Key Takeaways Newmont secured key B.C. approvals for the Red Chris Block Cave Project and targets a late 2026 FID. The underground expansion will access deeper ore and extend the mine's life into the mid-2040s. Red Chris could add 1,800 construction jobs and increase Canada's annual copper output by 15%. Newmont Corporation (NEM - Free Report) has received key regulatory approvals from the Province of British Columbia for its Red Chris Block Cave Project, marking a major milestone in the planned transformation of the Red Chris Mine from an open-pit operation to a large-scale underground block-cave mine. The approvals move the project closer to a final investment decision (FID), which Newmont expects to make later this year.
The provincial approvals include an amended Environmental Assessment Certificate (EAC) and an amended Mines Act permit. The EAC amendment was secured through a consent-based process with the Tahltan Nation, highlighting the project's collaborative approach to Indigenous engagement and regulatory compliance.
The newly approved block-cave development will enable access to deeper ore bodies that cannot be economically mined through surface operations. The transition is expected to extend the mine's life into the mid-2040s.
The company is currently completing a Definitive Feasibility Study and a detailed capital cost estimate for the project. The development is expected to generate more than 1,800 construction jobs and support approximately 1,500 peak-season operating positions once in operation. The mine expansion could boost Canada's annual copper production by roughly 15%.
Red Chris is operated by Newmont, which holds a 70% interest in the joint venture, while Imperial Metals Corporation owns the remaining 30%. The project became part of Newmont's portfolio following its acquisition of Newcrest Mining in 2023.
Newmont said that the regulatory approvals represent an important step in the company's disciplined project-development process. It described the Red Chris Block Cave project as a compelling long-term growth opportunity and noted that the approvals position Newmont to advance toward a final investment decision later in 2026. NEM emphasized the strategic importance of the project for the company's future gold and copper production profile and highlighted the significance of the milestone achieved through collaboration with regulators and the Tahltan Nation.
Shares of NEM have rallied 75.3% in the past year compared with the industry’s 49.5% rise.
Image Source: Zacks Investment Research
NEM’s Zacks Rank & Other Key PicksNEM currently sports a Zacks Rank of #1 (Strong Buy).
Other top-ranked stocks in the Basic Materials space include Nucor Corporation (NUE - Free Report) , L.B. Foster Company (FSTR - Free Report) and Albemarle Corporation (ALB - Free Report) . NUE, FSTR and ALB carry a Zacks Rank of #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NUE’s current-year earnings stands at $15.68 per share, implying a 103.4% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the average surprise being 8.1%.
The Zacks Consensus Estimate for FSTR’s current-year earnings is pegged at $1.74 per share, implying a 152.2% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in one of the trailing four quarters and missed thrice, with the average surprise being 3.62%.
The Zacks Consensus Estimate for ALB’s current-year earnings is pegged at $12.39 per share, indicating a 1,668.4% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average surprise being 74.5%.
Chord Energy remains a Strong Buy, with robust financials, operational efficiencies, and a significant valuation disconnect even under conservative scenarios. CHRD's 2026 FCF guidance nearly doubled to ~$1.4B at $80 oil and lower gas, underscoring their significant undervaluation versus current levels. Leverage is very solid at ~0.4x, with disciplined capital returns while focusing on business health and investments.
The demolition of the iconic Macy’s billboard at Broadway and West 34th Street has been delayed as the department store and the owner of the billboard haggle over its future, The Post has learned.
As The Post exclusively reported, the four-story, red-and-white fixture was initially set to be destroyed the weekend of June 5.
“We are in discussions with Macy’s, no question about it,” said Ed Hart, chief executive of Kaufman Organization, which owns the building where the bag-shaped sign has been perched for more than 60 years.
The Macy’s shopping bag billboard has been on display for more than 60 years. Andriy Blokhin – stock.adobe.com Hart declined to go into detail on the talks, saying only, “There are a number of things in play.”
His firm erected scaffolding around the building – tucked into the cut-out corner of the Macy’s flagship – over the weekend of June 6. The scaffolding surrounds the Sunglass Hut store that has been in the retail space for decades.
Earlier this month, Macy’s acknowledged the imminent removal of the billboard.
“As the neighborhood continues to evolve, the current sign – while beloved – is outdated and will be removed as part of broader updates by the billboard owner to modernize the space,” the department store told The Post.
The company did not immediately comment about the delay.
Scaffolding was erected around the base of the sign on June 5. Jimin Kim/SOPA Images/Shutterstock The city’s Buildings Department said it has issued a permit to remove the old billboard, along with permits for two new signs to go up. The cost of removing the sign and putting a new one up will cost Kaufman $1.7 million, according to the documents.
A real estate executive described the situation as a “game of chicken” between Macy’s and Kaufman, which may have been caught off guard by the retailer’s public statement on the matter on June 5.
The billboard is of great importance to Macy’s.
The retailer sued Kaufman in 2021 when it believed that the real estate company was planning to splash an Amazon ad on the building after Macy’s lease for billboard space expired.
“To the naked eye, the billboard is on Macy’s department store and in its own right iconic,” the department store said in a complaint.
The Macy’s Herald Square flagship was built around a tiny building at the corner of Broadway and West 34th St. Getty Images The company argued that an agreement it signed with the building’s owner in 1963 prevents the landlord from leasing the billboard to a competitor – a prohibition that lasts “forever,” according to the lawsuit.
Kaufman argued that it was not bound by such a clause. But the companies appear to have settled the complaint, because the shopping bag remained on the building for the next five years.
Macy's has defied sector pessimism, delivering >100% stock gains in twelve months and reaching new multiyear highs after a strong Q1 beat-and-raise. I reiterate my buy rating, citing continued upside driven by resilient sales to higher-income consumers, operational rigor, and new growth avenues. M remains attractively valued at 11.4x FY26 P/E and 10.3x FY27 P/E, trading below peers like Kohl's despite stronger sales momentum.
Key Takeaways Macy's luxury banners drove growth, with Bloomingdale's up 10.2% and Bluemercury up 6.4%.Macy's digital sales reached 34% of net sales as stores and e-commerce worked together.Macy's is expanding AI tools and supply-chain automation to improve inventory and fulfillment. Macy's, Inc. (M - Free Report) is no longer just a department-store turnaround story. Its latest progress is tied to retail trends that could shape the business beyond one quarter.
Luxury demand, omnichannel selling, artificial intelligence tools and supply-chain upgrades are becoming more central to the company’s strategy. The question is whether these initiatives can improve execution enough to offset cost pressure and uneven discretionary demand.
Macy’s Luxury Mix Is Becoming More ImportantBloomingdale’s and Bluemercury are giving Macy’s a higher-quality mix as the core department-store channel remains less consistent. Bloomingdale’s posted 10.2% comparable sales growth in the first quarter of 2026 and recorded its highest first-quarter sales volume in 154 years.
Bluemercury added 6.4% comparable sales growth, led by makeup, dermatological skincare and fragrances. New and remodeled Bluemercury stores continued to outperform, giving Macy’s another premium banner that can support resilience when lower-income customers turn more selective.
Image Source: Zacks Investment Research
M Omnichannel Keeps Gaining ShareDigital sales represented 34% of net sales in the first quarter, up from 33% a year earlier. That matters because Macy’s go-forward model is built around stores and digital working together, rather than treating e-commerce as a separate channel.
Store initiatives are also reinforcing the online experience. Reimagine locations helped the Macy’s nameplate generate 1.6% comparable sales growth, while digital contributed to the positive comparable sales result. This makes omnichannel execution a structural part of the turnaround.
Macy’s AI Push Moves Into Daily RetailMacy’s AI efforts are focused on practical retail tasks. The company is using AI-related work in inventory forecasting and management, areas that can affect in-stock levels, replenishment and customer satisfaction.
Ask Macy’s, an AI-powered conversational shopping assistant, is another example. The tool is meant to support discovery across channels and reduce friction in the shopping journey, which is more useful than a broad technology claim without a clear customer purpose.
M Supply Chain Upgrades Could Add LeverageSupply-chain modernization is another part of the trend story. Macy’s China Grove distribution facility is ramping up, with automation delivering early benefits in service levels and cost efficiencies.
The company is also building additional capacity ahead of the holiday period. Better order flow and fulfillment can support the digital channel, improve customer experience and help control costs as the company continues investing in its go-forward store base.
Macy’s Trend Story Still Faces PressureThe trend case does not remove the financial constraints. Tariffs reduced first-quarter gross margin by about 30 basis points, and second-quarter guidance assumes tariffs and fuel costs will create a 20- to 40-basis-point gross margin headwind.
Consumer demand is another limit. Lower-income cohorts remain more choosy, while big-ticket home, especially furniture, was soft in the quarter. Amazon.com, Inc. (AMZN - Free Report) remains a key benchmark in digital convenience, while Walmart Inc. (WMT - Free Report) is a scale-driven omnichannel retailer that keeps pricing and fulfillment expectations high across retail.
What Macy’s Signals Say About the Trend TradeMacy’s has credible exposure to attractive retail themes, especially luxury, AI-enabled selling and omnichannel shopping. Still, these trends need to translate into durable sales growth and margin protection before the stock earns a stronger trend-driven case.
The stock currently carries a Zacks Rank #3 (Hold), which fits a balanced view rather than a high-conviction call. The Neutral stance reflects visible progress, but also recognizes pressure from tariffs, freight costs, consumer caution, competition and ongoing investment needs. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
No Style Scores are provided for Macy’s in the available setup. That limits the factor lens investors normally use to assess Value, Growth, Momentum and VGM Score, so the debate falls back to valuation, execution and earnings durability.
A Zacks Rank #3 can still be held when the business case remains intact, but the Style Scores framework generally favors stocks with stronger rank support and A or B scores. For Macy’s, the trend exposure is real, but investors still need evidence that these initiatives can compound through a tougher discretionary retail backdrop.
Key Takeaways Macy's posted 3% enterprise comparable sales growth, its strongest first quarter in four years.Reimagine stores reached 200 locations, driving engagement and 2.4% comparable sales growth.M faces tariff, fuel and inventory pressures even as luxury banners and digital sales grow. Macy's, Inc. (M - Free Report) is showing better execution as its Bold New Chapter strategy gains operating traction across stores, digital and luxury banners. The key issue for investors is whether these gains can hold against pressure from costs and uneven discretionary demand.
The latest results show progress, but not a clean break from risk. Macy’s still has to protect margins while reshaping its store base and funding growth initiatives.
Macy’s Strategy Starts Showing ResultsBold New Chapter is moving beyond planning and into measurable operating performance. In the first quarter of fiscal 2026, enterprise comparable sales increased 3%, marking Macy’s strongest first-quarter comparable sales performance in four years.
All three nameplates delivered positive growth, and management raised its 2026 outlook after net sales, comparable sales, adjusted EBITDA and adjusted earnings per share exceeded expectations. The bigger point is execution quality, not just stabilization. Better merchandising, service and store standards give the turnaround a firmer base.
M Reimagine Stores Lift Customer EngagementThe Reimagine initiative is becoming Macy’s most visible store-level playbook. Macy’s expanded the program by 75 locations in the first quarter, bringing the total to 200 stores.
These locations now represent nearly 60% of the go-forward Macy’s store fleet and accounted for about 75% of fiscal 2025 go-forward Macy’s store sales. Reimagine locations posted 2.4% comparable sales growth and have been positive in eight of the past nine quarters, while customer engagement benefited from record first-quarter Net Promoter Score results at the Macy’s nameplate.
Macy’s Luxury Banners Add StabilityBloomingdale’s and Bluemercury are improving Macy’s portfolio mix. Bloomingdale’s comparable sales rose 10.2% in the first quarter and reached the highest first-quarter sales volume in its 154-year history.
Bluemercury comparable sales increased 6.4%, supported by makeup, dermatological skincare and fragrances. The two banners help offset choppier trends at the core Macy’s banner and give the company exposure to customers and categories where differentiation matters.
M Digital and AI Expand Macy’s ReachDigital remains central to Macy’s omnichannel push. Digital sales represented 34% of net sales in the first quarter, up from 33% a year earlier.
The company is also using technology in practical ways. The China Grove distribution facility is showing early automation benefits in service levels and cost efficiency, while inventory forecasting tools and Ask Macy’s, an AI-powered shopping assistant, are designed to reduce friction and support conversion.
How Macy’s Risks Could Slow ProgressCost pressure remains the biggest constraint. Tariffs reduced gross margin by about 30 basis points in the first quarter, while second-quarter guidance assumes tariffs and fuel costs will cut gross margin by 20-40 basis points and adjusted earnings per share by 3-4 cents.
Store closures also weigh on reported sales. The 14 non-go-forward stores closed at the end of fiscal 2025 reduced first-quarter sales by about $40 million, and fiscal 2025 closures are expected to create a $145-million annual sales headwind. Inventory rose 3.6% to $4.8 billion, adding markdown risk if demand weakens. Competition from Kohl's Corporation (KSS - Free Report) and Target Corporation (TGT - Free Report) reinforces the need for Macy’s to sharpen value, service and omnichannel execution.
