, which is already short, requiring continued investment to keep up with demand.
Broadcom stock has already risen almost 400% over the past three years, but with this much opportunity ahead, the stock's bull run doesn't appear to be over yet. Tan reiterated the expectation that AI chip revenue alone will exceed $100 billion by fiscal 2027, with continued growth into fiscal 2028. The recent demand trends, new agreements with Google and others, and long-term outlook make the recent dip a buying opportunity.
John Ballard has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.
I keep clicking buy on Broadcom (NASDAQ:AVGO | AVGO Price Prediction) because the math is too good to walk away from, even with a $39 trillion national debt clock ticking and new Fed Chairman Kevin Warsh signaling that borrowing costs are not coming back down on anyone’s preferred schedule. My friends ask why I am adding to the same name in the middle of a macro panic. The answer fits on a napkin: I am buying a cash machine the rest of the market is treating like a cyclical chip stock.
The thesis is simple. The global buildout of enterprise AI cannot happen without Broadcom’s custom silicon and switching fabric. CEO Hock Tan said it plainly on the June call: “Broadcom achieved record revenue, operating profit and free cash flow in Q2 driven by accelerating growth in AI semiconductor revenue and strong operating leverage.” That is the income statement talking.
The Receipts Start with the most recent quarter. Q2 FY2026 revenue landed at $22.187 billion, up 47.9% year over year, with non-GAAP EPS of $2.44, the eighth consecutive EPS beat. AI semiconductor revenue alone hit $10.80 billion, up 143%. Operating margin came in around 49%, with free cash flow of $10.262 billion, or 46% of revenue. Adjusted EBITDA margin was 69% of revenue. Tan guides Q3 to ~$29.4 billion in revenue and $16.0 billion of AI revenue, more than 200% YoY growth. His stated long-term target is to exceed $100 billion in AI sales by 2027.
Second, the balance sheet absorbs macro shocks. Cash and equivalents sit at $19.628 billion, up 107.22%, with total liabilities down 3.76% year over year and shareholders’ equity up 26.02%. Capex in Q2 was only $231 million. That is what asset-light cash conversion looks like.
Third, the income story I actually care about. Broadcom just raised its dividend 10% to $0.65 quarterly, the 15th consecutive annual increase since fiscal 2011, while running a $10 billion buyback authorization through December 31, 2026. Full year FY2025 free cash flow was $26.914 billion. Retirement accounts get paid out of cash flow like that.
The Risk I Will Not Pretend Away Hyperscaler concentration is real. A handful of customers drive the custom accelerator business, and the company itself flags dependence on a limited number of large customers and significant indebtedness requiring substantial cash flow for debt service. If one major hyperscaler pauses orders, near-term numbers wobble. I sit with that risk because the same call disclosed 79% YoY growth in Semiconductor Solutions and AI revenue still beating management’s own forecasts. A demand base big enough to deserve that concentration is a base I want exposure to.
Why The Buy Button Stays Active Forward P/E sits at 36, with a PEG of 0.748 and an analyst consensus target of $523.84 against a recent price of $411.35. 44 of 48 covering analysts rate it Buy or Strong Buy. Reddit can keep posting $1.2 million loss screenshots. The 10-year holder has watched the stock compound 3,266.87%. As long as Broadcom keeps converting AI demand into 46% free cash flow, I keep buying the macro fear other people are selling.
On June 3, Broadcom (AVGO 3.06%) announced its second-quarter fiscal year 2026 results for the period ending May 3. The company's shares fell off a cliff post-earnings, despite solid revenue and earnings growth, as well as guidance that looked impressive, especially for the company's artificial intelligence (AI) chip business. Broadcom expects semiconductor revenue from AI to grow by over 200% year over year in its Q3, accelerating significantly from the 143% sales growth it posted during Broadcom's second quarter.
Evidently, that wasn't enough to impress the market. But there remain excellent reasons to be bullish on Broadcom, including recent news from Amazon (AMZN +0.69%). Here's what investors should know.
