Track market-moving stories before they get noisy

General Electric (GE +2.49%) spun off its energy division as GE Vernova (GEV +2.40%) two years ago. Since its market debut, GE Vernova's stock has surged nearly 750%. Let's see why its stock soared -- and why it's still worth buying today before a major catalyst kicks in.

GE Vernova is a great electrification play GE Vernova is one of the most balanced plays on the growing need for electricity. It operates three segments: Power (55% of its 2025 orders), Electrification (33%), and Wind (13%).

Image source: Getty Images.

The Power segment produces gas turbines for combined-cycle plants, steam turbines for coal, gas, and nuclear plants, and provides services for nuclear power plants. The Electrification segment sells transformers, breakers, substations, and high-voltage direct current systems. It also provides automation, optimization, and protection services for electrical grids. The Wind segment sells onshore and offshore wind turbines.

In 2025, its total orders grew 34% organically, up from its 7% growth in 2024. That acceleration was driven by its 51% and 23% growth in Power and Electrification orders, respectively, which offset the slower growth of its Wind segment. The rapid expansion of the power-hungry cloud, data center, and AI markets generated strong tailwinds for its two largest businesses.

Today's Change

(

2.40

%) $

24.88

Current Price

$

1059.86

What is the next big catalyst for GE Vernova? GE Vernova is a well-diversified play on fossil fuels, nuclear power, and green energy solutions. In the past, that demand was cyclical and driven by the macro environment.

But today, the "AI grid supercycle" is becoming its biggest single long-term catalyst. The insatiable demand for more power from hyperscalers like Amazon (AMZN +1.86%) and AI infrastructure providers like Crusoe boosted GE Vernova's backlog to $163 billion at the end of the first quarter of 2026. That's more than triple its projected revenue of $45.5 billion for 2026, and will likely swell even larger over the next few years as the AI market expands.

According to Fortune Business Insights, the global AI market could grow at a 26.6% CAGR from 2026 to 2034. Unlike its less diversified industry peers, GE Vernova can provide both green energy and fossil fuel solutions for that rapidly expanding market.

From 2025 to 2028, analysts expect GE Vernova's revenue and EPS to grow at CAGRs of 16% and 24%, respectively. At $1,110 per share, it isn't a screaming bargain at 36 times this year's earnings, but it also doesn't seem overvalued relative to its long-term growth potential.

Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, GE Aerospace, and GE Vernova. The Motley Fool has a disclosure policy.

Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.

Should You Consider GE Vernova?Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. GE Vernova (GEV - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $3.90 a share, just 30 days from its upcoming earnings release on July 22, 2026.

GEV has an Earnings ESP figure of +25.40%, which, as explained above, is calculated by taking the percentage difference between the $3.90 Most Accurate Estimate and the Zacks Consensus Estimate of $3.11. GE Vernova is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

GEV is just one of a large group of Oils and Energy stocks with a positive ESP figure. Shell (SHEL - Free Report) is another qualifying stock you may want to consider.

Slated to report earnings on July 30, 2026, Shell holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $2.61 a share 38 days from its next quarterly update.

For Shell, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.51 is +4.19%.

GEV and SHEL's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?

Let's take a look at what these Wall Street heavyweights have to say about GE Vernova (GEV - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

GE Vernova currently has an average brokerage recommendation (ABR) of 1.47, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 33 brokerage firms. An ABR of 1.47 approximates between Strong Buy and Buy.

Of the 33 recommendations that derive the current ABR, 24 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 72.7% and 6.1% of all recommendations.

Brokerage Recommendation Trends for GEV

Check price target & stock forecast for GE Vernova here>>>

While the ABR calls for buying GE Vernova, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.

Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.

Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.

Is GEV a Good Investment?Looking at the earnings estimate revisions for GE Vernova, the Zacks Consensus Estimate for the current year has increased 1.1% over the past month to $30.59.

Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for GE Vernova. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, the Buy-equivalent ABR for GE Vernova may serve as a useful guide for investors.

Shares in GE Vernova (GEV +2.40%) were down 7.4% at 2 pm today amid a broad-based sell-off in AI data center-related stocks, sparked by a sharp decline in Korea. As previously discussed, declines in stocks such as Samsung Electronics and SK Hynix followed remarks by the head of the country's financial regulator disparaging newly created leveraged funds that track the performance of the aforementioned companies.

Why it matters to GE Vernova The sell-off in South Korea may be due to fears that regulatory action will curb these funds, prompting forced sales of positions in leading semiconductor stocks. While these events are unrelated to what happens with the core demand for investment in AI-related investments (GE Vernova's power and electrification solutions are a key enabler of AI data centers), the sell-off reflects the kind of immediate profit taking that occurs when a sector has run up so strongly over the last year or so.

Today's Change

(

2.40

%) $

24.88

Current Price

$

1059.86

Moreover, this volatility is likely to persist, as the bulls argue that momentum in AI data center spending continues to lift earnings expectations. At the same time, the bears point to valuation concerns and the inevitability of a slowdown.

Where next for GE Vernova GE Vernova is a case in point, as the company continues to report strong backlog growth, with surging orders and slot reservation agreements (in which customers pay upfront to secure production slots in the future) extending into 2031.

The reality is that today's news isn't likely to fundamentally alter the investment case for GE Vernova, and don't be surprised if it bounces back soon enough.

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GE Vernova. The Motley Fool has a disclosure policy.

NuScale Power (SMR 4.56%) has a first-mover advantage as the only small modular reactor (SMR) company with a design approved by the U.S. Nuclear Regulatory Commission (NRC). Still, NuScale has a high cash burn rate and has not quite reached commercialization.

Given the stock's volatility, is it worth the risk for long-term investors? I'll dive in to find out.

Today's Change

(

-4.56

%) $

-0.49

Current Price

$

10.37

Still holding on to a first-mover advantage NuScale's advantage is NRC approval, which puts the company months, or perhaps years, ahead of competitors seeking the same milestone. This moat matters particularly at a time when utilities and data centers are desperately seeking reliable power sources.

NuScale's pipeline is also very impressive. It's working to deploy up to 6 gigawatts (GW) of SMR capacity with the Tennessee Valley Authority, alongside NuScale's commercialization partner, ENTRA1 Energy.

NuScale is also working on a Romanian initiative with RoPower Nuclear. The project's execution is phased, but if completed, it would be a huge win for NuScale investors. Both projects could generate substantial revenue for NuScale by the early 2030s.

Lastly, NuScale has about $900 million in cash reserves and short-term investments. This cash cushion provides the company with sufficient runway to continue advancing toward commercialization without the risk of further dilution or running out of money.

Image source: The Motley Fool.

No shortage of risks for NuScale investors There are still real risks associated with the company. While NuScale cobbled together revenue of $31.5 million in 2025, net losses ballooned to $355.8 million. This was a 160% jump from the year before. In the first quarter of 2026, revenue plunged to nearly nothing.

Wall Street analysts responded negatively, with some lowering price targets or downgrading the stock altogether. The more bullish analysts understand that real revenue likely won't come for at least another few years.

A class action lawsuit is also weighing on the SMR company. The lawsuit alleges NuScale executives misled investors regarding the capabilities of ENTRA1. Not only could this lawsuit cause real financial damage, but the reputational injury may be difficult to rebound from.

Competition could also theoretically catch up to NuScale. Companies such as Oklo (OKLO 5.09%) pose a real threat, especially if NuScale isn't able to successfully deliver on its pipeline projects. Just this week, Oklo announced a partnership with Standard Nuclear to enhance its nuclear supply chain and further align with federal electricity goals in the artificial intelligence (AI) age.

All this said, shares of NuScale are quite volatile. The stock's beta is over 2, meaning it is more than twice as volatile as the market. The stock is down over 26% since the start of the year and well off the 52-week high of $57 per share.

Investors should have a decade of patience ready The lawsuit is nerve-racking, but it doesn't negate the fact that NuScale has a design already approved and that its commercialization projects are still moving forward. The nuclear industry as a whole is also experiencing a global resurgence.

While this stock isn't appropriate for many investors, if you have a long-term horizon, are comfortable with considerable risk, and remain bullish on NuScale's innovative technology, there could be significant upside for investors who are willing to stick around for the next decade. In this bullish view, buying the stock at less than $15 per share is opportunistic.

The Space Exploration Technologies (SPCX +0.69%) IPO is now behind us. The space stock is now armed with more than $85 billion in fresh capital that it can deploy to fuel growth. Reports also suggest SpaceX could target a $20 billion bond sale this summer, further bolstering its capital firepower.

SpaceX won't find it difficult to spend its newfound riches. "It's no secret that SpaceX is a capital-intensive business," observes a recent research report from Morningstar. Whether it's building rockets and sending humans to the moon or constructing orbital data centers and launching them into low Earth orbit, SpaceX will be heavily reliant on its IPO proceeds -- as well as continued capital raises in the years to come -- to realize its growth ambitions.