Image Source: Zacks Investment Research
What Macy’s Signals Mean for InvestorsMacy’s turnaround signals are improving, but the investment case still calls for balance. Comparable sales growth, luxury momentum and Reimagine traction support a more constructive view of the business.
M currently carries a Zacks Rank #3 (Hold), which fits a measured stance. The Rank points to a stock that may be appropriate to hold while investors monitor estimate trends, margin protection and execution consistency. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
No Value Score, Growth Score, Momentum Score or VGM Score is provided for Macy’s. That leaves investors leaning more heavily on the operating trade-offs: better store and luxury execution on one side, and tariffs, freight, inventory and discretionary-demand risks on the other.
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What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
#1 (Strong Buy) stocks have produced an unmatched +24% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Gap (GAP - Free Report) The Gap, Inc. is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. It offers products for men, women, and children under the Old Navy, Gap, Banana Republic and Athleta brands. Moreover, the company’s products include denim, tees, button-downs, khakis, and other trendy assortments as well as fitness and lifestyle products for training, sports, travel, yoga and other activities. Notably, the company offers its products through company-operated stores, franchise stores, websites, third-party arrangements, as well as catalogs. As of May 2, 2026, Gap had around 3,500 store locations in 35 countries, of which 2,477 were company-operated.
GAP is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 9.31; value investors should take notice.
For fiscal 2027, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.03 to $2.33 per share. GAP boasts an average earnings surprise of +2%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, GAP should be on investors' short list.
On June 17, 2026, Gap Inc GAP shares fell 3.6% today, bringing the current price to $20.94. The stock has experienced a 52-week range between $18.69 and $29.36, indicating significant volatility over the past year.
GF Value™ verdict: The current price is $20.94, which is 7.0% below the GF Value™ of $22.52.GF Score™: 71/100, indicating above-average performance relative to peers.Most notable signal: Insiders sold $22.5 million worth of shares in the last three months without any buying activity. Is GAP Overvalued or Undervalued? Gap Inc GAP currently trades at $20.94, which is below its GF Value™ estimate of $22.52, suggesting that the stock is undervalued by approximately 7.0%. This margin of safety may present a potential opportunity for investors looking for stocks that could appreciate in value. The GF Valuation label indicates that the stock is fairly valued, which means that while there is a slight undervaluation, it is important to consider the broader context of the company's financial health and market conditions. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
However, investors should be cautious, as the company's financial strength scores 6/10, indicating that while the valuation appears attractive, there could be underlying risks that warrant further investigation. A thorough analysis of the company’s financial statements, competitive position, and market environment is essential before making any decisions based on valuation alone.
How Does GAP's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 8.2x 12.5x Forward P/E 8.8x N/A Gap Inc's current P/E ratio of 8.2x is significantly below its 5-year median P/E of 12.5x, indicating that the stock is trading at a discount compared to its historical valuation. This P/E analysis agrees with the GF Value™ verdict that suggests the stock is undervalued. The forward P/E of 8.8x also reaffirms that the market may not fully account for the company's earnings potential in the near future.
What Does GAP's GF Score™ Tell Us? Metric Rating GF Score™ 71 Financial Strength 6/10 Profitability 6/10 Growth 3/10 Valuation 9/10 Momentum 5/10 The GF Score™ of 71/100 indicates that Gap Inc is performing above average relative to its peers. The strongest area is the Valuation rank, scoring 9/10, which aligns with the undervaluation indicated by the GF Value™. However, the Growth rank of 3/10 suggests that the company may face challenges in expanding its earnings and revenue in the future. A balance of strong valuation metrics with weaknesses in growth underscores the need for cautious optimism regarding the stock's potential performance.
What Are Insiders Doing with GAP Stock? Recent insider activity has seen a significant sell-off, with insiders selling $22.5 million in shares over the past three months. This lack of buying activity from insiders may signal a lack of confidence in the company’s near-term prospects or a strategic move to realize profits. Such patterns can often indicate that insiders might not anticipate significant price increases in the short term, which can be a red flag for potential investors.
While insider selling does not inherently indicate a negative outlook, it is crucial for investors to be aware of these trends as they may influence market sentiment around the stock.
What This Means for Investors Based on the GF Value™ assessment, Gap Inc GAP is currently undervalued with its shares trading below intrinsic value. However, potential investors should consider the broader context, including financial strength and insider activity, before making any commitments. The valuation appears attractive, but caution is advised due to the uncertainties surrounding growth and insider sentiment.
For the complete analysis, visit the Gap Inc GAP stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is GAP's GF Score™?
GAP's GF Score™ is 71/100, indicating above-average performance relative to its peers in the market.
Is GAP overvalued or undervalued?
GAP is currently undervalued, with a GF Value™ of $22.52 compared to its trading price of $20.94.
What is GAP's P/E ratio?
GAP's P/E ratio is 8.2x, which is significantly below its historical median of 12.5x, suggesting that the stock is trading at a discount compared to its historical valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
, /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of The Gap Inc. ("Gap" or the "Company") (NYSE: GAP). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.
The investigation concerns whether Gap and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
[Click here for information about joining the class action]
On May 28, 2026, Gap reported its financial results for the first quarter of 2026, including revenue of $3.5 billion, which represented an increase of only 1% year-over-year and fell short of analyst expectations. The results fell short across key segments, including Old Navy and Athleta, and prompted management to cut 2026 full-year net sales guidance.
On this news, Gap's stock price fell $3.85 per share, or 15.4%, to close at $21.15 per share on May 29, 2026.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
Attorney advertising. Prior results do not guarantee similar outcomes.
Key Takeaways Gap delivered its ninth straight quarter of positive comps, led by a 10% gain at the namesake brand.Denim, women's and men's apparel drove growth, while kids and baby returned to positive sales momentum.Campaigns and collaborations boosted cultural relevance as Gap targets high-single-digit comps in FY26. Gap Inc. (GAP - Free Report) continues to demonstrate that its multiyear turnaround strategy is gaining traction. The apparel retailer delivered its ninth consecutive quarter of positive comparable sales growth in the first quarter of fiscal 2026, highlighting the effectiveness of its brand reinvigoration efforts. By combining product innovation, culturally relevant marketing and disciplined execution, Gap has transformed itself from a struggling apparel chain into one of the stronger performers in the specialty retail space. The latest results suggest that the company is not only sustaining momentum but also broadening its appeal across categories and customer segments.
The namesake Gap brand was the standout performer in the quarter, with comparable sales rising 10% on top of a 5% increase in the year-ago period. Net sales climbed 10% year over year to $796 million, marking another quarter of robust growth. Management noted strength across women's apparel and men's categories, while the kids and baby business returned to growth. Denim remained a key growth engine, helping the brand gain additional market share. Gap also expanded its customer file and achieved its third consecutive quarter of reduced discounting, underscoring stronger demand and improved pricing discipline.
Beyond the numbers, Gap's turnaround is increasingly being fueled by brand relevance and cultural engagement. Collaborations with Victoria Beckham, Harlem's Fashion Row and Awake New York, along with high-profile activations at Coachella and the Met Gala, helped strengthen the brand's connection with younger consumers. The company's "Get Loose" campaign featuring Grammy-nominated artist Young Miko generated nearly 1.5 billion media impressions, while its Coachella activation created more than 300 million social and press impressions. These initiatives are reinforcing Gap's position at the intersection of fashion, music and culture, a strategy management believes can drive sustainable long-term growth.
Looking ahead, management remains optimistic about Gap's trajectory. The company expects the brand to deliver high-single-digit comparable sales growth for fiscal 2026, supported by continued strength in denim, expanded product categories, store remodels and the relaunch of its iconic fragrance business. While macroeconomic uncertainties and competitive pressures remain, Gap's consistent sales growth, expanding customer base and improving merchandise margins indicate that the turnaround story still has room to run. The key question for investors is whether the brand can maintain its cultural relevance and operational discipline as it scales this momentum through the remainder of the year.
GAP’s Price Performance, Valuation & EstimatesShares of this Zacks Rank #3 (Hold) company have lost 19.8% in the past six months compared with the industry’s decline of 5.3%.
Image Source: Zacks Investment Research
From a valuation standpoint, GAP trades at a forward price-to-earnings ratio of 8.68X compared with the industry’s average of 15.38X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for GAP’s current fiscal-year sales and earnings implies year-over-year growth of 1.6% and 9.4%, respectively. For the next fiscal year, the consensus estimate indicates a 1.9% rise in sales and 11.3% growth in earnings. The company’s EPS estimate for both fiscal years has remained stable in the past seven days.
Image Source: Zacks Investment Research
Key PicksRoss Stores (ROST - Free Report) , a leading U.S. off-price retailer operating Ross Dress for Less and dd's DISCOUNTS stores, sports a Zacks Rank #1 (Strong Buy) at present. ROST delivered a trailing four-quarter earnings surprise of 10.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Ross Stores’ current fiscal-year sales and earnings suggests growth of 9.1% and 17.1%, respectively, from the year-ago figures.
Five Below, Inc. (FIVE - Free Report) , which operates as a specialty value retailer, currently flaunts a Zacks Rank #1. FIVE delivered a trailing four-quarter earnings surprise of 70.1%, on average.
The Zacks Consensus Estimate for Five Below’s current fiscal-year sales and earnings suggests growth of 14.36% and 31.7%, respectively, from the year-ago figures.
Tapestry, Inc. (TPR - Free Report) provides accessories and lifestyle brand products in North America, Greater China, the rest of Asia and internationally. At present, TPR sports a Zacks Rank of 1.
The Zacks Consensus Estimate for current fiscal-year sales and earnings implies growth of 13.8% and 36.3%, respectively, from the year-ago reported figures. TPR has delivered a trailing four-quarter earnings surprise of 15.6%, on average.
NEW YORK, June 23, 2026 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of The Gap Inc. (“Gap” or the “Company”) (NYSE: GAP). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.
The investigation concerns whether Gap and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
[Click here for information about joining the class action]
On May 28, 2026, Gap reported its financial results for the first quarter of 2026, including revenue of $3.5 billion, which represented an increase of only 1% year-over-year and fell short of analyst expectations. The results fell short across key segments, including Old Navy and Athleta, and prompted management to cut 2026 full-year net sales guidance.
On this news, Gap’s stock price fell $3.85 per share, or 15.4%, to close at $21.15 per share on May 29, 2026.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
Attorney advertising. Prior results do not guarantee similar outcomes.
American Eagle Outfitters Inc. NYSE: AEO has posted consecutive earnings beats. Yet even after delivering another better-than-expected quarter on May 28, shares sold off as concerns about weakness in the core American Eagle brand and pressure on second-quarter gross margin overshadowed stellar performance at Aerie.
Since then, the stock has recovered its losses. Where shares head next is likely to depend on Aerie's ability to maintain its momentum after posting 25% comparable sales growth, whether the American Eagle brand can regain its footing, and how much pressure tariffs and other costs ultimately place on margins.
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Aerie's Strength Helps Offset American Eagle's WeaknessAmerican Eagle reported first-quarter earnings of 14 cents per share, a sharp improvement from the 29-cent-per-share loss reported a year earlier. Earnings exceeded Wall Street estimates by 3 cents. Revenue rose nearly 10% from the prior-year period to $1.2 billion, topping expectations by more than $10 million. The results marked the company's fourth consecutive quarter of earnings and revenue beats.
Total comparable sales increased 8%. Gross margin expanded 860 basis points to 38.2%, while merchandise margin improved 710 basis points. The results benefited from an inventory write-down recorded in the prior-year quarter, which weighed on margins.
Aerie and its activewear-focused OFFLINE brand were the company's standout performers. Revenue for the brands increased 34% year over year to $481 million.
On the earnings call, CEO Jay Schottenstein said he was "extremely pleased" with the continued momentum at Aerie and OFFLINE, citing strong demand across categories and channels, compelling product offerings, high customer engagement, and growing brand awareness.
The flagship American Eagle brand faced challenges during the quarter. Revenue and comparable sales each declined about 2% from a year earlier to roughly $697 million. Results across categories were mixed, with the men's business delivering its third consecutive quarter of positive performance while certain areas of the women's business, including bottoms and seasonal categories, remained under pressure.
The company said it has already begun refining its product assortment ahead of the important back-to-school season.
Second-Quarter Gross Margin Faces PressureAmerican Eagle also provided guidance calling for second-quarter operating income of between $45 million and $50 million, and comparable sales growth in the mid- to high-single digits. Gross margin is projected to decline from the previous year as the company faces a 150- to 200-basis-point tariff headwind, as well as markdown pressure at the American Eagle brand.