Image source: The Motley Fool.
Amazon could soon be selling its AI chips According to reports, Amazon is in early talks to sell its Trainium AI chips to other companies. So far, the cloud computing leader has mostly used them in-house, within its own data centers. But the fact that it is actively exploring selling them to outside customers strongly suggests that the demand is there. And there is plenty more evidence for that claim. Alphabet (GOOG 0.77%) (GOOGL 0.85%) has already said it was planning to start selling its TPUs (Tensor Processing Units) to select outside customers.
One important takeaway here is that tech companies and other entities that need to train and deploy AI models increasingly see Application-Specific Integrated Circuits (ASICs) -- or specialized chips customized to perform specific tasks -- as legit alternatives to general-purpose GPUs (Graphics Processing Units), and that won't change anytime soon, especially as corporations seek to decrease their reliance on the GPU market leader, Nvidia (NVDA 3.99%).
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Why Broadcom investors should celebrate Amazon deciding to sell its AI chips is another bullish signal for the entire ASIC market, where Broadcom is a leader. The company's work in this field is powering strong financial results. In the second quarter of its fiscal year 2026, the company's net revenue increased 48% year over year to $22.2 billion, while its adjusted earnings per share rose 54% to $2.44. Broadcom also posted free cash flow of $10.3 billion, up 60% compared to the prior-year quarter.
Given the developments mentioned above, it seems likely that Broadcom will see sustained demand for its products through the foreseeable future. Importantly, the company has secured a deal with Alphabet to design its TPUs through 2031. Broadcom also has a partnership with Meta Platforms (META 0.13%) to help develop its Meta Training and Inference Accelerator AI chips; this deal will run through 2029. It's reasonable to think that Broadcom may sign similar agreements with other corporations in the future.
What does all of this mean for investors? Broadcom remains well-positioned to ride the wave of the AI chip industry, which should grow at a good clip over the next few years, at least, and the company may see outstanding returns along the way. Also, the recent post-earnings dip represents a buying opportunity, considering Broadcom still hasn't fully recovered. Interested investors should seriously consider purchasing the company's shares before it's too late.
Prosper Junior Bakiny has positions in Alphabet, Amazon, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
Few artificial intelligence (AI) semiconductor stocks have had a better run than Broadcom (AVGO 3.06%) during this current bull market. The stock has posted an average annualized return of 67% over the past three years, which stacks up favorably with Nvidia, Intel, Advanced Micro Devices, and other leading chipmakers.
Broadcom stock dropped about 15% in the first quarter due to its high valuation and concerns about margin compression heading into the year.
But since April, it spiked 55% to reach $481 per share on June 2, leading up to the second-quarter earnings release on June 3. But since then, the stock has plummeted 21% to $380 as of June 23.
Image source: Getty Images.
Shares fell despite a strong earnings report that saw sales surge 48% year over year to a record $22.2 billion. Its AI chip revenue jumped 143% to $10.8 billion, driven by demand for AI accelerators and AI computing. That AI revenue is anticipated to rise 200% in the fiscal third quarter to $16 billion.
It raises the question: Why has Broadcom's stock tanked since earnings were released?
Is Broadcom stock a buying opportunity? Often, when there's a sell-off like this for a high-performing company, investors are taking profits after a big run when the valuation has skyrocketed. Broadcom stock had risen 55% in two months leading up to the fiscal second-quarter earnings release, and its price-to-earnings ratio (P/E) had spiked to 81, up from 69 in late January.
There were also some concerns that its AI semiconductor revenue projections for the third quarter missed analysts' estimates. The 200% increase to $16 billion was apparently not enough, as analysts had expected $17 billion.
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In addition, Broadcom guided for slightly lower margins in the third quarter, with the gross margin targeted at 74%, down from 77% in the second quarter, as management said on the second-quarter earnings call. And the quarter's margin was also down year over year.
This is mainly due to a changing product mix, as lower-margin but faster-growing AI chips make up a larger portion of overall revenue. So Broadcom is bringing in tons more revenue, but at slightly lower margins, which will eventually find its level.