While SpaceX is diversified, it is not completely vertically integrated. In fact, there's one constraint to SpaceX's growth that could derail the growth trajectory of the company's most valuable business in the long term: artificial intelligence. Thankfully, a nuclear energy stock most investors have never heard of could provide a solution.

This nuclear stock could help SpaceX realize its growth ambitions According to the SpaceX IPO prospectus, likely the biggest benefactor of the company's IPO cash will be its AI division. After all, AI alone accounts for more than 90% of the company's claimed total addressable market. If SpaceX can't fund growth in its AI division, its IPO valuation may not be justified.

A huge portion of SpaceX's AI spending will be dedicated to building data centers. The company wants to build several supercomputers that would be among the largest ever built. How to power these facilities, however, is another question.

Image source: Getty Images

So far, SpaceX's data centers have relied on a variety of fuels, from grid-connected utilities to off-grid solar power and Megapacks -- huge energy storage batteries designed and sold by Tesla (TSLA 0.13%). Orbital data centers harnessing solar power in space may eventually solve the energy challenge. But more terrestrial solutions will also be needed.

NuScale Power (SMR 4.56%) designs small modular reactors, which can -- at least in theory -- be faster, cheaper, and safer to construct than larger conventional nuclear power plants. The SMR industry hopes to get SMR energy systems online within two to three years from the start of construction. Larger nuclear systems, for comparison, often take a decade or more to bring online.

For now, SpaceX seems intent on pursuing orbital data centers. But given the challenges involved, as well as the critical importance of the company's terrestrial data center build-out for growth, I wouldn't be surprised to see the company pursue a more diversified approach to its energy needs over the coming years. If SpaceX does move toward nuclear energy to power its data centers, SMR technology would seem like the greatest fit on paper due to its speed of deployment.

With several approved SMR designs, initial modules already under construction, and a measly $4 billion market cap, it's possible we even see SpaceX acquire an SMR stock like NuScale at some point to accelerate its energy sourcing as quickly and broadly as possible.

A drone view shows the building of the Brazil's state-run oil company Petrobras, amid a workers strike, in Rio de Janeiro, Brazil December 19, 2025. REUTERS/Pilar Olivares/File Photo Purchase Licensing Rights, opens new tab

CompaniesRIO DE JANEIRO, June 18 (Reuters) - Brazil's state-run oil firm Petrobras (PETR3.SA), opens new tab plans to resume construction of a fertilizer plant in Mato Grosso ​do Sul state by September, in another move to reduce the ‌country's dependence on imports, executive William Franca said on Thursday.

Construction of the UFN-III fertilizer plant in Tres Lagoas, which will cost $1 billion to finish, has been on hold since 2015.

The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here.

The ​company aims to begin operations in 2029, Franca, Petrobras' director of industrial ​processes and products, told Reuters.

The nitrogen fertilizer plant will have production ⁠capacity of 3,600 metric tons per day of urea and 2,200 tons ​per day of ammonia.

The Tres Lagoas location is considered strategic due to its proximity ​to major agribusiness consumer hubs such as the states of Mato Grosso, Mato Grosso do Sul, Goias, Parana and Sao Paulo.

The resumption is part of a broader Petrobras strategy to reduce ​Brazil's dependence on imported fertilizers. The company has reactivated other nitrogen fertilizer units ​in Parana, Bahia and Sergipe.

"This plant alone should reduce urea imports by 12%. With the ‌other ⁠plants combined, that reduction could reach 35%," Franca said.

PRESSURE MAY EASE ON REFINERIESFollowing a U.S.-Iran interim agreement to end the war between the countries, pressure is likely to decrease on Petrobras' refining operations, which have run at high levels to minimize ​fuel imports.

The refineries ​are operating at ⁠around 101% of capacity, and are expected to remain at that level through June, Franca said. Petrobras increased processing during ​the war to cut the need for imports.

Under a more ​stable scenario, ⁠the company intends to resume scheduled maintenance shutdowns that had been postponed, Franca said, without providing details.

"It's not possible to stay above 100% all the time. We ⁠postponed some ​shutdowns because of the war, but we will ​mainly carry out some planned outages, especially in 2027, also due to regulatory requirements," he said.

Reporting ​by Rodrigo Viga Gaier; Writing by Fernando Cardoso; Editing by Mark Porter, Rod Nickel

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

The board of ​Brazilian state-run oil company ‌Petrobras has approved a $1.2 billion investment to develop a ​plant for renewable jet ​fuel, known as bioQAV, ⁠and renewable diesel, the ​company said in a securities ​filing on Friday.

Key Takeaways Petrobras approved a $1.2B bioQAV and renewable diesel project at the Presidente Bernardes Refinery.PBR plans construction this year, with commercial operations targeted for 2030 and 15,000 bpd capacity.Petrobras included the project in its 2026-2030 Strategic Plan and approved final contracting to proceed. Petrobras (PBR - Free Report) has taken a significant step toward advancing sustainable energy production by approving a $1.2 billion investment to develop a state-of-the-art facility dedicated to the production of renewable jet fuel (bioQAV) and renewable diesel, according to Reuters. The project represents one of the most important renewable fuel initiatives in Latin America and reinforces Petrobras' commitment to balancing traditional energy operations with emerging low-carbon solutions.

The newly approved investment aligns with Petrobras' long-term strategic vision and positions it at the forefront of the growing global demand for cleaner transportation fuels. As governments, airlines and industries seek to reduce carbon emissions, renewable aviation and diesel fuels are becoming increasingly critical components of the worldwide energy transition.

New BioQAV and Renewable Diesel Plant Planned for Sao Paulo StateThe renewable fuel facility will be constructed at Petrobras' Presidente Bernardes Refinery in the state of São Paulo, one of the company's most important refining complexes. The location offers strategic advantages, including existing infrastructure, logistical connectivity and access to major domestic and international fuel markets.

According to company plans, construction is expected to begin during the current year, while commercial operations are scheduled to commence in 2030. Once operational, the plant will have the capacity to produce up to 15,000 barrels per day of renewable fuels, making it a major contributor to Brazil's sustainable fuel production capacity.

The project was already incorporated into Petrobras' 2026-2030 Strategic Plan, demonstrating that renewable energy investments remain a central component of its growth strategy.

Growing Demand for Renewable Jet Fuel Drives InvestmentThe aviation industry is under increasing pressure to reduce greenhouse gas emissions. Renewable jet fuel, commonly referred to as Sustainable Aviation Fuel (“SAF”) or bioQAV in Brazil, has emerged as one of the most promising solutions for decarbonizing air transportation.

Unlike conventional jet fuel derived solely from fossil sources, renewable jet fuel can significantly lower lifecycle carbon emissions while remaining compatible with existing aircraft engines and airport infrastructure. This compatibility allows airlines to reduce environmental impact without requiring major fleet modifications.

By investing heavily in bioQAV production, Petrobras is positioning itself to capitalize on rising global demand. International aviation organizations, regulators and airlines are establishing ambitious targets for SAF adoption, creating substantial long-term market opportunities for producers capable of delivering large-scale supply.

Renewable Diesel Expands Petrobras' Sustainable Fuel PortfolioIn addition to renewable aviation fuel, the new facility will produce substantial volumes of renewable diesel, a fuel that offers significant environmental benefits compared with traditional petroleum-based diesel.

Renewable diesel is manufactured using renewable feedstocks and can be utilized within existing diesel engines and distribution systems. The fuel provides lower emissions while maintaining performance standards required by transportation, industrial and commercial sectors.

As global demand for cleaner transportation fuels continues to expand, renewable diesel is expected to play a critical role in helping countries meet climate commitments while ensuring reliable energy supplies. Petrobras' investment demonstrates confidence in the long-term growth prospects of this market segment.

Strategic Importance of the Presidente Bernardes Refinery ProjectThe selection of the Presidente Bernardes Refinery as the project site highlights Petrobras' strategy of leveraging existing assets to support energy transition goals. Integrating renewable fuel production within an established refining complex enables operational efficiencies, optimized logistics and enhanced cost competitiveness.

The refinery has long served as a cornerstone of Petrobras' downstream operations. The addition of renewable fuel capabilities transforms the site into a more diversified energy hub capable of supporting both traditional and emerging fuel markets.

This approach reflects a broader trend among global energy companies, many of which are adapting existing refining infrastructure to accommodate renewable fuel production rather than constructing entirely new facilities from scratch.

Petrobras' 2026-2030 Strategic Plan Emphasizes SustainabilityThe renewable fuel project forms part of Petrobras' broader strategy to navigate evolving energy markets while maintaining profitability and competitiveness. The company's 2026-2030 strategic roadmap outlines substantial investments aimed at improving operational efficiency, expanding lower-carbon businesses and strengthening long-term value creation.

As environmental regulations tighten worldwide and customer preferences increasingly favor sustainable products, investments in renewable fuels offer Petrobras an opportunity to diversify revenue streams while supporting national and international decarbonization efforts.