Momentum at Aerie and OFFLINE is expected to continue in Q2, with comparable sales growth in the high teens to low twenties. On the flip side, the American Eagle brand is expected to remain under pressure, with comparable sales ranging from flat to down low single digits. Schottenstein did note, however, “While May started slowly for the AE brand, we're encouraged by the improvement in the business that we have seen over the last few weeks.”
For the full year, the retailer expects operating income of $390 million to $410 million, supported by mid-single-digit comparable sales growth. Gross margin is expected to increase year over year.
Multiple Analysts Lower Price Targets Following Q1 ReportDespite notching another earnings and revenue beat, investors appeared focused on the challenges facing the American Eagle brand and the expected decline in second-quarter gross margin.
At least six analysts lowered their price targets following the report. The stock currently carries a consensus Hold rating and a 12-month price target of $20.36. Price targets range from a low of $16 to a high of $31.
The average price target has declined steadily since early January, when it stood above $28. Even so, it remains well above the sub-$10 consensus target seen a year ago.
AEO's 2026 Pull Back Follows Major RallyThe Q1 report and the wave of analyst price-target cuts that followed sent the stock down roughly 12%, extending an already difficult stretch for shareholders. Year to date, shares are down by over 30%.
However, the recent weakness follows a powerful rally in the second half of 2025. Helped by a string of positive earnings reports, shares climbed from a 52-week low of less than $10 in July to a 52-week high above $28 in early January. Despite the pullback over the last several months, the stock remains up around 77% over the past year.
American Eagle Outfitters, Inc. (AEO) Price Chart for Wednesday, June, 24, 2026
The pullback has also made the stock's valuation more attractive. American Eagle Outfitters' price-to-earnings ratio sits around 11x, well below the retail industry average of 16.3x. However, the stock is not the cheapest among some of its peers. Abercrombie & Fitch Co. NYSE: ANF trades at roughly 8.3x earnings, while The Gap Inc. NYSE: GAP trades at about 8.5x.
While shares of American Eagle have recovered from their post-earnings decline, investors are still weighing the strength of Aerie against ongoing challenges at the American Eagle brand. In the upcoming quarters, attention is likely to remain focused on whether Aerie's momentum can continue, whether the American Eagle brand can regain its footing, and how much pressure tariffs, markdowns, and other costs ultimately place on margins.
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This should be a quieter week than usual on the earnings front. It's just that time of the quarter. However, one company with a fiscal year ending in November is Carnival Corp. (CCL 4.69%). The country's largest cruise line -- by revenue and passenger volume, but not by market cap -- reports its fiscal second-quarter results on Tuesday morning.
There is a lot going on with the wave-riding bellwether. An impressive winning streak, a critical guidance update, and a potential shift in market leadership to monitor are at stake as Carnival pulls into port. Let's take a look at some of the questions that investors will want answered this week.
Image source: Getty Images.
1. Can the bottom-line beats keep coming? The cruising market has staged one of the most remarkable recoveries in the history of travel. An industry that was essentially shut down for more than a year following the COVID-19 crisis has more than recovered. Cruise lines are generating more in trailing revenue and earnings than they ever have right now.
Turning to the bottom line, analysts are still trying to catch up to the recovery. Carnival's stock has a pretty jaw-dropping winning streak when it comes to landing ahead of analyst profit targets. Just size up how Carnival has fared in its last 11 quarterly earnings reports.
Topping expectations by at least 9% for almost three years should grab your attention. Expectations are low this time around, as rising fuel prices weigh on margins. Wall Street's modeling a profit of $0.34 a share in net income for the fiscal quarter that ended in May, down from the $0.35 a share it posted a year earlier. Can Carnival stretch that string of beats to an even dozen? The market will find out on Tuesday morning.
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2. Can guidance continue to impress? The last few years have been strong. Demand for Carnival sailings has been resilient. However, something problematic happened the last time that one of the country's leading ocean cruise line operators stepped up with fresh financials.
Norwegian Cruise Line (NCLH +1.75%) stumbled. Last month's financial update for the third-largest player in the market, which Carnival leads, began to take on water. Norwegian delivered mixed results for its fiscal first quarter. It was an earnings beat, but it did fall short on the top line.
Guidance was the real dagger. With fuel costs rising and the war in Iran heightening at the time, softening demand in a climate of spiking operating costs was a one-two punch. Norwegian would go on to dramatically hose down its full-year adjusted earnings guidance despite the quarterly beat. It also warned that net yields -- a widely watched metric for the cruising industry that measures net revenue per available passenger cruise day after backing out select variable items -- would be negative. The industry's net yields were positive before.
Carnival's report will matter. Guidance will be even more important. If Carnival can keep its outlook for net yields positive (in more ways than one), it will pass this critical test that sank one of its competitors in May.
3. Can Carnival retain its newfound market leadership? I mentioned earlier that Carnival was not the largest among its peers by market capitalization. It may be the top dog in terms of revenue, fleet size, and passenger volume, but Royal Caribbean (RCL +0.26%) is the one wearing the market cap and enterprise value crowns.
Royal Caribbean has historically grown faster than Carnival and Norwegian. It has also commanded healthier profit margins, outperforming its rivals in returning to profitability and reinstating its dividend after the pandemic. Carnival is now also very profitable and has resumed its quarterly payouts.
Royal Caribbean has also historically outperformed the larger Carnival and the smaller Norwegian in terms of stock performance, but check out the chart above. Carnival's 30% jump over the past year is more than double Royal Caribbean's return. A strong report by Carnival on Tuesday morning -- and the subsequent earnings call that will kick off a half hour into the trading day -- can keep it on top.
Carnival, Primoris Services And 3 Stocks To Watch Heading Into TuesdayWith U.S. stock futures trading lower this morning on Tuesday, some of the stocks that may grab investor focus today are as follows:
Check out our premarket coverage here
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1. Futures Sink as Tech Stocks Hit Nasdaq futures fell around 2%, with S&P 500 futures dropping over 1%, as the fall in megacap tech stocks on Monday continues to weigh on investor sentiment. The spillover caused the South Korean Kospi index to fall 10% in Asia, which has heavy exposure to chip names including SK Hynix and Samsung.
"Many investors are sitting on large gains with their AI stocks, and any jitters could lead them to cut their position to lock in the gain": Jian Shi Cortesi, a fund manager at Gam Investment Management, also pointed to the hawkish Federal Reserve meeting last week as another reason why stocks are sensitive. Higher interest rates typically are negative for the stock market due to higher debt financing costs. Global investor sentiment on edge: Concern over two high-profile departures from Alphabet (GOOG 0.61%) to rivals saw the stock close 5% lower, with SpaceX (SPCX +1.61%) ending Monday down 16% – for a third straight day of losses – after announcing it would turn to the bond market to raise capital. 2. Qualcomm Chases Nvidia with Modular Deal Bloomberg reports Qualcomm (QCOM 8.01%) is in advanced talks to buy AI chip start-up Modular, in a deal worth around $4 billion, as it tries to enhance its offering to compete better with Nvidia (NVDA 3.99%).
Modular's unified infrastructure makes it an appealing purchase: Founded by two former Apple (AAPL 0.73%) and Alphabet engineers, Modular's platform provides a bridge between software and underlying chip hardware. Qualcomm diversifies and goes after Nvidia's software monopoly: Down about 5% in pre-market trading, Qualcomm continues to push away from traditional handset reliance, as well as targeting Nvidia's dominance by its current software ecosystem which ties developers into using Nvidia hardware.
3. Micron and IBM Announce AI Partnerships
Micron (MU 13.08%) announced a new agreement with Anthropic, while IBM (IBM +4.94%) revealed an OpenAI partnership, as companies continue to seek closer ties with major AI players to leverage their abilities.
Micron's deal includes a strategic investment in Anthropic's latest funding round: Though the stock is down around 8% in early trade, the agreement is seen to be mutually beneficial as Micron continues to expand use of Claude models internally, with Anthropic getting more access to memory and storage products. With the continued shortage of memory and high demand, last week Fool contributing analyst Jon Quast said "it's hard for me to call Micron overvalued when there's such a disparity" and "Micron can probably put up some really good numbers." "The OpenAI Daybreak Cyber Partner Program expands our access to a broader set of advanced AI capabilities": Mark Hughes, a global managing partner at IBM, pointed to benefits for end-user clients as it looks to integrate AI enterprise security products. The Hidden Gems recommendation rose around 3% ahead of the opening bell. 4. Next Up: CCL, CBRS, and FDX Earnings Carnival Corp (CCL 4.69%) posts earnings ahead of the market open, with a 6% rise in revenue versus last year expected thanks to higher passenger volume and enhanced ticket pricing. This builds on last quarter's impressive numbers. Cerebras (CBRS +1.40%) is set to publish its first set of results since the AI chip company went public back in April following the closing bell. Investors will be watching for signs it can convert its $24.6 billion order backlog into revenue. FedEx (FDX 2.90%) releases results after the market closes. The Stock Advisor rec by Team Rule Breakers is expected to show a modest 2.6% fall in earnings but an 8.8% rise in revenue, with guidance for the full year in focus after last quarter. 5. Today's Take: Where AI Will Actually Make Change
Fields ranging from robot-assisted surgery and automated defense manufacturing to logistics networks and precision agriculture are already capturing meaningful value from AI transformation.-- Rachel Warren Team Hidden Gems
Banks and insurance companies will use it to better mitigate risk. Cybersecurity companies will partner with AI companies to protect our information, particularly as we make the leap into quantum computing in the coming years.-- Jason Moser Team Rule Breakers
6. Your Take In a single word, how are you feeling about the tech sell-off – for example, anxious, opportunistic, calm, frustrated, excited? Share your adjective and elaborate on what's driving it. Bonus: is that feeling translating into any action, or are you holding steady?
Share with friends and family, or become a member to hear what your fellow Fools are saying!
This image and article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, International Business Machines, Micron Technology, Nvidia, and Qualcomm. The Motley Fool recommends Carnival Corp. and FedEx. The Motley Fool has a disclosure policy.
As talks for a resolution to the conflict in Iran continue, crude oil prices hit a three-month low, and prices at the pump are now averaging less than $4 per gallon. Optimism and hope are driving down fuel costs, and record-breaking demand for cruise vacations is all creating favorable conditions for the red-hot Carnival Corp. (CCL 4.69%). So is the cruise line still a strong buy for investors?
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There are few companies more fuel-dependent than Carnival. The decline in oil prices turns what's been a short-term headwind into a tailwind for the second half of the year. Management expects fuel prices to continue falling through the remainder of 2026.
The cost of oil is just a part of the story, though, as Carnival's fundamentals are already strong. Bookings and prices are both at record highs. Last quarter, Carnival raised its full-year outlook. Customer deposits in the first quarter reached a record of nearly $8 billion, a 10% increase from the prior year's high. The stock is up 24% in the past month.
Image source: Getty Images.
The bull case for investors is compelling. The cruise industry has made a remarkable comeback since the early days of the pandemic, and cruising has truly returned as a trendy form of travel. Demand is steep, and Carnival's management recently launched a $2.5 billion buyback to reward shareholders.
If oil continues to fall, momentum will remain on Carnival's side. Less expensive fuel will make good fundamentals look great. However, even if the Iran conflict is prolonged and talks remain fluid and uncertain, Carnival still has plenty of bullish momentum. The stock's forward and trailing P/E ratios are around 13, and the analyst consensus is $35 per share, so Carnival is still priced fairly even after the recent increase.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.
Carnival (CCL) beat on EPS but missed on sales and guidance expectations in earnings. Sam Vadas outlines what the report signifies for the greater cruise line industry.
Carnival CCL shares are down following their Q2 earnings report. Investors are shifting focus from a solid earnings per share (EPS) beat to a less favorable outlook for future earnings, especially after a 16% stock rally since June 10. The company reported an adjusted EPS of $0.41, exceeding the $0.34 consensus, while revenue reached $6.66 billion, slightly below the $6.69 billion expectation. This situation has sparked discussions about earnings quality and guidance rather than a clear top-line victory.