The broader concern is valuation: when a stock trades at such high multiples, compressed margins become a bigger issue and make it harder to justify them.
But in the long term, Broadcom stock has a low five-year price-to-earnings-to-growth ratio of 0.68, indicating it is a value stock based on its earnings expectations. And in the nearer term, its forward P/E during this sell-off has dropped to a more reasonable 32, from 37 a few months ago.
Ultimately, this sell-off creates a great opportunity to buy one of the leading AI stocks at a discount.
Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, Intel, and Nvidia. The Motley Fool has a disclosure policy.
Broadcom delivered solid Q2 FY26 results, but investors expected stronger revenue and earnings growth to justify its valuation. The company's diversification efforts have reduced the risk associated with Customer Owned Tooling. Broadcom formed an AI XPV financing platform in partnership with Apollo and Blackstone to finance Frontier Model companies' purchases of Broadcom's AI chips and networking equipment.
For good reason, investors have come to see Broadcom NASDAQ: AVGO as a clear leader in the artificial intelligence semiconductor market. The company’s AI semiconductor revenue jumped 143% year-over-year (YOY) in its latest quarter to $10.8 billion, or 49% of total sales. Notably, Broadcom is still far behind in AI chip sales versus NVIDIA NASDAQ: NVDA, whose data center revenue came in at an astonishing $75.2 billion.
Broadcom Today
$380.15 -11.98 (-3.06%)
As of 06/23/2026 04:00 PM Eastern
52-Week Range$258.77▼
$495.00Dividend Yield0.68%
P/E Ratio63.36
Price Target$493.24
Despite this, Broadcom remains well ahead of other AI chip companies like Advanced Micro Devices NASDAQ: AMD and Intel NASDAQ: INTC. Broadcom’s AI chip revenue was $5 billion higher than AMD’s Q1 2026 data center sales of $5.8 billion. Meanwhile, AI chip sales were more than double Intel’s Data Center and AI (DCAI) revenue of $5.1 billion. Broadcom expects a huge acceleration next quarter, guiding for AI semiconductor growth of over 200% YOY to $16 billion.
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However, a key part of Broadcom’s business sometimes gets overlooked, given the massive attention AI chips garner. That business is infrastructure software, anchored by VMware. For investors, this is a critical part of Broadcom’s business to understand, as AI is far from the only place Broadcom expects to drive growth.
Infrastructure Software: A Large Chunk of Broadcom’s BusinessBroadcom’s revenue breakdown shows why infrastructure software is a key part of its business and why investors need to stay aware of it. In its Q2 fiscal year 2026 (FY2026), infrastructure software generated $7.2 billion in revenue. This was equal to a very significant 32% of its $22.2 billion in total revenue. (Note that Broadcom’s fiscal reporting period is slightly ahead of the standard reporting period used by many companies.)
Nonetheless, all eyes are on AI chips, as this is where Broadcom is generating the vast majority of its growth. For perspective, infrastructure software revenues grew just 1% YOY two quarters ago and 9% YOY last quarter.
Thus, this segment's growth has fallen considerably compared to fiscal year 2025, when infrastructure software sales posted impressive growth of 26% YOY. This was largely due to the extensive price increases Broadcom implemented after buying VMware. Given this dynamic, there has been a narrative that Broadcom has exhausted price-increase-driven growth and that software sales growth may stagnate again. However, Broadcom’s latest commentary strongly pushed back on this idea.
Broadcom Forecasts Highest Software Growth in Over a YearIn Q3 FY2026, Broadcom expects a very significant reacceleration in software growth. The company projects sales of $8.9 billion, or an increase of 31% YOY. Notably, this would mark the company’s fastest software growth rate since the beginning of 2025.
Even more telling were CEO Hock Tan’s comments about software going forward. Tan said, “As you can see, in Q3, we're seeing an accelerated growth, and we expect that to continue, I guess, for the next multiple quarters as this demand picks up.” It is unclear whether this means Tan expects growth to accelerate beyond 31% in the future. However, at the very least, Tan is pointing to stronger growth than the recent single-digit figures.