As per the news, the board's approval marks a critical milestone, allowing Petrobras to advance into the final contracting phase before construction activities begin.

Economic Benefits for Brazil and the Renewable Energy SectorBeyond environmental advantages, the project is expected to generate significant economic benefits. Large-scale infrastructure developments typically create employment opportunities throughout planning, construction and operational phases.

The investment may also stimulate growth across Brazil's renewable energy supply chain, including feedstock production, logistics, engineering services and technology development. Such initiatives can strengthen Brazil's position as a leading participant in the global renewable fuels market.

Furthermore, increased domestic production of renewable fuels could enhance energy security while reducing dependence on imported sustainable fuel supplies as demand accelerates in the coming decades.

Global Renewable Fuel Market Continues to ExpandThe worldwide renewable fuel market is experiencing rapid growth as industries seek practical pathways to reduce emissions. Aviation, freight transportation, shipping and industrial sectors are increasingly incorporating renewable fuel solutions into their sustainability strategies.

Analysts project continued expansion in both renewable diesel and sustainable aviation fuel markets due to supportive government policies, corporate climate commitments and technological advancements. Producers capable of achieving commercial-scale output are expected to benefit from strong demand fundamentals over the long term.

Petrobras' decision to invest $1.2 billion underscores confidence in these market dynamics and reflects its intention to remain a key player in the evolving global energy landscape.

A Landmark Step Toward a Lower-Carbon FutureThe approval of Petrobras' renewable fuel plant represents a landmark development for Brazil's energy sector. With planned production of up to 15,000 barrels per day of bioQAV and renewable diesel, the facility will become an important contributor to sustainable fuel availability in the region.

As construction moves forward and final contracts are executed, the project stands as a powerful example of how major energy companies are adapting to changing market demands. By combining industrial expertise, strategic infrastructure and substantial investment, Petrobras is laying the foundation for a more diversified and lower-carbon energy future while strengthening its competitive position in the global renewable fuels market.

PBR's Zacks Rank & Key PicksCurrently, PBR has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Delek US Holdings (DK - Free Report) , Phillips 66 (PSX - Free Report) and Murphy USA (MUSA - Free Report) , sporting a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Delek US is valued at $2.54 billion. It is a U.S.-based downstream energy company that focuses on refining crude oil and distributing petroleum products. Headquartered in Brentwood, TN, Delek US Holdings operates through two main segments: refining and logistics.

Phillips 66 is valued at $66.61 billion. It is a diversified energy company that refines crude oil, markets petroleum products, and operates midstream, chemicals, and renewable fuels businesses. Phillips 66 operates across the United States and internationally.

Murphy USA is valued at $10.18 billion. The company is one of the largest independent gasoline and convenience store retailers in the United States, operating a network of stores primarily located near Walmart locations. Murphy USA focuses on offering low-cost fuel and everyday convenience products, supported by a strong loyalty program and disciplined capital-allocation strategy.

Key Takeaways PBR and Pemex signed a non-binding two-year MoU covering upstream and downstream cooperation.Petrobras will share deepwater expertise while Pemex contributes legacy field operating experience.PBR and Pemex will assess Gulf of Mexico projects, EOR methods and technical knowledge sharing. Petrobras (PBR - Free Report) and Pemex have formalized a memorandum of understanding (“MoU”) designed to strengthen strategic and technical cooperation across exploration, production, refining and industrial energy processes, according to upstreamonline. This agreement marks a pivotal alignment between two of the region’s most influential national oil companies, reflecting a shared ambition to expand upstream capabilities, enhance operational efficiency and unlock new hydrocarbon opportunities in both deepwater and mature fields.

Strategic Alignment Between Two Energy PowerhousesThe MoU begins a framework for structured collaboration between Petrobras and Pemex in areas of mutual interest, particularly in offshore exploration and production (“E&P”). Both companies bring decades of operational expertise in complex geological environments, including deepwater basins and high-pressure reservoirs.

For Petrobras, the partnership represents an opportunity to extend its globally recognized expertise in ultra-deepwater exploration beyond Brazil’s pre-salt basin. At the same time, Pemex gains access to advanced technical capabilities in seismic interpretation, reservoir management and offshore engineering. The agreement highlights a broader geopolitical trend in which Latin American energy producers are seeking to reinforce regional cooperation to improve competitiveness in global markets.

The collaboration is expected to focus heavily on the Gulf of Mexico, particularly the Mexican side, where untapped reserves and mature assets present both challenges and opportunities for redevelopment.

Exploration and Production Expansion in the Gulf of MexicoA core pillar of the MoU is the joint evaluation of E&P opportunities in the Gulf of Mexico. This includes deepwater blocks, extra-heavy oil zones and mature fields requiring enhanced recovery techniques.

The Gulf of Mexico remains one of the world’s most technically demanding offshore basins, characterized by high geological complexity and significant capital requirements. Within this context, Petrobras is expected to contribute its expertise in pre-salt analog modeling, deepwater drilling technologies and reservoir optimization strategies.

Pemex, in turn, brings extensive operational experience in managing legacy fields and integrating large-scale production systems. The collaboration aims to combine these strengths to improve recovery rates, reduce operational inefficiencies and extend the productive life of aging assets.

Revitalization of Mature Fields and Enhanced Recovery TechniquesA major focus of the partnership is the revitalization of mature oil fields, particularly those experiencing natural decline in production. These assets represent a significant portion of Pemex’s portfolio and offer substantial potential for improved recovery through modern engineering techniques.

The companies are expected to assess enhanced oil recovery (“EOR”) methods, including gas injection, chemical flooding and advanced reservoir simulation technologies. Seismic reprocessing will also play a critical role in identifying bypassed hydrocarbons and optimizing well placement strategies.

By integrating Petrobras’ deepwater technological advancements with Pemex’s extensive field experience, the partnership seeks to establish new operational benchmarks for mature asset redevelopment in Latin America.

Industrial Cooperation Across Refining and PetrochemicalsBeyond upstream activities, the MoU extends into downstream industrial processes, including refining, petrochemicals and fertilizers. This diversification reflects a strategic intent to strengthen the entire hydrocarbon value chain.

Joint studies are expected to evaluate refinery optimization techniques, capacity utilization improvements and integration of cleaner fuel production technologies. Petrochemical collaboration may include the development of higher-value derivatives, while fertilizer-related initiatives could support agricultural productivity across the region.

This industrial cooperation aligns with broader efforts to modernize Latin America’s energy infrastructure and reduce reliance on imported refined products.

Technical Knowledge Exchange and Innovation SharingA central component of the agreement is structured knowledge exchange between technical teams. Engineers, geoscientists and project managers from both organizations will collaborate on data sharing, best practices and technological benchmarking.

Areas of focus include seismic imaging enhancement, digital oilfield technologies, predictive maintenance systems and emissions reduction strategies. The integration of digital tools is expected to improve decision-making accuracy and reduce operational downtime across joint initiatives.

This exchange of expertise is anticipated to accelerate innovation cycles and strengthen both companies’ capacity to manage increasingly complex energy assets.

Governance Framework and Non-Binding StructureThe MoU is established as a non-binding framework with a validity period of two years. While this signals strong intent for cooperation, it does not constitute a financial commitment or formal joint venture. Instead, it serves as a platform for identifying viable projects and conducting feasibility assessments.

Any future project implementation will be subject to separate negotiations, regulatory approvals and investment decisions by both parties. This flexible structure allows Petrobras and Pemex to explore opportunities without immediate capital commitments while maintaining strategic alignment.

Implications for Latin American Energy IntegrationThe partnership between Petrobras and Pemex reflects a broader shift toward regional energy integration in Latin America. By leveraging complementary strengths, both companies aim to enhance energy security, improve production efficiency and strengthen their positions in global oil markets.

The collaboration also signals increased cooperation between Brazil and Mexico in strategic industrial sectors, potentially extending beyond hydrocarbons into energy transition technologies in the future.

As global energy dynamics evolve, such alliances may play a crucial role in ensuring that national oil companies remain competitive while adapting to technological, environmental and economic transformations.

Outlook for Offshore Development and Energy StrategyLooking ahead, the Petrobras-Pemex cooperation is expected to generate a pipeline of joint studies, pilot projects and technical evaluations across multiple segments of the energy value chain. If successful, this collaboration could serve as a model for other cross-border partnerships in the global oil and gas industry.

The emphasis on deepwater exploration, mature field revitalization and industrial integration positions the agreement as a forward-looking initiative aimed at maximizing resource efficiency and technological advancement.

Ultimately, this strategic alignment represents more than a bilateral agreement; it signals a coordinated effort to redefine the role of Latin America’s national oil companies in an increasingly complex global energy environment.