Demand Quality: The demand landscape remains robust, with pricing and bookings buoyed by limited inventory, historically high booked prices, strong last-minute demand, and continued growth in both ticket revenue and onboard spending. Pricing and Yields: Record net yields are a key positive indicator, demonstrating that CCL is effectively translating strong cruise demand into improved revenue per available lower berth day, despite modest capacity growth. Fuel Drag: The main challenge lies in earnings translation, as operational gains are being offset by significant fuel costs. Management has indicated that a 10% increase in fuel costs could impact the bottom line by approximately $160 million, or $0.11 per share. Regional Mix: Market conditions vary, with Alaska and the Caribbean showing strength, while Europe presents a mixed picture, particularly between the Eastern and Western Mediterranean and Northern Europe. Capital Allocation: CCL’s PROPEL framework, a $2.5 billion buyback authorization, and a commitment to return over 40% of cash from operations to shareholders by 2029, along with a target of 2.75x net debt/EBITDA, provide important long-term support but fall short of alleviating near-term EPS concerns. The main takeaway for investors is a shift in focus from cruise demand to CCL's ability to convert that demand into higher earnings amidst rising fuel costs. While the company has established credibility with consistent pricing, booking momentum, and improving profitability, the recent report did not deliver a clear beat-and-raise outcome. Instead, it highlighted mixed signals: operational performance remains strong, but external fuel pressures are significantly impacting potential earnings growth. After a 16% pre-report rally, expectations had already risen. Factors that could enhance sentiment include sustained booking strength, stable summer pricing, increased onboard spending, and easing fuel cost assumptions. Conversely, signs of weakening demand, increased discounting in Europe, or lowered earnings projections could negatively affect sentiment.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Carnival (CCL - Free Report) came out with quarterly earnings of $0.41 per share, beating the Zacks Consensus Estimate of $0.35 per share. This compares to earnings of $0.35 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +18.84%. A quarter ago, it was expected that this cruise operator would post earnings of $0.18 per share when it actually produced earnings of $0.2, delivering a surprise of +11.11%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Carnival, which belongs to the Zacks Leisure and Recreation Services industry, posted revenues of $6.66 billion for the quarter ended May 2026, surpassing the Zacks Consensus Estimate by 0.33%. This compares to year-ago revenues of $6.33 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Carnival shares have lost about 1.2% since the beginning of the year versus the S&P 500's gain of 9.2%.
What's Next for Carnival?While Carnival has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Carnival was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.42 on $8.5 billion in revenues for the coming quarter and $2.22 on $27.84 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Leisure and Recreation Services is currently in the bottom 23% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Travel + Leisure Co. (TNL - Free Report) , another stock in the same industry, has yet to report results for the quarter ended June 2026.
This company is expected to post quarterly earnings of $1.91 per share in its upcoming report, which represents a year-over-year change of +15.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Travel + Leisure Co.'s revenues are expected to be $1.05 billion, up 3% from the year-ago quarter.
Carnival Corp (NYSE:CCL) shares fell almost 6% on Tuesday after the cruise operator issued a third quarter profit outlook below Wall Street expectations, overshadowing stronger-than-expected second-quarter results and record revenue.
The company reported adjusted earnings of $0.41 per share for the quarter ended May 31, ahead of analysts' estimates of $0.33 per share.
Revenue rose to a record $6.7 billion, slightly above the consensus forecast of $6.68 billion.
Net income attributable to Carnival reached $537 million, while adjusted net income climbed more than 20% year over year to a record $569 million. Adjusted EBITDA also hit a record $1.6 billion.
Carnival said customer deposits reached an all-time high of $9 billion, up more than $450 million from the previous year's record, while bookings for the remainder of 2026 remain ahead of last year at historically high prices.
For the third quarter, Carnival expects adjusted earnings of $1.35 per share, below analysts' expectations of $1.42. The company projected full-year 2026 adjusted earnings of $2.22 per share, also below the consensus $2.23.
Carnival CEO Josh Weinstein said the company delivered its "twelfth consecutive quarter of record net yields" despite "extreme geopolitical headwinds and nearly 30% higher fuel costs."
The company said booking trends for Mediterranean itineraries were affected by the prolonged conflict in the Middle East, prompting it to prioritize pricing over occupancy. Carnival noted that it is 93% booked for 2026, with less inventory remaining for sale than at the same point last year.
Weinstein said recent booking trends indicate the company is beginning to see "a reversal of these headwinds," adding that demand for 2027 and beyond continues to run ahead of prior-year levels.
For 2026, Carnival expects net yields to increase about 3.2% from 2025 levels and adjusted cruise costs excluding fuel per available lower berth day to rise approximately 3.7%. The company said elevated logistics costs linked to disruptions from the Middle East conflict are incorporated into its outlook.
For the quarter ended May 2026, Carnival (CCL - Free Report) reported revenue of $6.66 billion, up 5.3% over the same period last year. EPS came in at $0.41, compared to $0.35 in the year-ago quarter.
The reported revenue compares to the Zacks Consensus Estimate of $6.64 billion, representing a surprise of +0.33%. The company delivered an EPS surprise of +18.84%, with the consensus EPS estimate being $0.35.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Carnival performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
ALBDs (Available lower berth days): 24.7 million versus the five-analyst average estimate of 24.69 million.Occupancy percentage: 104% compared to the 104.3% average estimate based on five analysts.Passenger cruise days (PCDs): 25.7 million versus the four-analyst average estimate of 25.74 million.Fuel cost per metric ton consumed (excluding emission allowances): $793.00 compared to the $852.67 average estimate based on three analysts.Net yields (per ALBD): $208.69 versus the three-analyst average estimate of $208.26.Fuel consumption in metric tons: 700.00 Kmt versus 706.65 Kmt estimated by two analysts on average.Fuel consumption in metric tons per thousand ALBDs: 28.20 Kmt versus the two-analyst average estimate of 28.71 Kmt.Revenues- Onboard and other: $2.39 billion compared to the $2.39 billion average estimate based on five analysts. The reported number represents a change of +7.5% year over year.Revenues- Passenger ticket: $4.27 billion compared to the $4.26 billion average estimate based on five analysts. The reported number represents a change of +4.1% year over year.View all Key Company Metrics for Carnival here>>>
Shares of Carnival have returned +16.2% over the past month versus the Zacks S&P 500 composite's +0.1% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
Carnival Corporation Ltd. remains undervalued, trading at a 13% discount to the sector median despite strong top and bottom-line growth. CCL benefits from robust global cruise tourism tailwinds, with the market expected to more than double by 2034, supporting long-term demand. CCL's fundamentals outpace peers, posting 6% revenue and 47% EPS growth over the past year, yet valuation lags competitors like RCL and RRR.
Carnival (NYSE:CCL | CCL Price Prediction) stock is under pressure today, falling 6% to $28.41 as investors react to its latest quarterly earnings report. The move stands out against a relatively stable backdrop for peers, with Royal Caribbean (NYSE:RCL) stock down 1% to $306 and Norwegian Cruise Line (NYSE:NCLH) stock up half a percentage point to $20.14.
The mixed trading action across CCL, RCL, and NCLH suggests investors are taking a highly selective approach after earnings season updates. Even though all three companies operate in the same industry, the market response highlights clear differences in perceived execution and forward guidance.
At the same time, the cruise-line sector continues to show underlying demand strength in key metrics such as revenue growth and pricing power. However, guidance signals and cost pressures appear to be playing a larger role in shaping near-term sentiment across Carnival and its peers.
Carnival’s Guidance Overshadows Earnings Beat Carnival stock is getting hit hard today even after the cruise-line operator reported results that included an earnings beat. The company posted record revenue of $6.7 billion and adjusted earnings per share of $0.41, reinforcing that demand for cruises remains resilient.
However, CCL stock is reacting more strongly to the company’s weaker-than-expected outlook for the next quarter. Investors sometimes place greater weight on forward guidance than on past performance, particularly when valuation expectations are elevated.
Furthermore, Carnival faces pressure from rising scrutiny around fuel costs and profitability normalization. Even strong top-line results may not fully offset concerns when guidance signals a slower trajectory ahead.
Royal Caribbean Stock Holds Up on Strong Profitability At the same time, Royal Caribbean stock is showing relative strength, slipping only 1% despite broader sector volatility. The company reported net income of $950 million and adjusted earnings per share of $3.60, reinforcing its position as one of the stronger operators in the cruise industry.
Royal Caribbean stock continues to benefit from a perception of operational efficiency and stronger pricing power compared with peers. That positioning may help explain why RCL isn’t reacting as sharply to sector-wide concerns.
However, Royal Caribbean isn’t entirely immune to headwinds, as rising fuel costs and cautious broker commentary suggest potential pressure on margins ahead. Even so, Royal Caribbean remains comparatively stable as investors weigh its earnings strength against macroeconomic uncertainty.
Norwegian Gives Mixed Signals Norwegian Cruise Line stock is slightly higher today despite a mixed earnings report. The company generated $2.33 billion in revenue, reflecting 10% year-over-year growth, although results came in below expectations.
Moreover, Norwegian Cruise Line reported an earnings beat, but the company lowered its full-year EBITDA guidance, which adds a layer of caution to the outlook. That combination of stronger current performance and softer forward expectations is shaping a split investor reaction.
Norwegian is also navigating ongoing cost pressures, particularly from fuel expenses, even as some geopolitical risks appear to be easing. That mix of improving demand conditions and cautious guidance helps explain the relatively muted price action compared with Carnival stock.
What to Watch Next for Cruise Stocks Carnival, Royal Caribbean, and Norwegian are now entering a phase where forward guidance may matter more than headline earnings beats. Investors can focus on whether management teams signal continued pricing strength into the next quarter.
Carnival stock in particular may remain sensitive to any updates around cost management and revenue visibility. Royal Caribbean stock and Norwegian stock may also be influenced by how effectively each company manages fuel costs and operational efficiency.
On the other hand, the broader cruise demand environment still appears supportive based on recent revenue trends across the sector. Investors may consider whether current pullbacks in Carnival stock create more attractive entry points or whether caution around guidance continues to cap upside.
For now, the divergence between CCL, RCL, and NCLH highlights how quickly sentiment can shift after earnings season. Investors should consider keeping position sizes measured while monitoring whether forward guidance stabilizes across the cruise industry.
Key Takeaways Carnival reported Q2 adjusted EPS of 41 cents and revenues of $6.66 billion, both above estimates.Carnival posted a 12th straight quarter of record net yields and exceeded March guidance by $100 million.CCL ended Q2 with a record $9.0 billion in customer deposits and 93% of 2026 capacity booked. Carnival Corporation & plc (CCL - Free Report) reported better-than-expected second-quarter fiscal 2026 (ended May 31) results, with both adjusted earnings and revenues surpassing the Zacks Consensus Estimate. The top and bottom lines also increased on a year-over-year basis.
Despite reporting another earnings beat and delivering record quarterly results, Carnival's shares fell 5.7% in pre-market trading today. Investor sentiment was likely weighed down by management's second-half outlook, which reflects the impact of ongoing geopolitical tensions in the Middle East on booking trends for certain European deployments, particularly in the Mediterranean region.
Nevertheless, Carnival posted its twelfth consecutive quarter of record net yields and exceeded the March guidance by $100 million, driven by strong commercial execution and improved cost efficiency despite nearly 30% higher fuel costs. Management noted that recent booking trends are beginning to improve, indicating a gradual easing of geopolitical headwinds and reinforcing confidence in demand, pricing and the company's long-term earnings potential.
CCL’s Q2 Earnings & RevenuesIn the quarter under review, the company reported adjusted earnings per share (EPS) of 41 cents, beating the Zacks Consensus Estimate of 35 cents. In the year-ago quarter, CCL posted an adjusted EPS of 35 cents.
Revenues in the quarter totaled $6.66 billion, beating the consensus mark of $6.64 billion. The metric also increased 5.3% year over year.
During the quarter, passenger ticket revenues amounted to $4.27 billion, up from $4.10 billion reported in the prior-year quarter. Our estimate for passenger ticket revenues was also pegged at $4.23 billion.
Onboard and other revenues increased to $2.39 billion from $2.22 billion reported in the year-ago quarter. Our estimate for Onboard and other revenues was pegged at $2.38 billion.
Carnival’s FinancialsAdjusted net income in the quarter amounted to $569 million compared with $470 million reported in the prior-year quarter.
Adjusted EBITDA totaled $1.58 billion, up from $1.51 billion reported in the prior-year quarter.
CCL’s Balance SheetAs of May 31, 2026, cash and cash equivalents were $2.24 billion compared with $1.93 billion as of Nov. 30, 2025. Total debt (current and long-term) as of May 31, 2026, was $24.89 billion compared with $26.64 billion as of Nov. 30, 2025.
Booking Update of CarnivalThe company delivered another exceptionally strong booking performance, with its booked position for the second half of 2026 running ahead of last year at historically high prices on a constant-currency basis. This strength was achieved despite more than a full quarter of heightened geopolitical volatility that primarily affected booking trends for European deployments, particularly in the Mediterranean region. Management maintained pricing discipline by leveraging its occupancy advantage, supporting continued yield strength.
With 93% of 2026 capacity already booked and less inventory remaining for sale than at the same point last year, Carnival is well positioned to achieve record net yields in the back half of 2026. Demand for 2027 and beyond also remains robust, with booking volumes and pricing for future sailings running ahead of prior-year levels since March, including a significant increase in bookings for European itineraries.
The company's booking curve remains the furthest out on record, underscoring the strength of its portfolio of cruise brands and sustained demand generation efforts. Continued demand momentum was also reflected in higher fiscal second-quarter onboard revenues, increased pre-cruise onboard sales and strong customer engagement, providing enhanced revenue visibility.
Customer deposits reached an all-time high of $9.0 billion, surpassing the prior year's record by more than $450 million despite flat capacity growth over the next 12 months. The record deposit balance highlights the continued strength in consumer demand and further reinforces Carnival's strong cash flow profile.