Tan also provided a very confident answer to the one analyst question that was specifically about software. Citigroup analyst Atif Malik asked, “Are you guys seeing any impact of AI, agentic AI, on your software growth and renewals? And if you can just talk about some sort of long-term growth for that business.”
This question pokes at a fear that has shaken many software stocks: AI-driven disruption. Tan responded, “Well, we're not seeing it… We do not expect to see any impact on software products.” Here, Tan is clearly saying that he is not seeing a negative impact from AI on software sales and does not expect to going forward. Much of this rationale stems from VMware's tight integration with computing hardware. VMware directly helps manage the allocation of computing resources, making displacement difficult. Additionally, the proliferation of AI requires more computing resources. In turn, this should increase the importance of managing those resources, the exact service VMware provides.
Broadcom’s Software Segment: A Solid Supplement to Hyper-Growth AI ChipsBroadcom’s software business is not only large, but the company also expects it to grow strongly going forward. Meanwhile, there are solid reasons to believe that AI is positive for its software business, rather than a clear threat. To top it all off, this segment is extremely profitable. It generated a gross margin of 93% last quarter, and the operating margin rose 310 basis points YOY to 79%. Overall, Broadcom’s undeniably strong AI semiconductor business is far from the only reason to have confidence in this stock’s outlook.
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Broadcom (AVGO) remains a STRONG BUY, with a base case price target of $583 and a projected 53% upside from current levels. AVGO's AI revenue trajectory is secured by multi-year contracts, with FY27 AI revenues expected to exceed $100 billion and significant order book visibility through 2028. The company's near-monopoly in AI networking silicon and underappreciated networking business are key drivers, supporting durable growth beyond custom silicon.
U.S. Global Investors (NASDAQ:GROW) said falling oil prices are providing a boost to airline stocks, pointing to gains in Delta Air Lines and United Airlines as carriers benefit from steady travel demand and lower fuel costs.
The investment advisory firm, which specializes in gold mining stocks and the airline industry, said oil prices trading below their 50-day moving average has historically signaled easing inflationary pressure and improving cost structures, particularly in commercial aviation. That technical breach has coincided with renewed optimism around airline profitability.
"We have long believed in the resilience of global air travel and the opportunities created by commodity cycles," said Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors (NASDAQ:GROW). "When oil prices drop below the 50-day moving average, it serves as a clear positive signal for tactical investors and traders. We see genuine fundamental improvement ahead, not just short-term sentiment."
The company tracks these dynamics through its specialized funds and Smart Beta 2.0 quantitative investment strategy. Its U.S. Global Jets ETF (NYSE: JETS) provides investors exposure to the global airline industry, including airline operators, manufacturers, and online travel agencies.
Separately, U.S. Global Investors (NASDAQ:GROW)' Board of Directors approved continued payment of monthly dividends of $0.0075 per share for July, August and September 2026. Based on the company's closing share price of $2.91 on June 16, 2026, the dividend represents an annualized yield of approximately 3.1%.
BHP Group Ltd (LSE:BHP, ASX:BHP) shares saw their largest one-day drop in 14 months on Friday after the miner disclosed a US$2.3 billion write-down tied to its Jansen potash project in Saskatchewan, Canada, citing higher costs and schedule delays.
Shares of the Melbourne-based company fell 5.6% in Sydney trading to about $61 following the announcement, made late on Thursday.
BHP said the second phase of the Jansen mine development is now expected to cost US$6.9 billion, up from a previous estimate of US$4.9 billion, after completing a review of the project.
First production from the expansion is now expected toward the end of 2031.
The company said the impairment reflects increased capital requirements and revised cost forecasts for the project.
Analysts at Jefferies wrote that while another increase in Jansen spending had been anticipated because BHP had previously indicated the estimates were under review, the latest revision was larger than expected and "still unhelpful," particularly given what they described as a weak outlook for potash markets in the foreseeable future.