PBR's Zacks Rank & Key PicksCurrently, PBR has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Delek US Holdings (DK - Free Report) , Phillips 66 (PSX - Free Report) and Crescent Energy Company (CRGY - Free Report) , sporting a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Delek US is valued at $2.63 billion. It is a U.S.-based downstream energy company that focuses on refining crude oil and distributing petroleum products. Headquartered in Brentwood, TN, Delek US Holdings operates through two main segments: refining and logistics.

Phillips 66 is valued at $67.52 billion. It is a diversified energy company that refines crude oil, markets petroleum products, and operates midstream, chemicals, and renewable fuels businesses. Phillips 66 operates across the United States and internationally.

Crescent Energy Company is valued at $3.47 billion. It is an independent U.S. energy company engaged in the acquisition, exploration, development and production of crude oil, natural gas, and natural gas liquids. Crescent Energy operates primarily in the Eagle Ford, Permian and Uinta basins.

Key Takeaways Nebius ended Q1 2026 with $9.3B in cash after debt, equity and upfront-payment inflows.Nebius lifted 2026 capex guidance to $20B-$25B as it accelerates capacity expansion.Nebius says demand exceeds supply, available capacity is selling out and 2027 commitments are in place. Nebius Group N.V. (NBIS - Free Report) has built a sturdy cash profile with $9.3 billion in cash and cash equivalents at the end of the first quarter of 2026. A strong cash position offers ample financial flexibility to pursue expansion, both organic and inorganic.

The cash build was driven by various financial initiatives, including a $4.3 billion convertible debt raise (gross proceeds) and a $2 billion equity investment from NVIDIA, alongside customer upfront payments that boosted operating cash flow to $2.3 billion for the quarter.

This fortified balance sheet comes at a time when Nebius is rapidly focused on capacity expansion, which has led to a sharp acceleration in capital expenditures. Capex for 2026 is now expected to be $20-$25 billion, up from its earlier guidance of $16-$20 billion.

Management noted that the capacity deployment is tied to visibility into future demand, particularly for 2027, for which it already has customer commitments in place. The company also noted that it is already selling out the available capacity, with demand consistently exceeding supply, implying that spending is less speculative and more about meeting anticipated workloads.

Importantly, Nebius is using various sources to fund capacity expansion. The company is raising capital through asset-backed financing buoyed by its contracts with Meta and Microsoft (MSFT - Free Report) . Other financing options include corporate-level debt and an at-the-market program.

With demand continuing to exceed supply and most capacity already sold out, Nebius appears well positioned to convert its cash strength into capacity expansion. While execution remains key, the company’s sizable cash and funding flexibility provide a strong foundation to scale its AI cloud platform. However, the opportunity is unfolding in a highly competitive space with tech giants and pure plays like CoreWeave (CRWV - Free Report) aggressively focused on capacity build to capture a rapidly developing market.

Taking a Look at Competitors’ Financial ResourcesCoreWeave is shoring up its financial resources to support AI infrastructure buildouts. At the first quarter-end, the company had more than $3.3 billion in cash, cash equivalents, restricted cash and marketable securities, while securing more than $20 billion in debt and equity capital financing year to date (as announced on the last earnings call), widening access to capital while lowering its cost of debt.

Like NBIS, the company also raised $2 billion in equity tied to its NVIDIA partnership. CRWV has dramatically accelerated investments to keep up with AI demand. 2026 capital expenditures are projected to be between $31 billion and $35 billion, reflecting the broad scale of its AI infrastructure ambitions.

Microsoft’s financial resources are stupendous. As of March 31, 2026, cash, cash equivalents and short-term investments stood at $78.3 billion. For the last reported quarter, the company generated $46.7 billion in operating cash flow, up 26% year over year, while free cash flow stood at $15.8 billion despite accelerated capital spending. MSFT is scaling investments, with fiscal third-quarter capital expenditures hovering at $31.9 billion. Fiscal fourth-quarter capex is expected to exceed more than $40 billion, reflecting the continued buildout of AI infrastructure.

For calendar 2026, Microsoft plans to invest approximately $190 billion in capex, including about $25 billion attributed to component pricing pressures, underscoring both scale and inflationary pressures in AI infrastructure. Increasing capital intensity remains a key concern for investors. MSFT's long-term debt (including the current portion) was $40.3 billion as of March 31, 2026.

NBIS Price Performance, Valuation and EstimatesShares of Nebius are up 40.6% in the past month compared with the Internet – Software and Services industry’s 11.3% growth.

Image Source: Zacks Investment Research

On a forward price-to-sales basis, NBIS’ shares are trading at 10.62X, above the Internet Software Services industry’s 4.53X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NBIS’ earnings for 2026 has been revised upwards over the past 60 days.

Image Source: Zacks Investment Research

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

Nebius Group (NBIS 6.44%) has come a long way in a short time. The company was formed in 2024, emerging from the remnants of the Dutch holding company Yandex N.V., which was primarily a Russian internet company. But after Russia invaded Ukraine and Russian companies faced sanctions, Yandex shed its Russian assets and rebranded as Nebius, an artificial intelligence cloud services company.

The newly formed Nebius began trading on Nasdaq on Oct. 21, 2024, and has been one of the biggest winners in the market ever since. The stock is up 1,320% since Nebius began trading, by far outperforming the overall market as investors recognized the critical role that data centers and computing capacity will have on the growth of AI. Shares jumped nearly 30% in the last week and are challenging the $300 mark.

Now, Nebius is getting some more good news -- starting June 22, it will be a member of the Nasdaq-100 index, meaning the stock will be scooped up by many index funds, potentially pushing shares even higher.

Let’s take a closer look at Nebius and why it’s been so popular.

Image source: The Motley Fool.

About Nebius stockNebius appears to have the right business model at the perfect time. The company provides cloud computing and graphics processing unit (GPU) capacity for running and training AI workloads.

The company operated seven data centers in North America, Europe, and Israel by the end of 2025, and has plans to operate 16 by the end of this year.

It also has some key partnerships. In March, Nebius announced a $2 billion investment from Nvidia to scale more than 5 gigawatts of next-generation full-stack AI capacity using Nvidia’s computing platform.

Nebius also has a five-year AI infrastructure deal with Microsoft, valued at up to $19.4 billion, to supply dedicated GPU capacity and more than 100,000 Nvidia GPUs. And it has commitments from Meta Platforms for additional AI infrastructure capacity, potentially valued at up to $27 billion.

Earnings for the first quarter included revenue of $399 million, up 684% from a year ago, and net income from operations of $621.2 million, up from a loss of $104.3 million in the first quarter of 2025.

Nebius also completed its acquisition of Eigen AI on June 10. Eigen, an inference and model optimization company, is expected to help Nebius improve its token factory inference platform, providing customers with faster time to production and the ability to adopt new models more quickly.

Management says the company is on track to see $3 billion to $3.4 billion in revenue this year, and between $7 billion and $9 billion in annual recurring revenue (ARR). The company had $9.3 billion in cash on hand at the end of the first quarter and raised $6.3 billion in the quarter through convertible notes and the Nvidia investment.

Today's Change

(

-6.44

%) $

-17.73

Current Price

$

257.52

“We continue to see unprecedented demand across the market,” CEO Arkady Volozh said. “Compute and cloud needs are vastly exceeding capacity as more industries embrace AI and companies move beyond experimentation to real-world applications. We are seeing this demand firsthand and are capturing it with our full-stack AI-native cloud.”

About the Nasdaq-100The Nasdaq-100 tracks the 100 largest non-financial companies on the Nasdaq exchange, using a modified market-cap weighting system that caps the largest names to prevent the index from becoming overconcentrated. There are many exchange-traded funds that track the Nasdaq-100, including the Invesco QQQ Trust, or the Direxion Nasdaq-100 Equal Weighted Index ETF.

Nasdaq announced on June 11 that it was adding Nebius, Astera Labs, CoreWeave, Rocket Lab, and Teradyne to the index. The index will drop Charter Communications, Cognizant Technology Solutions, Insmed, Verisk Analytics, and Zscaler.

Nebius stock jumped nearly 10% on the announcement.

Patrick Sanders has positions in Invesco QQQ Trust, Nebius Group, and Nvidia. The Motley Fool has positions in and recommends Meta Platforms, Microsoft, Nvidia, Rocket Lab, Teradyne, Verisk Analytics, and Zscaler. The Motley Fool recommends Astera Labs, Cognizant Technology Solutions, and Nasdaq. The Motley Fool has a disclosure policy.

Nebius (NBIS 6.44%) has become one of the most intriguing AI infrastructure stocks in the market. The company's revenue growth, hyperscaler agreements, and power expansion plans have created a rather exciting bull case. But with valuation risk, capital intensity, and execution pressure rising, the real question is whether Nebius can become foundational AI infrastructure.

Stock prices used were the market prices of June 5, 2026. The video was published on June 21, 2026.

Rick Orford has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Buying a stock in the midst of a red-hot rally can be risky because it may eventually run out of steam. It's particularly concerning when the valuation has already gotten out of control and no longer has a grounding in fundamentals.