CCL’s Q3 & FY26 OutlookFor third-quarter fiscal 2026, the company expects adjusted EBITDA to be approximately $2.88 billion. It expects fiscal third-quarter adjusted net income to be nearly $1.86 billion. The company expects fiscal third-quarter adjusted EPS to be $1.35.
For fiscal 2026, CCL now expects adjusted EBITDA of approximately $7.11 billion, down from its prior estimate of $7.19 billion. Adjusted net income is projected to be nearly $3.07 billion compared with the earlier expectation of $3.1 billion. Accordingly, adjusted EPS for the year is anticipated to be $2.22, revised up from the previous outlook of $2.21.
CCL’s Zacks Rank & Stocks to ConsiderCurrently, Carnival has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Flexsteel Industries (FLXS - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
The company delivered a trailing four-quarter earnings surprise of 59%, on average. FLXS stock has moved up 65.3% in the past six months. The Zacks Consensus Estimate for Flexsteel’s fiscal 2026 sales and EPS indicates an increase of 14.6% and 3.8%, respectively, from the year-ago levels.
Strategic Education, Inc. (STRA - Free Report) currently holds a Zacks Rank of 2 (Buy). The company delivered a trailing four-quarter earnings surprise of 11.2%, on average. STRA stock has declined 4.7% in the past six months.
The Zacks Consensus Estimate for Strategic Education’s 2026 sales and EPS implies growth of 16.5% and 1.7%, respectively, from the year-ago levels.
OneSpaWorld (OSW - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 31.8%, on average. OSW stock has climbed 33.2% in the past six months.
The Zacks Consensus Estimate for OneSpaWorld 2026 sales and EPS implies growth of 17.2% and 7.3%, respectively, from the year-ago levels.
Key Takeaways CCL says its softer back-half yield outlook reflects Europe disruption, not weaker long-term demand.Carnival beat Q2 estimates as record deposits, record yields and cost control offset geopolitical pressure.CCL is investing in destinations, fleet upgrades and buybacks while leverage improved to 3.1X. Carnival Corporation (CCL - Free Report) used its second-quarter 2026 earnings call to make a narrow but important point: the company’s softer back-half yield outlook reflects a temporary Europe disruption, not a break in its longer-term demand story.
Management paired that message with evidence of continued execution, including record yields, record customer deposits and tighter cost control that helped offset pressure tied to the Middle East conflict.
CCL Frames Europe as a Temporary HeadwindChief executive officer Josh Weinstein said second-quarter outperformance came despite extreme geopolitical volatility, weak consumer sentiment and sharply higher fuel prices. He argued the main disruption was concentrated in European deployments, especially the Mediterranean, where the prolonged Middle East conflict hurt booking trends and pressured the timing of demand.
Weinstein emphasized that Carnival entered the period with an occupancy advantage and used that flexibility to protect pricing rather than chase volume. That trade-off left the company still ahead of last year on booked position as it entered the third quarter, with 93% of 2026 inventory already sold and less inventory remaining than a year ago.
The quarter itself remained solid. Adjusted EPS came in at $0.41 versus the Zacks Consensus Estimate of $0.35, a 17.1% surprise, while revenues of $6.66 billion topped the consensus estimate of $6.64 billion by 0.3%. Adjusted net income reached a record $569 million, and net yields in constant currency rose 2.2% year over year.
Carnival Leans on Costs to Protect EarningsChief financial officer David Bernstein said Carnival beat its March guidance by $100 million, with cost control doing most of the work. Cruise costs excluding fuel per ALBD were essentially flat year over year, outperforming prior guidance by about 250 basis points.
Bernstein said some of that benefit reflected timing between quarters, but he also described broader changes that should stick. He pointed to multiple efficiency actions implemented across the organization that lowered the cost base and contributed a $0.06 per share improvement to full-year guidance.
That helped Carnival absorb a roughly 1 percentage point cut to yield growth versus prior guidance. Full-year adjusted EPS guidance now stands at $2.22. On a normalized basis, net yield growth is projected at about 2.25%, and cruise costs excluding fuel are expected to rise about 1.3%.
CCL Keeps Building Its Destination AdvantageWeinstein spent considerable time on destinations, treating them as a core earnings driver rather than a side strategy. He highlighted the pier extension at Celebration Key and the new pier at RelaxAway, Half Moon Cay as moves that increase throughput, flexibility and itinerary differentiation.
The company expects Celebration Key to host 3.5 million visitors next year, while Paradise Collection destinations are projected to welcome more than 9 million guest visits. Management argued that pairing Celebration Key with RelaxAway on the same itinerary creates a differentiated beach offering that competitors cannot easily match.
Carnival also pointed to Alaska and Western Caribbean assets as strategic advantages. Weinstein tied those destination investments to pricing power and stronger demand rather than simple capacity growth, reinforcing management’s view that execution on itineraries and owned infrastructure can support yields over time.
Carnival Balances Growth, Buybacks and DeleveragingManagement also used the call to show that stronger cash generation is widening Carnival’s strategic options. Bernstein said the company has already repurchased more than $450 million of stock under its $2.5 billion authorization and expects to return about $1.3 billion to shareholders this year when dividends are included.
At the same time, Carnival continues to invest in fleet renewal and modernization. The company ordered three new Princess ships for 2035, 2038 and 2039, while also expanding mid-life upgrade programs at AIDA and Holland America. Weinstein said those refurbishments are being underwritten to high-teen returns, with added cabins paying back in just a few years.
Leverage kept moving lower as well. Net debt to adjusted EBITDA improved to 3.1X at quarter-end from 3.4X at year-end 2025, giving management room to fund destination projects, buybacks and balance-sheet repair at the same time.
CCL Q&A Sharpened the Europe DebateAnalyst questions centered on how much of the outlook reset was truly tied to Europe and whether the weakness could spill into 2027. Weinstein was direct in saying the entire yield revision relative to March was tied to the Middle East conflict and its effect on European sailings, especially for fly-based North American customers.
He also said recent weeks showed improving trends, and management made clear that current guidance does not assume a return to second-quarter disruption levels. Bernstein added that third-quarter occupancy should be roughly flat year over year, reflecting a willingness to leave some cabins unsold rather than erode pricing.
In 2027, management stopped short of guidance but sounded constructive. Weinstein said bookings and pricing for 2027 are running ahead of last year, including a mid-teens increase in Europe bookings at higher prices, which he offered as proof that the current slowdown has not changed the longer-term demand backdrop.
Carnival Leaves the Call on OffenseThe clearest message from the call was that Carnival sees the second-half moderation as a temporary interruption, not a structural demand issue. Management’s tone stayed confident because pricing held up, costs improved, and bookings outside the immediate disruption zone remained firm.
Just as important, Carnival used the call to show it can keep investing through volatility. Destination expansion, fleet upgrades, buybacks and deleveraging were all presented as parallel priorities supported by a stronger operating base.
Zacks Signals on CCLCCL currently carries a Zacks Rank #3 (Hold), along with a Value Score of A, Growth Score of B, Momentum Score of F and VGM Score of B. Within the Zacks framework, a Hold-ranked stock can still be worth retaining, and the stronger Value and VGM grades indicate more favorable value and blended style characteristics than momentum at current levels. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A Style Score is designed to complement, not override, the Zacks Rank. A Zacks Rank #3 calls for more balance than a top-ranked stock, even with an attractive Value or VGM Score, and the rank can change as analysts revise earnings estimates after the quarter.
Market Leaders Including Cisco, MediaTek, NVIDIA, and Samsung Foundry
Demonstrate Measurable Impact, Advancing the Shift from Overdesign to Co-design
Key Highlights
Integrates golden signoff multiphysics analysis directly into timing signoff, design closure, multi-die, and analog workflows, enabling earlier, more accurate design decisions Enables SPICE-accurate multiphysics timing analysis with up to 3x faster runtimes Delivers up to 10x faster design closure with higher ECO success rates and improved PPA Provides concurrent power integrity, electromagnetic, and thermal analysis across dies and packaging, enabling early system-level insights from exploration to signoff , /PRNewswire/ -- Synopsys, Inc. (NASDAQ: SNPS) today announced availability of its first Multiphysics Fusion™ solutions for customer deployment. As chip complexity increases, physics-related challenges including signal integrity, power integrity, thermal integrity, electromagnetic effects, and co-packaged optics are becoming critical constraints at advanced nodes and in multi-die architectures, requiring a unified EDA and multiphysics approach. The Multiphysics Fusion portfolio combines Synopsys' AI-powered EDA solutions with Ansys golden signoff analysis across timing signoff, design closure, multi-die design, and analog workflows. Validated by market leaders, these solutions improve predictability and accelerate convergence for AI and high-performance computing systems.
"Multiphysics is fundamentally reshaping how advanced semiconductor designs are engineered, driving a shift from costly overdesign to integrated, system-aware co-design," said Sanjay Bali, Senior Vice President of EDA Product Management and Strategy at Synopsys. "Our Multiphysics Fusion portfolio unifies Synopsys and Ansys technologies to embed physics directly into digital and analog workflows, enabling engineering teams to design across domains with fewer iterations, improved productivity and more optimized silicon for next-generation systems."
Enabling Multiphysics‑Aware Co-Design Across the Chip Design Flow
Building on the vision introduced at Synopsys Converge 2026, the first Multiphysics Fusion solutions include targeted GPU-accelerated flows powered by NVIDIA CUDA-X libraries such as cuDSS:
Multiphysics Fusion for Timing Signoff: Enables up to 3x faster runtimes, SPICE-accurate multiphysics timing analysis. Integrates Synopsys PrimeTime® with RedHawk-SC™ and RedHawk-SC Electrothermal™, along with unified full-spectrum RC extraction using Synopsys StarRC™ and multiphysics HFSS-IC, to incorporate IR, thermal, and stress effects, improving margins and reducing IR-induced timing escapes. Multiphysics Fusion for Design Closure: Delivers up to 10x faster design closure with higher engineering change order (ECO) success rates and improved power, performance and area (PPA). Combines Synopsys PrimeClosure™ with RedHawk-SC to embed power integrity into golden signoff optimization, accelerating convergence with fewer iterations. Multiphysics Fusion for Multi-die Designs: Unified Synopsys 3DIC Compiler platform with RedHawk-SC, RedHawk-SC Electrothermal and multiphysics HFSS-IC for concurrent power integrity, thermal, and electromagnetic analysis, providing early system insights from exploration to golden signoff with correct-by-construction design. Multiphysics Fusion for Analog & Photonic Design: Integrates Synopsys Custom Compiler™ with multiphysics HFSS-IC for on-chip, high accuracy electromagnetic analysis into the analog design flow, and Synopsys OptoCompiler with Lumerical enabling end-to-end photonic IC and co-packaged optics systems. Demonstrating Real-World Impact with Market Leaders
Early engagements with leading semiconductor and systems companies validate the value of Multiphysics Fusion solutions:
"As multi-die integration becomes increasingly important for high performance compute platforms, it's critical we make the right system-level design decisions early in the development process," said Harrison Hsieh, vice president at MediaTek. "By unifying multiphysics analysis and timing signoff across digital, analog, photonic and multi-die designs, Synopsys Multiphysics Fusion technology gives us earlier insight into cross-domain interactions across silicon, advanced packaging and optical domains, which makes it possible for us to improve predictability, reduce late-stage rework, and achieve a runtime that's 10 times faster than before."
"Advanced AI and high-performance computing platforms are pushing chip design beyond traditional workflows, and to deliver greater performance, efficiency and reliability at scale, multiphysics-aware co-design is essential," said Tim Costa, vice president and general manager of computational engineering at NVIDIA. "Synopsys is using NVIDIA accelerated computing and CUDA-X libraries, including cuDSS, which delivers up to 13x GPU acceleration, to scale increasingly complex SPICE simulations, electromagnetics, and power-integrity workloads. In addition, Synopsys Multiphysics Fusion solutions enable up to 5x faster design closure and up to 86% IR fix rates in selected pilot designs."
"Accurate timing signoff at advanced nodes requires a unified approach that accounts for IR drop, thermal, and stress effects directly within timing analysis," said Hyung-Ock Kim, vice president and head of the Foundry Design Technology Team at Samsung Electronics. "Synopsys' Multiphysics Fusion technology provides a unified, all‑aware timing signoff platform by integrating PrimeTime with multiphysics insight, delivering SPICE-accurate correlation and enabling margin recovery. This is increasingly important as we pursue higher levels of integration, performance, and reliability across advanced process and multi‑die technologies."
In addition, the Cisco Silicon One group is leveraging Synopsys Multiphysics Fusion technology to unify IR drop effects within signoff design closure to gain earlier, more accurate visibility into real-world conditions. Combined with signoff-accurate, timing-aware IR fixing, this enables predictive optimization—helping Cisco Silicon One converge on power integrity issues faster, deliver better PPA, and achieve significantly faster runtime.