Jefferies noted that the latest adjustment marks the third upward revision to Jansen's development costs in less than a year and brings cumulative committed investment in the project to roughly US$19.8 billion. The firm wrote that execution risks remain because about 84% of Stage 2 construction work is still ahead.
The analysts estimated the revised spending guidance would reduce their net asset value estimate for BHP by 1.1% and reiterated a ‘Hold’ rating on the stock, writing that they see better value opportunities elsewhere in the mining sector.
Jansen is a key part of BHP's strategy to expand its exposure to potash, a crop nutrient used in fertilizer production. Stage 1 of the project remains on track for first production in mid-2027, according to Jefferies.
TOKYO, June 18, 2026 /PRNewswire/ -- Honda Motor Co., Ltd. (NYSE: HMC) has filed with the Securities and Exchange Commission its annual report on Form 20-F for the fiscal year ended March 31, 2026. Honda's annual report on Form 20-F can be accessed from following web site addresses;
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
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What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
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The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
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Stock to Watch: Honda Motor (HMC - Free Report) Honda Motor Co., Ltd. is a leading manufacturer of automobiles and the largest producer of motorcycles in the world. The company is recognized internationally for its wide variety of products, ranging from small general-purpose engines to specialty sports cars, which incorporate its efficient internal combustion engine technologies. Honda operates through four business segments:
HMC is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 28.34; value investors should take notice.
For fiscal 2027, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $1.22 to $0.93 per share. HMC boasts an average earnings surprise of +90.2%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, HMC should be on investors' short list.
QS stock is moving. See the chart and price action here. Last week, QuantumScape and Honda announced a joint research program focused on solid-state battery development and the associated manufacturing processes.
Honda executive Atsushi Ogawa highlighted "a range of applications, including automotive," which signals a broader vision for QuantumScape’s solid-state battery platform.
The phrasing suggests Honda doesn’t see this as a single-product bet, but as a technology it can slot across multiple business lines.
Other ApplicationsHonda already operates far outside four-wheel passenger vehicles. The company sells motorcycles, scooters, generators, industrial equipment, power tools, marine engines and energy solutions.
A solid-state battery platform with high energy density, fast charging and strong safety characteristics could become a differentiator across several of those categories.
Industrial settings care about uptime and reliability, so rugged solid-state packs could improve total cost of ownership for customers that run equipment hard and often.
Stationary storage is another obvious candidate inside Honda’s ecosystem. The company already plays in backup power and distributed energy, pairing engines, inverters and control systems.
Solid-state packs integrated into stationary systems could cut maintenance, improve safety in constrained indoor spaces, and deliver higher usable energy per footprint.
Small mobility and two-wheelers may offer some of the most attractive proving grounds. Honda dominates global motorcycle and scooter markets, especially in regions where charging infrastructure and grid stability remain challenges.
Electric scooters or motorcycles using solid-state packs could achieve better packaging, lower weight, and faster top-ups, even if absolute range remains moderate. These vehicles also operate at smaller pack sizes, which fits QuantumScape’s current stage where volumes are limited and cell costs remain high.
Looking AheadPositioning QuantumScape as a platform technology provider aligns well with Honda’s multi-domain strategy.
Rather than waiting for one big flagship electric car launch in the early 2030s, Honda could roll out QuantumScape-based packs in a series of higher-margin, lower-volume products first.
Early, smaller-volume deployments will allow Honda and QuantumScape to debug manufacturing processes, refine pack integration and generate safety data before committing to mass-market EVs.
Each successful niche program reduces perceived platform risk for QuantumScape, even if unit numbers stay modest at first.
For markets that trade on milestones and credibility as much as current revenue, early wins could carry outsized weight for QuantumScape.
QS Stock Price Activity: QuantumScape stock was down 0.62% at $7.99 at the time of publication Monday, according to Benzinga Pro.
Over the past month, QS has declined about 7% versus a 0.3% decline in the S&P 500 and is down roughly 26% year-to-date compared to the index’s 9% gain. The stock has a 52-week range of $4.16 to $19.06.