That's the scenario that investors find themselves in with Nebius Group (NBIS 6.44%). The tech stock is up around 240% this year. It's generated incredible growth, attracted an investment from Nvidia, and still offers attractive long-term opportunities, but there's no denying the stock has become expensive.

Is the stock still a good buy right now, or are you better off just putting Nebius on your watch list?

Image source: Getty Images.

Why has Nebius' stock been taking off this year? Nebius is a Dutch-based tech company that's right at the heart of the artificial intelligence (AI) revolution. It is an AI cloud company that provides a platform for businesses to train and deploy AI. It serves a variety of sectors, including healthcare, financial services, and retail, among others.

A quick look at its results confirms the growth has been incredible. During the first three months of the year, the company reported $399 million in revenue, which is an increase of 684% year over year. Although its operating loss actually increased from the prior-year period, investors appear to be willing to overlook that given Nebius' incredible top-line growth and continued growth opportunities.

Plus, with Nvidia announcing a strategic partnership with Nebius earlier this year that includes a $2 billion investment, investors likely see that as a strong vote of confidence in its future.

Today's Change

(

-6.44

%) $

-17.73

Current Price

$

257.52

Can Nebius stock rise even higher? Due to its significant run-up in value, Nebius stock now trades at close to 90 times its trailing revenue. Even with tremendous growth ahead, it may be a steep price to pay for the stock, given that CoreWeave, a comparable business that helps tech giants train and run AI models, trades at less than 10 times sales.

At its current valuation, Nebius investors are paying for a lot of future growth, which means expectations will be high and potentially difficult to meet in upcoming earnings reports. Although Nebius has performed exceptionally well this year, I wouldn't buy it right now as there's considerable downside risk given how hot the stock has become. It may be a good idea to track the stock and keep an eye on it, but at an egregiously high premium, it could be running out of room to rise higher.

AMSTERDAM--(BUSINESS WIRE)--Nebius today unveiled Nebius AI Cloud 3.6, adding new developer experience, security and governance improvements, as well as enhanced storage capabilities for teams running AI in production on Nebius’s full-stack AI cloud platform.

Version 3.6 of Nebius AI Cloud “Aether” introduces Nebius Echo, a first look at Nebius’s AI agent for controlling cloud infrastructure using natural language. Built directly into the Nebius AI Cloud web console, Echo can answer questions and execute core operations, with guardrails to prevent unintentional actions. Nebius Echo runs on open-source models hosted on Nebius Token Factory, Nebius’s production inference platform.

Echo is a step toward a cloud built for agentic AI, where the platform itself helps evaluate options, and provision and configure resources as workloads demand them. The first-look version released today covers core cloud services, with infrastructure debugging and multi-step infrastructure-as-code deployments among upcoming features on the roadmap.

Aether 3.6 also delivers a broader set of developer experience improvements targeting the time teams lose before the real work begins. This includes one-click access and deeper integration with SkyPilot, with no control plane to maintain; a new step-by-step instance creation workflow; global search across all services and tenants; a unified Notification Center; and more.

Nebius is today also opening the Nebius Builder Program in early preview, offering developers and ML engineers credits across Nebius AI Cloud, Nebius Token Factory, and Nebius Academy, the company’s learning and research arm, plus engineer office hours and a builder community.

Members of the Nebius Builder Program additionally get early access to the new Nebius Certifications program developed by Nebius Academy, starting with AI Cloud Ops (Associate), available now. Additional tracks for AI application builders, solutions architects, infrastructure engineers, and business leaders across the Nebius ecosystem will be introduced in the coming weeks.

The new release of Nebius AI Cloud unveiled today also extends the security and governance controls that teams need to run sensitive workloads in regulated environments. A new Key Management Service (KMS) with customer-managed encryption keys (CMEK) and cryptographic erasure puts control of data encryption into customers’ hands, while Workload Identity Federation enables credential-free authentication across environment boundaries.

Other enhancements include more granular controls for Soperator, Nebius's managed Slurm-on-Kubernetes service, and Managed Kubernetes, including a new “Bring Your Own Image” (BYOI) feature for hardened or compliance-validated base images. The release also introduces a new Budgets feature, letting FinOps teams set spending targets and threshold-based alerts across projects.

Running AI in production at scale also means addressing one of the first common storage bottlenecks, where performance and cost often decide how far and how fast teams can scale. Nebius AI Cloud 3.6 delivers local SSDs on GPU servers for high-performance caching, removing I/O bottlenecks during training and inference.

A new Intelligent Object Storage Class automatically moves archived data to a lower-cost tier, with no request or egress fees. Using the Enhanced class, Object Storage now shows 30% more read bandwidth for single-threaded client connections. On the shared filesystem, 4K file operations deliver 3x more IOPS, metadata-heavy workloads deliver up to 100x more IOPS, and validated cluster sizes now reach 100 PB.

Nebius AI Cloud Aether 3.6 — at a glance

Developer experience

Nebius Echo, an AI agent for natural-language infrastructure control Managed Service for SkyPilot Unified Notification Center Global Search New instance creation workflow Updated pricing calculator Security and governance

KMS with customer-managed encryption keys (CMEK) Workload Identity Federation Soperator IAM-based access Managed Kubernetes API access control Budgets Bring Your Own Image (BYOI) Datadog Log Management integration Disk snapshots Storage and other platform improvements

Intelligent Object Storage Class with automatic cost-tier migration 30% read Object Storage bandwidth improvement for single-thread connections Local SSD disks on GPU servers 3x more IOPS for 4K files operations and up to 100x more IOPS for metadata-heavy workloads for Shared Filesystem Validated filesystem clusters size up to 100 PB Kubernetes v1.34 support Additional resources

Blog post from our Product Management team Nebius Builder Program Nebius Certifications Webinar About Nebius

Nebius, the AI cloud company, is building the full-stack platform for developers and companies to take charge of their AI future — from data and model training to production deployment. Founded on deep in-house technological expertise and operating at scale with a rapidly expanding global footprint, Nebius serves startups and enterprises building AI products, agents, and services worldwide. Nebius is listed on Nasdaq (Nasdaq: NBIS) and headquartered in Amsterdam.

For more information please visit nebius.com.

Media kit nebius.com/media-kit.

Disclaimer

Forward-looking statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. All statements contained in this press release other than statements of historical fact, including, without limitation, statements regarding our future financial and business performance, strategy, expected growth, planned investments and capital expenditures, capacity expansion plans, anticipated future financing transactions and expected financial results, are forward-looking statements. The words "anticipate," "believe," "continue," "estimate," "expect," "guide," "intend," "likely," "may," "will" and similar expressions and their negatives are intended to identify forward-looking statements.

These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. Actual results may differ materially from the results predicted or implied by such statements, and our reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted or implied by such statements include, among others: market, macroeconomic and geopolitical conditions; our ability to build, operate and manage our businesses to the desired scale; competitive pressures; technological developments; our ability to secure and retain clients; our ability to secure additional capital to enable the growth of the business; unpredictable sales cycles; and potential pricing pressures; as well as those risks and uncertainties related to our continuing businesses included under the captions "Risk Factors" and "Operating and Financial Review and Prospects" in our Annual Report on Form 20-F for the year ended December 31, 2025, filed with the SEC on April 30, 2026, which is available on our investor relations website at https://nebius.com/investor-hub and on the SEC website at www.sec.gov.

All information in this press release is as of the date hereof (unless stated otherwise). Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date hereof and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

Investors might want to bet on Diversified Healthcare (DHC - Free Report) , as it has been recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.

The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.

The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. These are mostly driven by subjective factors that are hard to see and measure in real time.

As such, the Zacks rating upgrade for Diversified Healthcare is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price.

Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.

Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Diversified Healthcare imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.

Harnessing the Power of Earnings Estimate RevisionsAs empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .

Earnings Estimate Revisions for Diversified HealthcareFor the fiscal year ending December 2026, this residential care real estate investment trust is expected to earn $0.60 per share, which is unchanged compared with the year-ago reported number.

Analysts have been steadily raising their estimates for Diversified Healthcare. Over the past three months, the Zacks Consensus Estimate for the company has increased 5.3%.

Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of Diversified Healthcare to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

Key Takeaways Redwire is strengthening its ISR position with advanced sensors and mission-critical systems.Redwire's Octopus E140 MWIR supports target detection, geolocation and day-night operations.Redwire shares rose 68.5% in six months, while 2026 and 2027 estimates moved lower. Redwire Corporation (RDW - Free Report) continues to strengthen its position in the Intelligence, Surveillance and Reconnaissance (ISR) market through advanced sensor technologies and mission-critical space and airborne systems. The company develops innovative solutions that support defense, security and intelligence operations, helping military and government customers gather actionable information across challenging operational environments.

A key example is Redwire's upgraded Octopus E140 Mid-Wave Infrared (MWIR) system, a next-generation gyrostabilized Electro-Optical/Infrared (EO/IR) aircraft payload designed to deliver advanced ISR capabilities. The system combines MWIR sensing, high-definition EO imaging and onboard processing technologies to provide superior image quality, target detection and geolocation capabilities during day and night operations.