Availability
Multiphysics Fusion solutions for timing signoff, design closure, multi-die design, and analog and photonic design are available today. For more information, visit, https://www.synopsys.com/solutions/multiphysics-fusion.html.
Resources
Blog: From Overdesign to Co-Design: Confronting Multiphysics Challenges in Chips Blog: New Synopsys Multiphysics Fusion™ Technology Set to Transform Chip and Product Engineering eBook: Multiphysics Fusion Technology for Multi-Die Designs Explained eBook: Optimizing Analog Design with Multiphysics News Release: Synopsys Outlines Vision for Engineering the Future About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements concerning our expectations regarding certain of our solutions, including their anticipated performance and benefits, and the development of additional solutions and enhancements. These statements involve risks, uncertainties and other factors that could cause our actual results, time frames, or achievements to differ materially from those expressed or implied in such forward-looking statements. Information on potential risks, uncertainties and other factors that could affect Synopsys' results is included in filings we make with the SEC from time to time, including in the sections entitled "Risk Factors" in our latest Annual Report on Form 10-K and in our latest Quarterly Report on Form 10-Q.
Synopsys (NASDAQ:SNPS | SNPS Price Prediction) has spent 2026 stuck in the penalty box. The stock trades at $448.38, down 10.76% over the past month and 4.54% year to date, even as the chip design software duopoly remains the most strategically vital toll booth in semiconductors.
Our 24/7 Wall St. price target for Synopsys is $490.68 by year-end 2026, implying mid-single-digit upside from here. Our research view leans constructive with high conviction.
24/7 Wall St. Price Target Summary Metric Value Current Price $448.38 24/7 Wall St. Price Target (Year-End 2026) $490.68 Implied Upside ~9.4% Research View Constructive Confidence Level 90% Why the Stock Has Drifted Lower The narrative on Synopsys is mixed, and the price action reflects it. Shares sit 31.20% below the 52-week high of $651.73 set after the Ansys close, with a 52-week low of $376.18.
The Q2 FY2026 report on May 27, 2026 was strong: revenue of $2.276 billion grew 42% YoY, non-GAAP EPS of $3.35 beat consensus by 5.96%, and management raised full-year guidance to a midpoint of $9.665 billion in revenue and $14.76 in non-GAAP EPS.
The pressure is coming from a $10 billion long-term debt load, $403.6 million in quarterly amortization compressing GAAP profit, and a CFO $1.53 million Rule 10b5-1 sale on June 12, 2026.
The Case for $540 and Higher The bull case rests on Synopsys’s structural moat. CEO Sassine Ghazi said at the Mizuho Technology Conference that “no modern chips can be designed without the company’s technology.” Stifel reiterated Buy with a $600 price target on June 11, and Citi raised its target to $610 on the same day, citing the Q2 beat and IP recovery.
Analyst consensus sits at $560.38 with 17 Buy ratings, 7 Holds, and just 1 Strong Sell. Our bull scenario points to a year-end $539.62, driven by the new AI Product Suite, the Murata Ansys partnership, and Design Automation margins expanding to 43.3%.
What Could Push Shares to $466 The bear case centers on integration risk and Design IP. The segment generated $454.2 million in Q2, and the Processor IP Solutions divestiture removes roughly $40M from FY26 guidance.
Bulls would counter that the $234.2 million in H1 restructuring charges are non-recurring and that reallocating IP resources to AI-driven markets should drive sequential recovery in H2. Still, a trailing P/E of 104, shareholder lawsuits tied to Design IP disclosures, and a Morgan Stanley flag on growth deceleration justify caution. Our bear scenario sees year-end $466.25.
Synopsys Price Prediction 2026-2030 The 24/7 Wall St. price target is $490.68 by year-end 2026, with a 90% confidence read on a constructive view. The factor that tips the scale is the EDA duopoly with Cadence, which gives Synopsys pricing power inside every AI chip program on the planet.
The setup looks constructive here as long as Design Automation margins keep expanding and the September 30 Investor Day delivers credible long-term targets. The thesis weakens if Design IP fails to recover in H2 or if the Entity List headwind broadens.
Looking further ahead, here is where our model projects Synopsys could trade, assuming Ansys synergies compound and AI-driven EDA demand holds.
Year 24/7 Wall St. Price Target 2026 $490.68 2027 $559.18 2028 $645 2029 $745 2030 $860 These projections assume Synopsys keeps executing on the silicon-to-systems platform. Significant upside or downside could come from AI capex normalization or further export control escalation.
Synopsys (SNPS - 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 maker of software used to test and develop chips have returned -7.5%, compared to the Zacks S&P 500 composite's +0.3% change. During this period, the Zacks Computer - Software industry, which Synopsys falls in, has lost 9.4%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Synopsys is expected to post earnings of $3.68 per share for the current quarter, representing a year-over-year change of +8.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.2%.
The consensus earnings estimate of $14.75 for the current fiscal year indicates a year-over-year change of +14.3%. This estimate has changed +3.4% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $17.14 indicates a change of +16.2% from what Synopsys is expected to report a year ago. Over the past month, the estimate has changed +1%.
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, Synopsys is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Synopsys, the consensus sales estimate of $2.44 billion for the current quarter points to a year-over-year change of +40.3%. The $9.69 billion and $10.67 billion estimates for the current and next fiscal years indicate changes of +37.4% and +10.1%, respectively.
Last Reported Results and Surprise HistorySynopsys reported revenues of $2.28 billion in the last reported quarter, representing a year-over-year change of +41.9%. EPS of $3.35 for the same period compares with $3.67 a year ago.
Compared to the Zacks Consensus Estimate of $2.25 billion, the reported revenues represent a surprise of +1.13%. The EPS surprise was +5.68%.
Over the last four quarters, Synopsys surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Synopsys 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.
Bottom LineThe 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 Synopsys. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
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 Synopsys (SNPS - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Synopsys currently has an average brokerage recommendation (ABR) of 1.77, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 22 brokerage firms. An ABR of 1.77 approximates between Strong Buy and Buy.
Of the 22 recommendations that derive the current ABR, 14 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 63.6% and 4.6% of all recommendations.
Brokerage Recommendation Trends for SNPS
Check price target & stock forecast for Synopsys here>>>
The ABR suggests buying Synopsys, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
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.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRAlthough 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.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is SNPS Worth Investing In?Looking at the earnings estimate revisions for Synopsys, the Zacks Consensus Estimate for the current year has increased 3.7% over the past month to $14.75.
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 Synopsys. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Synopsys may serve as a useful guide for investors.
Synopsys (NASDAQ:SNPS | SNPS Price Prediction) is one of the most strategically positioned software franchises in the AI-era semiconductor stack, and the recent pullback has reset the setup for investors evaluating the name.
The 24/7 Wall St. price target for Synopsys is $561.40, implying 23.25% upside from $455.51. Our model classifies SNPS as a high-conviction setup, with 90% confidence in the target.
24/7 Wall St. Price Target Summary Metric Value Current Price $455.51 24/7 Wall St. Price Target $561.40 Upside 23.25% Recommendation BUY Confidence 90% A Strong Quarter Met With a Sleepy Stock SNPS is down 7.77% over the past month and 3.03% year to date, trading 14% below its 52-week high of $651.73 and well off the low of $376.18.
The cooldown followed a strong Q2 FY26 print on May 27, 2026: revenue of $2.276B, up 42% YoY, with non-GAAP EPS of $3.35 beating estimates by 5.96%. Design Automation operating margin expanded to 43.3% from 40.9% a year earlier. Management raised FY26 guidance to $9.625B to $9.705B in revenue and $14.72 to $14.80 in non-GAAP EPS.
The Case for $667 and Beyond Bulls have a clean thesis. CEO Sassine Ghazi said on the Q2 call that “AI is scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power, driving demand across our portfolio.”
Synopsys sits at the choke point for every advanced-node design, and the $35 billion Ansys acquisition that closed July 17, 2025 extends that moat into multi-physics simulation.
Q1 FY26 revenue grew 65.4% YoY, and the backlog stood at $11.4B exiting FY25. Of 25 analysts, 17 rate the stock Buy or Strong Buy against just one Strong Sell. Our bull case scenario puts SNPS at $667.14 within 12 months, a 46.46% return, if Ansys synergies accelerate and the September 30 Investor Day reveals raised long-term targets.
The Risks Worth Watching The bear case starts with the balance sheet. SNPS carries roughly $10B in long-term debt and $403.6M in quarterly intangibles amortization, which crushed GAAP net income to $17.1M in Q2.
Bulls will counter that this is purely a non-cash artifact of purchase accounting and that non-GAAP EPS and free cash flow of $2B tell the real story. Design IP remains soft, with management divesting Processor IP Solutions, and export controls into China remain an overhang.
Year-over-year quarterly earnings growth of -0.96% trimmed our factor by 0.03. The bear scenario lands the stock at $494.55 over the next year, still 8.57% above today.
Synopsys Price Prediction 2026-2030 The 24/7 Wall St. price target of $561.40 reflects a high-confidence buy. The tipping factor is the disconnect between accelerating non-GAAP fundamentals and a stock that has gone nowhere YTD.
The bull case rests on AI-driven design complexity remaining a multi-year tailwind and Ansys synergies landing as guided. The bear case strengthens if the trailing P/E of 104 matters more than the forward P/E of 31, or if China export controls tighten further.
Looking further out, here is where our model projects SNPS could trade, assuming current growth and margin trajectories hold.
Year 24/7 Wall St. Price Target 2026 $561.40 2027 $666.63 2028 $710.01 2029 $805.26 2030 $849.44 These projections assume Synopsys keeps executing on Ansys integration and AI design demand stays robust. Significant upside or downside could come from China export policy, EDA pricing power, or the pace of advanced-node design starts.
Pre-Market Stock Futures: Futures are trading lower after a mixed start to trading on Monday, following the holiday-shortened week due to the Juneteenth Federal holiday. We may start to see some end-of-the-quarter reallocations and selling for Hedge funds, ETFs, and Mutual Funds this week, and today looks like a starting point. With most corporate buybacks now on hold due to the second-quarter earnings blackouts, we could see additional volatility as the week progresses. The only indices to finish Monday positive were the Dow Jones Industrial Average, which closed at 51,712, up just 0.29%, and the Russell 2000 small-cap index, which closed at 3,005, up 0.88%. The Nasdaq took a beating, closing down 1.33% at 26,166, while the S&P 500 also closed lower, down 0.37% at 7,472. The Nasdaq and S&P 500 dropped on Monday as megacap tech stocks sold off sharply, dragging both indexes lower. Investors are growing increasingly uneasy about the steep infrastructure spending required to scale AI, while ongoing geopolitical tensions add another layer of uncertainty to markets.
Treasury Bonds: Treasury yields soared on Monday, and one likely reason we cover today at 24/7 Wall St. Bank of America came out Monday with a report saying the bank now expects a stunning 75 basis points of rate increases from the Federal Reserve for the rest of 2026. The BofA team sees a 25-basis-point increase in September, October, and December, effectively wiping out the 2025 cuts. Citing sticky inflation and a hawkish first meeting by new Fed Chairman Kevin Warsh, as reasons for a potential big shift in policy. The 30-year long bond closed the day at 4.95%, while the benchmark 10-year note was last seen at 4.51%
Oil and Gas: Despite some ambiguity about the Strait of Hormuz’s status on Monday, both major benchmarks finished the day lower. Brent Crude closed Monday at $78.18, down 2.97%, while West Texas Intermediate closed the session at $74.20, down 2.18%. Natural gas continued its hot streak, closing at $3.25, up 0.37%, with some pointing to the announcement CNBC reported that Chevron (NYSE: CVX | CVX Price Prediction) signed a 20-year agreement to supply natural gas to Project Kilby, a massive West Texas AI data center built by Microsoft. Located in Reeves County, this “behind-the-meter” plant will generate 2.67 gigawatts of electricity directly for the data center, bypassing the traditional power grid when it begins delivering power in 2028.
Gold: Gold started the week off right, closing 0.89% higher at $4,189, while Silver was last seen at $65.03, up 0.49%. Energy strategists pointed to the hefty pullback in crude oil prices following a 60-day roadmap toward a peace deal between the US and Iran in Switzerland. Easing geopolitical tensions can reduce inflation risk premiums and provide precious metals with relief from interest rates.
Crypto: Crypto markets moved quietly higher Monday as easing geopolitical tensions boosted investor confidence, with Bitcoin holding its ground above $64,000. BTC opened around $63,242 before climbing to $65,218, while Ethereum shook off early weakness to reach $1,775. The broader market followed suit, with altcoins gaining ground and ETFs tied to XRP, Solana, and Hyperliquid drawing notable inflows. At 8 AM EDT, Bitcoin traded at $62,360 while Ethereum traded at $1,657.