Photo courtesy of QuantumScape Corp.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Honda agrees to a deal with battery-tech company QuantumScape.
Honda Makes Surprise Bet on Solid-State Batteries With New Research Deal Why solid-state? Honda's wider electrification picture Honda R&D, the independent research and development arm of Honda Motor Company, has signed a multiyear joint research agreement with California-based battery technology company QuantumScape. The deal, announced Thursday, is focused on developing and manufacturing solid-state battery cells.
The agreement follows Honda's review of QuantumScape's technology, providing an important vote of confidence in the company's solid-state battery efforts.
Why solid-state?Solid-state batteries are often viewed as one of the most promising advances in next-generation energy storage. They could allow electric vehicles to travel farther, charge more quickly and operate more safely than those using today's lithium-ion batteries. The potential uses go beyond electric vehicles. The technology could also help power AI data centers, aircraft and defense systems.
Not every solid-state battery claim has gone unchallenged. Earlier this year, Finnish startup Donut Lab attracted attention after announcing what it described as the world's first production-ready solid-state battery. But battery researcher Ryan Inis Hughes, who publishes on YouTube as Ziroth, questioned that claim, arguing that the cell appears to rely on conventional lithium-ion chemistry rather than the sodium-ion solid-state design the company implied.
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QuantumScape kicked off pilot production of its 5-amp-hour QSE-5 solid-state cell earlier this year at its San Jose, California, headquarters.
Antuan Goodwin/CNETQuantumScape, by contrast, appears to have stronger validation for its technology. An existing deal licensing its technology to PowerCo SE, the battery company of the Volkswagen Group, gave the company its first major automotive alignment. Honda's more recent evaluation and research agreement reinforces the appearance that its technology is holding up under serious scrutiny.
"QS technology demonstrated compelling and unique advantages during our evaluation," Atsushi Ogawa, chief operating officer of Honda R&D, said in a statement accompanying the announcement. "We see potential for QS technology to add value across a range of applications, including automotive, and we are excited to move forward into the next phase of our partnership."
The deal is a meaningful step toward solid-state battery tech reaching consumer cars. Earlier this year, QuantumScape opened its Eagle Line pilot facility at its Silicon Valley headquarters. The facility will produce QSE-5 solid-state battery samples for partner evaluations and serve as a blueprint for large-scale manufacturing before customers such as Honda commit to licensing the technology.
Honda's wider electrification pictureThe agreement comes at an unexpected moment. Earlier this year, Honda pulled back on several high-profile North American EV initiatives, including the Zero Saloon and SUV concepts, the Acura RSX SUV, and its Afeela collaboration with Sony Honda Mobility.
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Earlier this year, Honda took a huge loss and ended development of the upcoming 0 EV concepts and Acura RSX due to insufficient demand.
HondaHonda has reduced its near-term EV ambitions, cutting EV and software investment and lowering its 2030 global battery-electric sales target to about 20%. The company is now prioritizing hybrids, with a new wave of models planned from 2027, rather than pursuing an all-electric and fuel-cell lineup by 2040.
A representative for Honda didn't immediately respond to a request for comment.