The Octopus E140 MWIR is specifically designed for missions that require long-range surveillance, border monitoring, infrastructure protection and reconnaissance in contested environments. Its ability to maintain image clarity through smoke, fog, dust and low-light conditions enables operators to make faster and more informed decisions. The system's lightweight design also makes it suitable for a wide range of airborne platforms where payload size and weight are critical considerations.

With global defense agencies increasingly prioritizing situational awareness and real-time intelligence gathering, demand for advanced ISR solutions is expected to remain strong. Redwire's continued investments in EO/IR technologies and mission-focused sensor systems position it to benefit from these long-term defense modernization trends.

Other Stocks to Keep on the WatchlistOther aerospace and defense companies expanding their ISR capabilities are discussed below:

Lockheed Martin (LMT - Free Report) : The company provides intelligence, surveillance and reconnaissance (ISR) solutions across land, air, sea and space domains. Its capabilities include the Command, Control, Battle Management and Communications (C2BMC) system, along with advanced space-based and airborne sensors that enhance situational awareness, threat tracking and missile defense operations.

RTX Corporation (RTX - Free Report) : The company offers a range of ISR technologies, including advanced sensors, radar systems and surveillance solutions. Its portfolio features the AN/TPY-2 radar and airborne ISR systems that support threat detection, target tracking and mission planning, helping defense customers improve operational awareness.

The Zacks Rundown for RDWShares of RDW have risen 68.5% in the past six months against the industry’s 7.5% decline.

Image Source: Zacks Investment Research

The company shares are trading at a premium on a relative basis, with its forward 12-month Price/Sales being 5.33X compared with its industry’s average of 2.62X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for RDW’s 2026 and 2027 earnings has moved south over the past 60 days.

Image Source: Zacks Investment Research

Is Space Exploration Technologies (SPCX +1.61%) stock bad for space stocks? In a year that saw Redwire (RDW 4.25%) stock double in the run-up to the SpaceX IPO, that sounds like a strange question, but here's the thing:

SpaceX might be both good and bad for space stocks like Redwire.

Case in point: This morning, SpaceX announced plans to float (a rumored) $20 billion of debt in what it's calling its "Inaugural Bond Issuance." SpaceX stock is down 10.5% through 12:50 p.m. ET on the news, and Redwire is down 8%.

Image source: Getty Images.

SpaceX wants (not needs) a loan SpaceX just raised more than $80 billion in its wildly popular initial public offering. Post-IPO, the company has "approximately $100.8 billion in cash and cash equivalents" available.

So why is SpaceX seeking another $20 billion?

The biggest clue is SpaceX emphasizing the "inaugural" nature of this bond issuance. There's never been a market for publicly traded SpaceX bonds before. Presumably, one thing SpaceX hopes to accomplish with this bond offering is to gauge how popular its bonds are with investors today -- how much money it could raise if it needed to, and how much interest it would have to pay.

Today's Change

(

-4.25

%) $

-0.52

Current Price

$

11.70

What this means for Redwire stock This is why I consider the bond offering neither good nor bad news for SpaceX stock. But for Redwire, I fear the SpaceX bond offering is nothing but bad news.

Think about it. SpaceX just held an IPO that sucked $80 billion out of the market for space investors. Now, SpaceX is raising another $20 billion from investors looking to lend money to space stocks.

SpaceX is sucking all the figurative air out of the room. Cash-burning space stocks like Redwire could soon find it harder to raise the money they need.

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

Coiled Therapeutics (AIM:COIL, OTCQB:COTXF), the AIM-listed clinical-stage oncology company, has appointed Craig Tooman as an independent non-executive director with effect from 25 June.

Tooman most recently served as president, chief executive and board director of Silence Therapeutics, the Nasdaq-listed siRNA company.

He brings more than 30 years of pharmaceutical and biotechnology leadership experience spanning clinical, operational, financial and capital markets roles.

The company said Tooman had directly participated in raising nearly $9 billion in capital across his executive and board roles.

At Silence Therapeutics, he helped transform the business from an early-stage UK research enterprise trading mainly on AIM into a well-financed Nasdaq-listed global developer.

Coiled said his career included a string of strategic transactions.

As chief executive of Aratana Therapeutics (NASDAQ:PETX), he negotiated its $250 million merger with Elanco, while at ILEX Oncology he led a $1.1 billion acquisition by Genzyme (NASDAQ:GENZ).

He also served on the supervisory board of CureVac until its acquisition by BioNTech in 2025.

Coiled said his oncology background aligned with its precision medicine focus and lead candidate, AO-252.

Chairman Sotirios Stergiopoulos said Tooman's public company track record and ability to finance and scale clinical-stage companies would be valuable as the company advanced AO-252 through the clinic and broadened its investor base.

Veteran mine builder Matthew Gili will join American Rare Earths Ltd (ASX:ARR, OTCQX:ARRNF)'s board as a non-executive director as the company advances the Halleck Creek Rare Earths Project in Wyoming and prepares for a planned Nasdaq compliance listing in H2 2026.

Gili is currently president and CEO of Ur-Energy Inc, a NYSE American and TSX-listed Wyoming uranium producer, and brings more than 25 years of mine development and operational experience across major global mining groups including Rio Tinto and Barrick.

His appointment remains subject to completion of Australian regulatory formalities, which American Rare Earths expects to be completed shortly.

Once formally appointed, Gili will join the company’s Technical Committee and contribute to the Definitive Feasibility Study workstream at Halleck Creek, which American Rare Earths describes as the largest known rare earth deposit in the United States on a total rare earth oxide basis.

Board renewal ahead of US listing plans The appointment forms part of a broader board renewal process as ARR works toward a Nasdaq compliance dual-listing in H2 2026, while retaining the ASX as its primary listing.

The company is also considering a full US domicile in 2027, subject to a prospective shareholder vote.

CEO Mark Wall said Gili’s operational experience and Wyoming background would strengthen the board as Halleck Creek moves toward construction and production.

“The intended addition of Matt to our Board of Directors further demonstrates our commitment to advancing the largest rare earth element deposit on a total contained rare earths basis in the United States toward construction and operations. Matt brings a tremendous blend of mining technical expertise and Wyoming-specific experience to both the Board and the Technical Committee. His depth of operational knowledge, his relationships in Wyoming, and his proven track record of delivering world-class mining projects, including building the first new copper mine in the United States in a decade, make him exactly the right person to help us get Halleck Creek built.

“As we progress toward our NASDAQ listing later this year, appointments of this calibre send a clear message to U.S. investors about the quality of the team and the seriousness of our intent. Matt's experience managing ISR uranium operations in Wyoming gives him first-hand knowledge of the hydrometallurgical processing chemistry that will be central to bringing Halleck Creek into production. The parallels between uranium and rare earth processing are substantial and practically meaningful. This is not simply a credential; it is operational expertise that will directly benefit our Technical Committee and Feasibility Study.”

Wyoming experience to support Halleck Creek Gili is based in Casper, Wyoming, and has direct operational experience in the state’s regulatory, permitting and community environment.

American Rare Earths said that experience was directly relevant to Halleck Creek, which is in Albany and Platte counties, and to the Cowboy State Mine area within the broader project.

The company has started its 2026 feasibility-study-level drilling program at Cowboy State Mine, targeting geological and geotechnical data to support ore reserve estimates, engineering, environmental baseline studies and pilot-scale metallurgical test-work.

Gili said the company was at an important point in the development of a domestic rare earths supply chain.

“ARE is at a pivotal moment for the domestic rare earths industry. The strategic mandate for secure, reliable supply chains has never been stronger, and assets of Halleck Creek's scale and quality come along once in a generation. Throughout my career I have focused on building safe, high-performing mines and operational teams that execute.

“My experience leading ISR uranium operations in Wyoming has given me a direct understanding of the hydrometallurgical processing disciplines acid leaching, solvent extraction, ion exchange that are at the heart of rare earth extraction and separation. I have seen how these technologies operate at scale in a Wyoming regulatory and environmental context, and I believe that experience will be genuinely useful as American Rare Earths advances toward its Definitive Feasibility Study and processing pilot programmes at Halleck Creek.

“Wyoming is my home. I am proud to bring this experience to American Rare Earths and to work with the team to advance this world-class deposit into production for the benefit of our state, our investors, and our nation's supply chain security.”

Processing crossover with uranium ISR American Rare Earths said Gili’s background in uranium in-situ recovery, or ISR, was relevant because the processing route shares core chemistry with rare earth hydrometallurgy.

The company pointed to common processes including sulfuric acid leaching, solvent extraction, ion exchange, precipitation, drying and solution management.

Gili has overseen ISR uranium hydrometallurgy at Lost Creek, an operating Wyoming ISR facility, giving him experience in similar processing disciplines in the same state regulatory and environmental setting.