24/7 Wall St. reviews dozens of analyst research reports every day to identify fresh investment ideas for investors and traders alike. These daily analyst notes include recommendations on stocks to buy, sell, or avoid, as well as new coverage initiations. No single analyst report should ever be the sole basis for buying or selling a stock.
Here are some of the best Wall Street analyst upgrades, downgrades, and initiations seen on Tuesday, June 23, 2026.
Upgrades: American Healthcare REIT (NYSE: AHR) was upgraded to Buy from Neutral at Citigroup, with a $55 target price. International Business Machines (NYSE: IBM) was upgraded to Overweight from Neutral at JPMorgan, which lifted the price target for the legacy tech giant to $291 from $270. Qiagen NV (NYSE: QGEN) was raised to Overweight from Equal Weight at Morgan Stanley, which nudged the price target for the stock to $42 from $40. Synopsys (NASDAQ: SNPS) was upgraded to Overweight from Neutral at Piper Sandler, which raised the target price for the shares to $550 from $450. Target (NYSE: TGT) was raised to Outperform from Peer Perform at Wolfe Research, with a $162 price target. Downgrades: Arcosa (NYSE: ACA) was downgraded to Hold from Buy at Texas Capital, with a $150 target price. Darden Restaurants (NYSE: DRI) was downgraded to In Line from Outperform at Evercore ISI, with a $230 target price. Nike (NYSE: NKE) was downgraded to In Line from Outperform at Evercore ISI, with a $46 target price, down from $57, for the sports apparel and shoe giant. Ross Stores (NASDAQ: ROST) was cut to Equal Weight from Overweight at Wells Fargo, with an unchanged $245 target price. Sabra Health Care REIT (NASDAQ: SBRA) was downgraded to Neutral from Buy at Citigroup, which trimmed the target price for the stock to $19 from $24. Initiations: Centene (NYSE: CNC) was started with a Sector Perform rating at RBC Capital, which has a $70 target price for the stock. Flutter Entertainment (NYSE: FLUT) was initiated with a Hold rating at Freedom Capital, with a $105 target price objective. GE Healthcare Technologies (NASDAQ: GEHC) was initiated with an Outperform rating at RBC Capital, with an $80 target price. Permian Resources (NYSE: PR) was initiated with an Outperform rating at Evercore ISI, which has a $25 target price for the shares. Space Exploration Technologies (NASDAQ: SPCX) was started with a Neutral rating at Susquehanna, with a $170 target price.
Key Takeaways SNPS benefits from AI chip design demand, with DSO.ai used in more than 700 tape-outs.Synopsys expects fiscal 2026 revenue growth of 14.3%, with 83% of revenue recurring.APLD has 1.2 GW under contract, but nearly 90% of contracted revenues come from two customers. Synopsys (SNPS - Free Report) and Applied Digital (APLD - Free Report) are two of the biggest beneficiaries of surging AI capital expenditure by global investors in the semiconductor industry. All the layers of the semiconductor industry, including electronic and design automation, integrated device manufacturing, chip fabrication, fabless chip designers, packaging and assembly equipment players are gaining from the AI trend. These companies are not only growing on the back of their products but are also cashing in on the sale of intellectual property and patents of their technology.
Although Synopsys and Applied Digital serve separate verticals of the semiconductor industry, the AI tailwind is helping both companies grow. APLD serves as an infrastructure provider to new-age AI and high performance computing companies and builds, owns and operates large-scale data centers for them. Synopsys, on the other hand, automates engineering workflows, improves customer productivity and gains from the system-level and semiconductor R&D spending and robust AI compute design activity.
Given these dynamics, let's discuss the fundamentals of these two giants and pick the one that has more upside in the AI landscape.
The Case for Synopsys StockSynopsys is gaining from a multi-trillion-dollar AI infrastructure buildout as it leverages its decades of deep engineering expertise, proprietary codebases and solvers, silicon-proven design technologies and foundry co-optimization capabilities. The company has been able to provide its customers with up to 50% faster knowledge assistance, 70% faster workflow assistance and 5x faster formal testbench generation.
SNPS is using AI in two ways, which include making chip design faster and better and preparing for a broader shift where AI becomes a more autonomous workflow layer across design, verification and simulation. Synopsys provides DSO.ai and VSO.ai. DSO.ai is an optimization engine focused on tape-outs, while VSO.ai is being used more deeply in SoC blocks and verification workflows.
Synopsys’ customers have used DSO.ai to optimize more than 700 cumulative tape-outs, and VSO.ai has been deployed in up to 90% of SoC blocks on some chips, per its most recent earnings call. Synopsys has implemented AI in its product layer, which it calls XSO.ai, that enables its customers to train AI on their own workflow to create knowledge-assistant tools.
Another major contributor to Synopsys’ top line is its Design IP business. Over the years, Synopsys has heavily invested in developing and acquiring intellectual property for semiconductor electronic design automation and these IPs are now licensed by other companies, making SNPS a strong link in the AI semiconductor chain. Synopsys has expanded beyond its traditional silicon design business with the acquisition of Ansys, adding multi-physics simulation capabilities to its portfolio.
Synopsys generates most of its revenue from recurring sources, which made up 83% of total revenues in the second quarter of fiscal 2026. The Zacks Consensus Estimate for the SNPS’ fiscal 2026 revenues is pegged at $9.69 billion, suggesting year-over-year growth of 14.3%. The estimate for fiscal 2026 earnings implies year-over-year growth of 37.4%, which has remained unchanged over the past 30 days.
Image Source: Zacks Investment Research
The Case for Applied Digital StockApplied Digital is building its next growth phase around power infrastructure, which is becoming an increasingly important factor in AI data center deployment. As hyperscalers continue expanding AI workloads, access to reliable and scalable power is expected to play a larger role in data center site selection. APLD's strategy of securing utility-connected power capacity and developing campuses in energy-abundant regions could strengthen its position in the rapidly growing AI infrastructure market.
The company's North Dakota campuses are expected to provide a competitive advantage through access to low-cost grid power, favorable cooling conditions and an established operating footprint. These factors may help APLD offer customers long-term efficiency benefits while supporting the economics of multi-year hyperscale leases. The company already has 1.2 gigawatts of critical IT capacity under contract and is actively marketing additional development sites with more than 3.5 gigawatts of utility-connected power capacity. As AI infrastructure demand rises, these assets could support future leasing activity and expand APLD's revenue base.
However, customer concentration remains elevated despite continued efforts to diversify its hyperscale customer base. APLD has expanded its development pipeline and is actively pursuing additional leasing opportunities, but contracted revenues remain heavily concentrated among a limited number of customers, creating an ongoing risk to long-term revenue visibility.
The concentration remains significant. Of the company's approximately $36 billion in total contracted lease revenues, $11 billion is attributable to CoreWeave, while a separate hyperscaler anchors Delta Forge 1, Polaris Forge 3 and Delta Forge 2 and accounts for $20 billion. The remaining $5 billion is tied to a third hyperscaler at Polaris Forge 2. Together, just two customers represent close to 90% of total contracted revenues.
Applied Digital also works on a capex-heavy business model, which is keeping its bottom-line growth modest. The Zacks Consensus Estimate for APLD's fiscal 2026 revenues is pegged at $395 million, suggesting year-over-year growth of 83.5%. The estimate for fiscal 2026 earnings implies modest year-over-year growth of 15.2%, which has been revised downward in the past 30 days.
Image Source: Zacks Investment Research
SNPS vs. APLD: Price Performance & Valuation CheckSynopsys shares have lost 1.3% in the past year, while shares of Applied Digital have soared 358%.
Past One-Year Performance Chart
Image Source: Zacks Investment Research
On the valuation front, Applied Digital trades at a forward 12-month price-to-sales (P/S) multiple of 16.48 above its one-year median of 16.28x, while Synopsys’ 8.62x trades below its one-year median of 9.11x.
Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: SNPS vs APLDWhile both Synopsys and Applied Digital are positioned to benefit from the ongoing AI infrastructure boom, Synopsys appears to be the stronger investment choice based on the quality, durability and profitability of its growth. Applied Digital remains highly capital-intensive, relies on a small number of hyperscale customers and carries greater execution risk as it continues building out data center infrastructure. Given these factors, we suggest SNPS to be a safer choice over APLD stock. SNPS carries a Zacks Rank #2 (Buy), while APLD has a Zacks Rank #5 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
I rate Synopsys (SNPS) a Buy with a $657 price target, implying 43% upside from the current level of $461. The Ansys acquisition expands SNPS into system-level engineering, unlocking cross-selling, margin expansion, and a broader platform for AI-driven complexity. In my model, I estimate that core EDA contributes $4.13 of 2028-EPS, Ansys integration adds $1.26, and design IP adds $0.67. This gets me to a 2028 EPS-estimate of $20.92.
GoPro (GPRO) is an Extremely Speculative Buy with a base-case target of $1.45, reflecting a binary, event-driven investment thesis. GPRO faces severe distress: negative equity, ongoing dilution from a death-spiral convertible, and explicit going-concern risk, but a live strategic sale process is underway. The market misprices GPRO as a melting ice cube, while a competitive sale could deliver significant upside; downside is total loss if no deal materializes.
Few of the market's large-cap software names have fallen as hard this year as Salesforce (CRM +2.22%). The stock recently set a fresh 52-week low and is down about 40% year to date, leaving it among the worst performers in enterprise software. What makes the slide unusual is that the underlying business keeps setting records.
The company reported results for its fiscal first quarter of 2027 (the period ended April 30, 2026) in late May, and the numbers were strong. So why does the stock keep falling?
The answer has little to do with the latest quarter and almost everything to do with a single fear: that artificial intelligence (AI) agents will erode the per-seat subscriptions that software companies like Salesforce have long sold. If a handful of agents can do the work of many employees, the worry goes, customers will eventually need fewer paid seats. In addition, there's an overarching fear that AI will increasingly handle what software companies do today.
Image source: Getty Images.
What the latest quarter actually showed The fiscal first-quarter results suggest that fear may be overblown, at least for now. Salesforce's revenue rose 13% year over year to $11.1 billion, though about 4.4 percentage points of that growth came from its recent Informatica acquisition. Stripping that out, organic growth was closer to the high-single-digit pace the company has run at for a while.
More telling, however, was what happened beneath the top line. Salesforce's AI and data products generated $3.4 billion in annual recurring revenue (ARR), up about 200% from a year earlier, and its Agentforce agentic AI offering alone crossed $1 billion in ARR after more than tripling. And rather than shrinking, the seat count in the company's largest products grew.
"Our largest applications, sales and service, saw year-over-year seat growth with humans and agents both expanding on the platform," said Salesforce chief operating and finance officer Robin Washington in the company's fiscal first-quarter earnings call.
That dynamic, with customers paying for more seats rather than fewer even as they adopt automation, sits at the center of the bull case. Salesforce is also leaning hard into new ways to charge for AI, including usage-based pricing and a recent $3.6 billion deal to acquire Fin, an AI customer service platform.
The profit picture looks healthy, too. Salesforce's non-GAAP (adjusted) operating margin reached a record 34.8%, and the company generated $6.6 billion in free cash flow during the quarter. Salesforce also returned $27.5 billion to shareholders, the bulk of it through a $25 billion accelerated share repurchase that was the largest in its history. That buyback shrank the share count by about 10% from a year earlier.
Is the sell-off a buying opportunity? Not everything in the quarter, however, was reassuring. Management pointed to ongoing weakness in the company's commerce and Tableau businesses. Salesforce has also cut staff repeatedly over the past year as it reorganizes around AI. Of course, this can be viewed as both a negative and a positive.
Additionally, investors will need patience. Management is guiding for organic revenue growth to reaccelerate in the back half of the fiscal year -- a recovery investors will have to wait to see.
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The real problem for the stock recently may have been valuation. Only now is the stock starting to look reasonably priced in light of the risks of technological change that software companies face. After the sell-off, Salesforce trades at a forward price-to-earnings ratio of about 12, using the midpoint of management's full-year adjusted earnings outlook. For a profitable business still growing revenue at a double-digit rate and expanding its margins while buying back stock aggressively, that is a fairly attractive multiple.
So, is it finally time to buy? I'm staying cautious. The numbers increasingly suggest AI is acting as a catalyst for Salesforce rather than a threat. But the broader uncertainty over how AI will reshape software isn't going away soon, and that overhang could keep a lid on the valuation premium investors are willing to pay for software stocks for years, even ones executing as well as this one.
Overall, buying a small, undersized position here could make sense for investors comfortable with the AI disruption overhang that could plague the stock for years. From there, I'd only build the position into a meaningful stake if the stock falls significantly further. Approaching the stock this way gives investors the flexibility to profit if things go well, and to potentially keep buying a good business at an even better price.
Stripe, Alphabet GOOGL , Anthropic and Salesforce CRM are committing $915 million to carbon dioxide removal technologies through Frontier, the buyer coalition created to help early-stage climate startups scale. Frontier, which launched in 2022 with $925 million in backing, pools capital to buy future carbon removals from companies developing durable solutions.