Antuan started out in the automotive industry the old-fashioned way, by turning wrenches in a driveway and picking up speeding tickets. He now has nearly 20 years of expertise and experience behind the wheel of hundreds of cars, including electric, hybrid, plug-in hybrid, hydrogen, and traditional combustion vehicles. For each car he tests, Antuan covers more than 200 miles behind the wheel and evaluates driving dynamics; acceleration and braking performance; range; and efficiency. Antuan's goal is to use his extensive car knowledge to educate CNET readers and help with their next car-related buying decision. Whether you're EV-curious, an EV-enthusiast or a combustion-car loyalist, Antuan will bring you the unbiased advice, reviews, best lists and news you need. You can reach Antuan at [email protected]
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Article updated on June 23, 2026 at 5:01 AM PDT
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Written by Antuan Goodwin
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Antuan Goodwin Senior Writer, Electrified Cars
Antuan started out in the automotive industry the old-fashioned way, by turning wrenches in a driveway and picking up speeding tickets. He now has nearly 20 years of expertise and experience behind the wheel of hundreds of cars, including electric, hybrid, plug-in hybrid, hydrogen, and traditional combustion vehicles. For each car he tests, Antuan covers more than 200 miles behind the wheel and evaluates driving dynamics; acceleration and braking performance; range; and efficiency. Antuan's goal is to use his extensive car knowledge to educate CNET readers and help with their next car-related buying decision. Whether you're EV-curious, an EV-enthusiast or a combustion-car loyalist, Antuan will bring you the unbiased advice, reviews, best lists and news you need. You can reach Antuan at [email protected]
Expertise Nearly two decades of testing, driving, reporting on, writing about, reviewing, and editing content about electric and ICE cars. Category focus is on electrified cars, EVs, HEVs, PHEVs, ICE cars, EV infrastructure, EV chargers, EV adapters, EV news, auton Credentials
North American Car, Truck and SUV of the Year (NACTOY) Awards Juror We thoroughly evaluate each company and product we review and ensure our stories meet our high editorial standards.
If you have a Roth IRA, you have an emergency fund hiding in plain sight. Every dollar you personally contributed, not the growth, just your contributions, can come out anytime, at any age, with zero tax and zero penalty. No hardship paperwork. No 10% early withdrawal hit. No waiting until 59½. The Roth IRA early withdrawal rule most savers never use is the one Congress wrote into the account from day one.
The Reveal A Roth IRA is funded with money you already paid tax on. Because the IRS already got its cut, the government treats your contributions as yours to reclaim whenever you want. Pull out $4,000 next Tuesday to fix a roof, cover a deductible, or float a gap between jobs, and as long as you stay within the total you’ve put in over the years, the withdrawal is tax-free and penalty-free. Earnings are a different story, but the principal is liquid.
The Proof The mechanic is the “ordering rules” in IRC Section 408A(d)(4) and laid out in plain English in IRS Publication 590-B. Withdrawals always come out in a fixed order: regular contributions first, then conversions, then earnings. That ordering is what makes contributions reachable at any age. As Clark Howard has repeated for years on his show, “with a Roth IRA, you’re allowed to withdraw your contributions at any time. Your earnings have to stay in the plan, but your actual contributions, that’s money that you can draw in as needed.” Suze Orman puts it the same way: “You can withdraw your original contributions without tax or penalties whatsoever. It is simply the earnings that your contributions earn have to stay in there until at least 59 and a half years of age and the account has got to have been open for at least five years.”
Who Qualifies, Who Doesn’t Anyone with a Roth IRA qualifies for contribution withdrawals, regardless of age, income, or how long the account has been open. There is no five-year wait on contributions themselves. The five-year clock applies to earnings and to converted dollars. Roth 401(k) money is different: it follows pro-rata rules inside an employer plan, so you cannot cherry-pick just the contributions until you roll it to a Roth IRA. Conversions (money moved from a traditional IRA) carry their own five-year clock per conversion before they can come out penalty-free under age 59½.
How To Use It In 2026 Confirm your contribution basis. Add up every dollar you’ve personally contributed to the Roth across all years. Your custodian (Fidelity, Charles Schwab (NYSE:SCHW | SCHW Price Prediction), Vanguard) tracks this on Form 5498 filings. Max the account first. The 2026 IRA contribution limit is $7,500, with a catch-up of $1,100 if you’re 50 or older. Request a distribution of contributions only. Tell the custodian the amount; they code it as a return of basis on Form 1099-R. Report it on Form 8606 with your tax return so the IRS sees the ordering rule applied. Stop at your basis. The next dollar out is earnings, and that one is taxable and likely penalized. The Catch Three traps. First, once contributions are out, you can’t “repay” them. You can only put new money back up to that year’s $7,500 limit. Pull $30,000 of contributions, and rebuilding that base takes years. Second, the opportunity cost is brutal. With the Fed Funds rate sitting at 3.75% and the FDIC national average 12-month CD yielding just 1.65%, the tax-free compounding inside a Roth is the most valuable seat in the house. Third, touch the earnings layer before age 59½ and the five-year rule, and you owe ordinary income tax plus a 10% penalty on that slice. Track your basis carefully, and the Roth becomes the rare retirement account that doubles as an emergency reserve.