The company said the appointment would also add US public company experience as American Rare Earths works through the governance, disclosure and investor relations requirements associated with a Nasdaq listing.

Last month, the U.S. government announced plans to acquire equity stakes in nine different quantum computing companies, providing $2 billion in total funding to help America build a leadership position in this important industry. Rigetti Computing (RGTI 7.10%) will receive a $100 million investment over three years, and its stock has jumped by 20% since the news broke.

Quantum computers can use a concept called superposition to simulate multiple solutions to a given problem at once, so they are more efficient at processing specific workloads compared to traditional computers, especially in areas like science and cryptography. Rigetti makes some of the industry's best quantum systems, but they still make far too many errors to solve most real-world problems.

While the U.S. government's backing is great news, Rigetti still generates a very small amount of revenue relative to its market capitalization. Here's why I predict its elevated valuation will lead to a 50% (or more) decline in its stock price during the second half of this year.

Image source: Getty Images.

It could be decades before quantum computers are truly useful Rigetti is uniquely positioned to lead the quantum industry because it has built its own supply chain, which means it can bring new computers to market much faster than its competitors. It operates its own fabrication facility, developed its own quantum programming language called Quil, and it has also built a cloud platform where it rents quantum computing capacity to other businesses for a fee.

Rigetti's flagship Cepheus-1-108Q quantum computer is the industry's largest multichip system. With 108 qubits, it delivers three times the scale of the company's previous Cepheus-1-36Q system, while boasting a median single-qubit gate fidelity of 99.9%. That means it makes just one error per every 1,000 quantum operations. But its two-qubit gate fidelity is 99.1%, implying nine errors per 1,000 operations, so it's still impractical for solving many real-world problems.

Making multiple qubits work together in harmony is one of the biggest challenges in quantum computing, because they are highly sensitive to noise and interference. Rigetti believes it can upgrade Cepheus-1-108Q to achieve a two-qubit fidelity of 99.5% this year, but the company says a system with a two-qubit fidelity of 99.9% could be three years away.

According to an estimate by Ark Investment Management, it could take somewhere between 20 and 40 years before quantum systems are accurate enough to disrupt areas like cryptography, so even as one of the industry leaders, Rigetti still has a long way to go.

Inconsistent revenue growth and steep losses Rigetti's revenue soared by 198% year over year in the first quarter to reach $4.4 million. The company intends to deliver an $8.4 million order for Cepheus-1-108Q to India's Center for Development of Advanced Computing later this year, so that alone would result in revenue growth for 2026 relative to the prior year.

However, Rigetti's revenue declined in 2025, so there isn't a sustained upward trend just yet. This is a common trait of companies in the start-up phase, but that only makes Rigetti's $7 billion market capitalization all the more problematic in my opinion (more on that in a moment).

Today's Change

(

-7.10

%) $

-1.51

Current Price

$

19.77

The company's bottom line is the main concern right now because it isn't generating anywhere near enough sales to cover all of its costs. Its operating expenses totaled $27.3 million in the first quarter, resulting in a generally accepted accounting principles (GAAP) net loss of $20.5 million. That followed a $216 million net loss in 2025.

Based on these numbers, the government's $100 million investment over three years won't stretch very far. Fortunately, Rigetti had $569 million in cash, equivalents, and short-term investments on hand as of March 31, so it can sustain its losses for now. But I think a capital raise is likely within the next couple of years, which would dilute existing shareholders and hurt their future returns.

Rigetti's sky-high valuation opens the door to downside Elon Musk's space transportation and satellite internet company, Space Exploration Technologies (SPCX +0.69%), went public last Friday, and its stock currently trades at a price-to-sales (P/S) ratio of 137.8. It's wildly expensive when you consider the Nasdaq-100 index trades at a P/S ratio of just 6.9.

But brace yourself, because Rigetti's P/S ratio is currently an eye-popping 663. Even if we value Rigetti based on Wall Street's consensus 2026 revenue estimate of $23.6 million (provided by Yahoo! Finance), its forward P/S ratio is still almost 300.

RGTI PS Ratio data by YCharts

That means even if Rigetti's stock plummeted by 50% in the second half of 2026, it would still be more expensive than SpaceX is today. I think a loss of that magnitude is entirely possible given the company's lumpy revenue growth and steep losses. In fact, if it doesn't hit Wall Street's revenue target, its stock might fall even more sharply.

In summary, despite the long-term potential of quantum computing, Rigetti stock probably isn't a great buy at the current price.

Rigetti Computing, Inc. (RGTI - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this company have returned -3.1%, compared to the Zacks S&P 500 composite's +1.4% change. During this period, the Zacks Internet - Software industry, which Rigetti Computing falls in, has lost 0.7%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Rigetti Computing is expected to post a loss of $0.03 per share, indicating a change of +40% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

For the current fiscal year, the consensus earnings estimate of -$0.18 points to a change of +71.9% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of $0.18 indicates a change of +0.9% from what Rigetti Computing is expected to report a year ago. Over the past month, the estimate has remained unchanged.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Rigetti Computing is rated Zacks Rank #4 (Sell).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

In the case of Rigetti Computing, the consensus sales estimate of $4.91 million for the current quarter points to a year-over-year change of +173%. The $25.32 million and $52.04 million estimates for the current and next fiscal years indicate changes of +257.3% and +105.5%, respectively.

Last Reported Results and Surprise HistoryRigetti Computing reported revenues of $4.4 million in the last reported quarter, representing a year-over-year change of +199.3%. EPS of -$0.04 for the same period compares with -$0.08 a year ago.

Compared to the Zacks Consensus Estimate of $3.24 million, the reported revenues represent a surprise of +35.59%. The EPS surprise was +20%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates just once 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.

Rigetti Computing is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Rigetti Computing. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.

Key Takeaways Rigetti says dilution refrigeration is mature and can support 1,000-qubit and larger systems.Management cites 50-70 nanosecond gate speeds, about 1,000 times faster than some rivals.Rigetti says its speed edge and chiplet scaling could help reach quantum advantage in about three years. The sharp focus of Rigetti Computing's (RGTI - Free Report) first-quarter 2026 earnings call was not merely on its newly launched 108-qubit Cepheus system but also on addressing a long-standing concern surrounding superconducting quantum computing — the dependence on dilution refrigeration. Management argued that while superconducting systems require cooling to around 10 millikelvin, dilution refrigeration is a mature technology that has existed for decades and is now being commercialized for quantum applications.

The company emphasized that multiple vendors already supply these systems and that existing technology roadmaps support scaling to 1,000-qubit and even tens-of-thousands-of-qubit systems, suggesting that cooling infrastructure is unlikely to constrain its growth trajectory.

More importantly, Rigetti contends that the tradeoff is worthwhile because superconducting quantum computing offers substantial advantages in speed and scalability. Management noted that its systems currently achieve gate speeds of roughly 50-70 nanoseconds, making them approximately 1,000 times faster than certain competing modalities, such as trapped-ion and neutral-atom systems.

The company believes this speed advantage, coupled with the chiplet-based scaling approach, positions it favorably to reach quantum advantage in roughly three years. By directly challenging the notion that refrigeration requirements could hamper commercialization, Rigetti is attempting to strengthen investor confidence in its superconducting roadmap and reinforce the long-term viability of the technology platform.

Peers UpdatesD-Wave Quantum (QBTS - Free Report) also recently announced that it has signed an LOI with the U.S. Department of Commerce for $100 million in proposed funding under the CHIPS and Science Act to accelerate the development and scaling of the annealing and gate-model quantum computing technologies. The funding, which would be accompanied by a $100 million equity stake for the U.S. government, is expected to support quantum system development at D-Wave’s upcoming Boca Raton, FL, facility and its existing R&D centers.

The initiative could help accelerate the delivery of advanced quantum systems, including a 100,000-qubit annealing computer and a 10,000-qubit gate-model system, while strengthening the company’s position in the growing quantum computing market and supporting broader U.S. technology leadership objectives.

IonQ (IONQ - Free Report) recently opened a new 22,000-square-foot quantum computing R&D laboratory and semiconductor chip testing facility in Boulder, CO, to support the development of future generations of its trapped-ion quantum computing systems. The facility will enable the company to design, test and refine advanced semiconductor ion-trap chips, with plans to install its first quantum computer later this year. By expanding presence in Colorado's growing quantum technology ecosystem and leveraging the region's deep-tech talent pool, IONQ aims to accelerate innovation, scale production capabilities and advance its roadmap toward fault-tolerant quantum computing.

Rigetti’s Price Performance, Valuation and Estimates

Shares of RGTI have lost 3.6% in the year-to-date period compared with the industry’s decline of 13.8%.

Image Source: Zacks Investment Research

From a valuation standpoint, Rigetti trades at a price-to-book ratio of 12.16, above the industry average. RGTI carries a Value Score of F.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Rigetti’s 2026 earnings implies a significant 70.3% improvement from the year-ago period.