The timing matters for investors because Microsoft MSFT , described in the source as the world's biggest investor in carbon removals, may be scaling back its activity. That could raise new questions about whether corporate demand can keep pace, even as climate scientists say the world may need to remove billions of tons of CO2 annually to reduce the worst effects of global warming.
Frontier's new fund will be more concentrated than its first commitment, focusing on 10 to 15 companies after previously backing more than 20 through offtake agreements. Companies seeking support will need to show a path to government subsidies or other public backing, as Frontier looks for startups that could become more scalable, affordable and efficient.
CRM announces 13 acquisitions over the past twelve months, with it building upon their historical growth-by-acquisition strategy albeit triggering a deteriorating balance sheet health. Otherwise, the strong free cash flow generation and the expanding multi-year backlog mitigate risks, significantly aided by the adj EPS accretion from the accelerated share repurchase cadence. Agentic AI integration and strategic acquisitions like Slack/Informatica drive accelerating workflow and ARR growth, lending credibility to CRM's AI beneficiary status and reiterated FY2030 guidance.
Salesforce is undervalued as investors overlook its transformation into an AI-driven digital labor platform through Agentforce. Agentforce, integrated with Slack, positions CRM to automate enterprise workflows, leveraging deep client integration and a robust data foundation. CRM's consumption-based model and Slack's role as the enterprise AI interface are driving rapid adoption and revenue growth, underappreciated by the market.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
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It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Salesforce (CRM - Free Report) Salesforce is the leading provider of on-demand Customer Relationship Management (CRM - Free Report) software, which enables organizations to better manage critical operations, such as sales force automation, customer service and support, marketing automation, document management, analytics and custom application development. Its offerings are delivered on the Agentforce 360 Platform, which connects customer data with integrated AI across systems, apps and devices.
CRM is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. CRM has a Growth Style Score of B, forecasting year-over-year earnings growth of 12.8% for the current fiscal year.
For fiscal 2027, 17 analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.97 to $14.12 per share. CRM boasts an average earnings surprise of +17.3%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CRM should be on investors' short list.
Salesforce (NYSE: CRM | CRM Price Prediction) and Oracle (NYSE: ORCL) both delivered fresh earnings inside a three week window, and the contrast is striking.
Salesforce sells AI agents that sit on top of customer data. Oracle sells the cloud plumbing those agents increasingly run on. Both are leaning into generative AI, but the way each one funds, prices, and books that growth tells two very different stories about where enterprise software dollars are flowing.
Agentforce Carries Salesforce. Cloud Infrastructure Carries Oracle. Salesforce posted Q1 FY27 revenue of $11.133 billion, up 13.27%, with EPS of $3.88 against a $3.1271 estimate. The real headline is Agentforce ARR at $1.2 billion, up 205%, with 3.8 billion Agentic Work Units delivered.
CEO Marc Benioff called it “an outstanding quarter for Salesforce, record revenue, record deals, and cash flow.” Over 50% of Agentforce bookings came from existing customers, which is reassuring but also raises a fair question about new logo velocity.
Oracle’s Q4 FY26 told a wilder story. Revenue hit $19.184 billion with cloud infrastructure surging 93% to $5.787 billion. Remaining performance obligations exploded to $638 billion, up 363%, with $75 billion tied to prepaid or customer supplied GPU arrangements.
That cushions Oracle’s capital risk, but capex still ran to $55.663 billion on a trailing basis, dragging free cash flow to negative $23.686 billion.
Capital Light vs. Capital Heavy Lens Salesforce Oracle Core Bet Agentic CRM on top of Customer 360 Hyperscale AI datacenters and OCI FY27 Revenue Guide $45.9B to $46.2B $90B Free Cash Flow $6.556B positive -$23.686B Forward P/E 12x 23x Salesforce funded a $25 billion accelerated share repurchase by issuing debt, taking noncurrent debt to $39.3 billion from $10.4 billion.
Oracle plans to raise roughly $40 billion in FY27 through debt and equity to keep building. Co-CEO Clay Magouyrk framed the strategy plainly, saying Oracle has “over 211 live and planned regions worldwide, more than any of our cloud competitors.”
The Next Test Is Whether AI Bookings Convert to Cash I want to see Agentforce monetization broaden beyond the installed base, and I will be watching whether Slack MCP, which crossed 1 million active users in six weeks, becomes a paid hook.
For Oracle, the question is how quickly that $638 billion RPO turns into recognized revenue without further blowing out capex. The Q1 FY27 cloud growth guide of 58% to 64% is the proof point.
Sentiment is telling, too. Reddit chatter on Oracle stayed bullish post-earnings, with sentiment scores 67 to 78. Salesforce drew the opposite reaction, with scores collapsing to 12 to 33 by June 11.
Why I Lean Toward Salesforce on Valuation, but Respect Oracle’s Backlog Personally, I find the setup awkward for both. Salesforce trades near a 12x forward P/E with a 38.64% year to date drawdown, which is unusual for a profitable software leader. For value-oriented investors who trust the Agentforce ramp, that valuation stands out.
Oracle is the bolder bet. The 450.97% ten year return and that backlog suggest real demand, but the FY27 capital raise and negative free cash flow mean you are underwriting Larry Ellison’s AI thesis with a heavier balance sheet.
On valuation alone, Salesforce screens cheaper, while Oracle’s backlog underwrites the growth case; one clean quarter of free cash flow improvement at Oracle would meaningfully de-risk the thesis.
Salesforce is transitioning from seat-based SaaS to metered, workflow-driven pricing, positioning itself as the metering layer for agentic enterprise software. Q1 FY27 results highlight robust 13% revenue growth, 34.8% non-GAAP operating margin, and $6.6B in free cash flow, with data/agentic layers growing 3x faster than legacy apps. Agentforce's usage-based model decouples revenue from headcount, compounding within the installed base; audit-lineage and zero-copy federation create a regulatory moat.
From the garage to a first-of-its-kind fan community, VCARB is redefining what it means to be a next-generation Formula 1® team through the power of AI
SAN FRANCISCO & FAENZA, Italy--(BUSINESS WIRE)--Salesforce (NYSE: CRM), the world’s #1 Agentic CRM, and Visa Cash App Racing Bulls (VCARB) Formula 1 Team today announced a new partnership — unifying fans, data, and team operations on a single agentic platform to transform fan engagement, hospitality, and the race day experience.
The collaboration will utilize the full power of Agentforce 360 – the complete portfolio of Salesforce AI solutions that power the Agentic Enterprise. This includes leveraging Slack to further connect VCARB's global teams and streamline workflows, from race day operations to fan community management.
VCARB is one of motorsports’ most digitally native teams, and the partnership marks a significant step in VCARB's broader vision to transform how it operates, engages, and delivers race day experiences. Together, the organizations are demonstrating what it looks like when a next-generation F1 team decides to become a true Agentic Enterprise. By deploying Agentforce 360 for real-time fan and VIP engagement and Slack to keep the entire operation connected, the result is more than a sponsorship; it's a showcase of how AI, data, and CRM power personalized fan moments at race speed.
As part of the partnership, VCARB is giving fans and VIP guests an exclusive window into the sport through the Salesforce Intelligence Centre — a first-of-its-kind installation displayed on garage screens featuring Tableau dashboards that visualize comparative track data and historical performance metrics. At its core is TORO, an AI agent powered by Agentforce 360 that surfaces insights and generates custom data visualizations on the spot. This offers a compelling view of VCARB performance data that deepens engagement and brings fans closer to the action, strategy, and decision-making that define Formula 1.
Looking ahead, VCARB will bring fans closer to the action with a dedicated Slack fan community, built around exclusive content, real-time collaboration, and race weekend connection. And for VIPs, VCARB is looking to reimagine the Paddock Club experience, leveraging Agentforce 360 to help guests easily navigate hospitality and logistics so human support teams can focus on the high-touch moments that matter most.
“Formula 1 is one of the most data-rich and fast-moving sports in the world, and our ambition is to use that data to create deeper, more meaningful connections with our fans,” said Peter Bayer, CEO at Visa Cash App Racing Bulls. “Partnering with Salesforce allows us to bring together AI, data, and real-time insights in ways that enhance every aspect of the fan experience, from the garage to our global community. As a team that embraces innovation, we’re excited to work with Salesforce to redefine what fan engagement can look like in this new era of Formula 1.”
"Formula 1 runs on precision, and with Agentforce 360, we've already seen how unifying data, agents, and human teams transforms fan engagement and support at a global scale,” said Patrick Stokes, CMO at Salesforce. “VCARB is building on that foundation in its own way. By bringing Agentforce 360 into the garage, VCARB is setting the bar for what an Agentic Enterprise looks like in motorsports."
About Salesforce
Salesforce helps organizations of any size become Agentic Enterprises — integrating humans, agents, apps, and data on a trusted, unified platform to unlock unprecedented growth and innovation. Visit www.salesforce.com for more information.
About Visa Cash App Racing Bulls Formula One Team
Visa Cash App Racing Bulls has been one of the sport's most consistent competitors since 2006. VCARB is one of two Red Bull-owned Formula One teams, serving as the talent incubator and launch pad for young drivers who have gone on to win races and World Championships in Formula One and beyond. Powered by Red Bull Ford Powertrains, the team is based both in Faenza, Italy and Milton Keynes, United Kingdom. VCARB also competes in the all-female F1 Academy series, extending its long-standing commitment to developing the next generation of racing talent.
Off track, VCARB is the team for a new generation of fans, democratising the world of F1 and giving people wiiings through its Creator Platform and wider fan initiatives. The team not only creates champions, it champions creativity.
Salesforce Inc. shares CRM extended their decline on Monday, falling 1.44% to $149.6 and putting the stock on track for a record 14th consecutive daily loss.
The move comes amid continued pressure on software companies as investors reassess the impact of artificial intelligence on the software-as-a-service (SaaS) model.
The stock has dropped 43% year to date, with much of the recent weakness attributed to concerns that customers could use AI coding agents to build alternatives to Salesforce’s Agentforce platform.
The current downturn marks the company’s longest losing streak on record and reflects broader sector-wide anxiety over AI disruption.
Salesforce last closed higher on June 1, following mixed first-quarter earnings released on May 27.
However, optimism around a potential re-rating of AI risk in software proved short-lived, as shares have since fallen 28% over the ongoing losing streak.
The broader software sector has also come under pressure amid what some analysts have described as a “SaaSpocalypse,” referring to concerns that AI could reshape or displace traditional SaaS business models.
AI agents—software systems capable of completing complex tasks using language models—have become central to these concerns.
While still early in development, the technology has raised questions about whether future workflows in knowledge industries could be handled increasingly by machines rather than traditional software platforms.
Salesforce itself attempted to address investor concerns last week by announcing a $3.6 billion acquisition of an AI agent-focused company, alongside the integration of a proprietary AI model and expanded agent capabilities.
Jefferies noted that Salesforce’s 15 mergers and acquisitions since May 2025 have helped “accelerate innovation.”
Despite this, shares continued to decline, suggesting the acquisition did little to shift near-term sentiment.
Analysts remain divided despite valuation-driven upgradesEven as Salesforce stock has fallen sharply, Wall Street sentiment remains broadly constructive.
Monness Crespi analyst Brian White upgraded the stock to Buy from Neutral with a $200 price target, citing valuation rather than operational improvements.
White noted that Salesforce has “earned the unflattering title as the second-worst performing stock in our coverage universe in 2026,” but argued that current levels present a compelling valuation opportunity.
He maintained the Buy rating based on discounted pricing and the company’s progress in supporting customers transitioning toward agentic enterprise models.
The stock’s recent weakness also follows a 52-week low of $146.32, underscoring the scale of the selloff.
According to FactSet data, Salesforce carries an average Overweight rating across 54 analysts, with a $244.58 price target.
The stock currently has 40 Buy-equivalent ratings, two Underweight ratings, and 12 Hold ratings.
Recent developments, including a $3.6 billion acquisition of Fin and partnerships such as one with a Formula 1 racing team for AI-driven operations, reflect Salesforce’s ongoing push into applied AI.
However, investor sentiment remains cautious as concerns over long-term software disruption continue to dominate trading behavior.
HomeIndustriesSoftwareTech StocksTech StocksShares of Salesforce posted their 14th consecutive day of losses as investors remain unconvinced of the company’s AI momentumPublished: June 22, 2026 at 4:50 p.m. ET
Shares of Salesforce deepened their record losing streak on Monday as the company continues to grapple with what investors see as an existential risk to its business posed by artificial intelligence.
Salesforce CRM shares fell 1% Monday, marking their 14th consecutive day of losses. Over that period, the stock has shed 28%. It’s an extension of Salesforce’s longest losing streak on record, based on available data going back to 2004, according to Dow Jones Market Data.