Charles Schwab (SCHW) is rated Buy with a 12-month price target of $107.80, reflecting robust growth and multiple revenue drivers. SCHW has moved past the cash-sorting cycle, posting record Q1 results: 16% revenue growth, 38% EPS growth, and a 51.4% pre-tax margin. Asset gathering remains exceptional, with $49.9B net new assets in May and total client assets reaching $13.1T, supporting accelerating fee income.
Charles Schwab Corporation partnered with Cboe Global Markets to introduce binary options tied to the performance of the S&P 500, marking its entry into the rapidly growing prediction markets segment.
According to a report by The Wall Street Journal, the brokerage is working with Cboe to roll out all-or-nothing options contracts that allow customers to make yes-or-no wagers on whether the S&P 500 closes above or below a specified level.
The contracts will pay a fixed cash settlement if the prediction is correct and nothing if it is not.
Although structured as options rather than futures contracts, the products function similarly to prediction markets offered by platforms such as Robinhood and Interactive Brokers.
Schwab plans to make the contracts available to customers in the coming months.
Schwab is also introducing an options product that incorporates a Cboe feature known as "the plus zone."
The feature allows traders to receive a partial payout even if their predictions are not entirely accurate and the index closes near, but not exactly at, the anticipated level.
Cboe began discussing the return of binary options contracts months ago as interest in prediction markets accelerated.
Company executives have indicated that such products could appeal to investors who have experimented with prediction markets but have not yet moved into more sophisticated options strategies.
The companies have also discussed developing contracts linked to other indexes and financial benchmarks.
However, Schwab intends to focus exclusively on events with measurable outcomes in financial markets and is not expected to offer contracts tied to sports, entertainment or other non-financial events.
The expansion comes as prediction markets have grown rapidly in popularity over the past several years.
The products gained significant attention during the 2024 US presidential election and have since evolved into an asset class that allows traders to wager on outcomes ranging from monetary policy decisions and corporate earnings to major sporting events.
The move into prediction markets comes as Schwab simultaneously adds new safeguards around another rapidly growing area of its business.
The company recently informed advisers that it is implementing tighter margin requirements for clients using long-short investment strategies.
These strategies typically combine long and short positions and use margin loans and proceeds from short sales to finance investments.
Under the new requirements, individual accounts must maintain margin debits below 110% of short credits, while the aggregate limit across all accounts using long-short strategies is set at 100%.
If the requirements are not met, Schwab said it may impose restrictions.
"If the margin call is not resolved within the required time frame, 'we may restrict new account enrollments in the strategy, execute transactions in the account to satisfy the deficiency, or take additional action to manage the exposure,' Schwab said in the notice."
The brokerage emphasized its continued support for long-short strategies.
"The changes we have recently shared with our participating RIA clients are designed to ensure the program grows and meets demand sustainably," the firm said. "With Schwab’s scale, balance sheet, and expertise behind it, Long/Short SMA Strategies on Schwab’s platform are well positioned for the long term."
Schwab introduced leverage caps and account minimums on long-short separately managed accounts in April.
The company reported margin loan balances of nearly $127 billion at the end of the first quarter.
Shares of Charles Schwab have fallen about 9% so far this year as investors monitor both the company's expansion into new trading products and its efforts to manage risks across its growing platform.
The iShares 1-5 Year Investment Grade Corporate Bond ETF provides a higher dividend yield by investing in corporate debt rather than U.S. Treasuries. Schwab Short-Term U.S. Treasury ETF offers a lower expense ratio and has experienced a significantly smaller maximum drawdown over the last five years.