Image Source: Zacks Investment Research

The company currently has a Zacks Rank #4 (Sell).

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

Key Takeaways Rigetti appears better positioned for near-term upside after Quantinuum's IPO reset sector valuations.RGTI's 108-qubit Cepheus-1-108Q and $569M cash balance support its chiplet-based roadmap.IonQ leads commercialization with $64.7M in Q1 revenues, but its sharp rally may limit near-term gains. After a volatile start to 2026, quantum computing stocks have staged an impressive comeback. Since April 1, shares of IonQ (IONQ - Free Report) have surged 109.9%, while Rigetti Computing (RGTI - Free Report) has rallied 58.4%, both significantly outperforming the S&P 500's 14.5% gain. The recovery reflects renewed investor optimism toward the quantum computing industry as commercialization milestones accelerate and governments and enterprises increase investments in next-generation computing technologies.

The latest catalyst fueling enthusiasm is the Quantinuum's (QNT - Free Report) blockbuster public listing. The company has emerged as one of the largest pure-play quantum computing firms, and its public debut is resetting valuation expectations across the industry. Investors now have a new benchmark for assessing publicly traded quantum names, sparking fresh interest in companies with credible technology road maps, growing commercial traction and sufficient capital to scale their platforms.

With the quantum sector entering a new phase of price discovery following Quantinuum's listing, investors must determine which stock is better positioned to capitalize on the industry's next leg of growth. Let's find out.

Image Source: Zacks Investment Research

Rigetti's Chiplet Progress and Adoption Fuel GrowthRigetti continues to strengthen its position in superconducting quantum computing through its differentiated chiplet-based architecture and improving commercial traction. In the first quarter of 2026, the company reported revenue growth of nearly 199% year over year to $4.4 million, driven primarily by on-premises Novera QPU deliveries and related contracts.

The company recently achieved general availability of its 108-qubit Cepheus-1-108Q system, one of the largest modular quantum computers currently available. Rigetti's chiplet architecture has been validated through the successful integration of 12 interconnected chiplets, marking an important step toward scaling higher-qubit systems. Customer momentum is also improving, supported by expanding availability across Amazon Braket, Microsoft Azure Quantum and qBraid, as well as an $8.4 million order from India's C-DAC. With $569 million in cash and no debt, Rigetti remains well-funded to execute its long-term roadmap.

Risks to ConsiderHowever, risks remain considerable. Revenues are still relatively small and heavily dependent on the timing of system deliveries and government contracts. The company remains unprofitable and must continue improving fidelities while proving that its chiplet-based approach can scale to commercially relevant, fault-tolerant systems with more than 1,000 qubits. Execution risks could also intensify as competition in the quantum computing industry heats up following Quantinuum's IPO.

IonQ's Quantum Platform and Demand Drive OptimismIonQ has emerged as one of the quantum industry's early commercialization leaders. In the first quarter of 2026, the company generated a record $64.7 million in revenues, up 755% year over year. Management also raised its 2026 revenue guidance to $260-$270 million, reflecting strong demand across its quantum computing platform.

Commercial momentum remains impressive. Remaining performance obligations surged 554% year over year to $470 million, providing strong revenue visibility. About 60% of first-quarter revenues came from commercial customers, while 35% originated from international markets. The company has also presold its first chip-based 256-qubit system and expects customer commissioning to begin in the second quarter of 2027. Its proposed SkyWater Technology acquisition is likely to further strengthen manufacturing capabilities and support long-term scaling ambitions.

Risks to ConsiderHowever, risks remain significant. IonQ continues to invest heavily in manufacturing expansion and next-generation system development, which could keep profitability under pressure. The company also faces execution risks in translating its growing backlog into sustainable earnings. Additionally, the stock's massive rally has elevated valuation expectations, potentially capping near-term upside.

2026 EstimatesRGTI expects to record earnings growth of 71.9% in 2026. Revenues are expected to increase 257.3% in 2026.

Image Source: Zacks Investment Research

IONQ expects record earnings growth of 42.9% in 2026. Revenues are projected to surge 101.9% in 2026.

Image Source: Zacks Investment Research

Short-Term Price Targets Favor Rigetti Over IonQBased on short-term price targets offered by 10 analysts, the average price target of RGTI of $31 represents an increase of 45.1% from the last closing price of $21.36.

Image Source: Zacks Investment Research

Based on short-term price targets offered by 11 analysts, the average price target of IONQ of $69.95 represents an increase of 23.7% from the last closing price of $56.55.

Image Source: Zacks Investment Research

Which Stock Offers Higher Upside Potential After Quantinuum's IPO?Both companies stand to benefit from the renewed investor interest generated by Quantinuum's public debut. Quantinuum's IPO is likely to act as a valuation reset for the sector, drawing additional institutional capital toward publicly traded quantum computing companies with credible technology road maps and commercialization strategies.

However, Rigetti appears better positioned for near-term upside in a post-Quantinuum environment. Although both stocks currently carry a Zacks Rank #4 (Sell), RGTI offers substantially higher analyst-implied upside potential, a sizeable cash position with no debt, and growing momentum around its chiplet-based architecture and system deployments.

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

Meanwhile, IonQ remains the sector's commercial leader and arguably possesses the strongest long-term platform strategy. However, its shares have already more than doubled since April, resulting in richer valuation multiples and potentially limiting additional gains in the near term.

Investors seeking exposure to the next phase of enthusiasm following Quantinuum's IPO may find Rigetti's risk-reward profile more attractive at current levels. Long-term investors may continue to monitor IonQ's commercialization progress closely, but after its extraordinary rally, RGTI appears to offer the better upside opportunity as the quantum sector enters its next chapter.

Key Takeaways QBTS signs $100M LOI under CHIPS Act, signaling U.S. Commerce Department interest in its quantum tech.The funding would back D-Wave's R&D facility in Florida, Connecticut and Canada to scale quantum systems.QBTS aims for 100,000-qubit annealing and 10,000-qubit gate-model systems for AI and chemistry. D-Wave Quantum (QBTS - Free Report) , or D-Wave, received a major boost last month that could advance its superconducting annealing and gate-model technology development. The company signed a Letter of Intent (“LOI”) for $100 million in proposed funding under the U.S. CHIPS and Science Act. The LOI signals federal interest in D-Wave’s annealing and gate-model quantum computing technologies and their potential economic impact. If the award is finalized, the company would issue $100 million in shares of its common stock to the U.S. Department of Commerce.

The funding is set to support D-Wave’s work at its forthcoming research and development (R&D) facility in Boca Raton, FL, as well as its R&D centers in New Haven, Connecticut and Burnaby, BC, Canada. Specifically, it aims to help speed up the delivery of advanced superconducting quantum computers, including a 100,000-qubit annealing system and a 10,000-qubit gate-model system.

While D-Wave’s annealing quantum computers are already commercial, its gate-model system is expected to reach commercial viability with 10,000 physical qubits, enabling 100 logical qubits.

With the larger-scale and higher coherence annealing quantum computing systems, the company expects stronger performance gains for solving computational problems in optimization, materials simulation, blockchain and artificial intelligence applications. The larger-scale dual-rail gate-model quantum computer will allow dozens of logical qubits, providing a robust application development platform for a broad range of quantum chemistry and quantum artificial intelligence use cases.

Taken together, these efforts are aimed at building a more resilient, end-to-end quantum computing ecosystem, in line with the CHIPS and Science Act objectives to build domestic capacity in critical technologies and establish a robust and reliable pipeline for the components required to bring state-of-the-art quantum computing systems into the market.

Latest Development From QBTS’ PeersIBM (IBM - Free Report) has announced an expanded collaboration with ServiceNow to address two of the biggest barriers blocking enterprise AI at scale: the AI-ready data problem and the legacy application layer. The partnership aims to combine IBM’s AI, data and automation capabilities with the ServiceNow AI Platform to help enterprises break through outdated systems and put their data to work for AI.

IonQ (IONQ - Free Report) announced Clavis XG Multiplex, a new addition to its Clavis XG Quantum Key Distribution (QKD) portfolio to make quantum security more practical and deployable across metropolitan fiber networks. The system enables high-performance, physics-based key distribution on a customer’s existing network infrastructure without requiring operators to redesign, isolate or dedicate optical networks for quantum security. IONQ also opened a new laboratory suite in Boulder, CO, which will house Quantum Computing R&D and semiconductor chip testing facilities.

QBTS’ Price Performance, Valuation & EstimatesYear to date, QBTS shares have plunged 11.5%, underperforming the industry’s 11.6% fall.

Image Source: Zacks Investment Research

D-Wave is trading at a forward, two-year, price/sales (P/S) of 132.67X, higher than its median and industry average.

Image Source: Zacks Investment Research

Here’s how estimates for D-Wave’s 2026 and 2027 loss per share are shaping up.

Image Source: Zacks Investment Research

D-Wave currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.