Roku (ROKU - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this video streaming company have returned +9.8%, compared to the Zacks S&P 500 composite's +4.4% change. During this period, the Zacks Broadcast Radio and Television industry, which Roku falls in, has lost 2.7%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Roku is expected to post earnings of $0.61 per share, indicating a change of +771.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +56.9% over the last 30 days.
The consensus earnings estimate of $2.41 for the current fiscal year indicates a year-over-year change of +308.5%. This estimate has changed +12.8% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $3.54 indicates a change of +47.2% from what Roku is expected to report a year ago. Over the past month, the estimate has changed +7.9%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Roku.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Roku, the consensus sales estimate of $1.3 billion for the current quarter points to a year-over-year change of +16.9%. The $5.55 billion and $6.29 billion estimates for the current and next fiscal years indicate changes of +17.1% and +13.4%, respectively.
Last Reported Results and Surprise HistoryRoku reported revenues of $1.25 billion in the last reported quarter, representing a year-over-year change of +22.4%. EPS of $0.57 for the same period compares with -$0.19 a year ago.
Compared to the Zacks Consensus Estimate of $1.2 billion, the reported revenues represent a surprise of +3.8%. The EPS surprise was +67.65%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Roku 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 Roku. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Backed by years of consumer insights, the new Home Screen leads to less time searching, more time streaming
SAN JOSE, Calif.--(BUSINESS WIRE)--Today, Roku unveiled a new Home Screen that introduces a more dynamic, smarter experience and will reach over 100 million streaming households soon. With more relevant recommendations and faster pathways to content, the new Roku Home Screen reduces friction, maintains Roku’s signature simplicity, and helps viewers find their next favorite show with ease.
Today’s advancements mark the first significant update of the Roku Home Screen in over a decade. Guided by deep behavioral insights and viewer input, this update ensures every change is grounded in what users actually do, need, and value. The new personalized Home Screen tackles the biggest challenges in streaming, while offering a tailored, content-forward way to start watching.
“When we set out to rethink the Home Screen, we knew we should listen to the people who use it every day. So we talked to the viewers, we tested extensively, and we pushed until the design and the data lined up for a meaningful update,” said Anthony Wood, Founder and CEO, Roku. “Now, our new Home Screen puts entertainment at the center of everything, while staying true to Roku’s simple, intuitive roots. More than 100 million households will feel the difference the moment they turn on their TV—and it opens up a better, more powerful experience for our partners as well.”
A majority of streamers (82%) agree they would love if they turned on their TV and the show they wanted to watch was right on their Home Screen.* The new Roku Home Screen does just that, recommending content based on your interests and helping you start watching faster. With billions of possible Home Screen combinations, Roku’s intelligence models pick the best one for each viewer every time they turn on their TV. New features include:
Quick Access for your most used apps, continuously adapting to your routine An intelligence-driven and expanded content-first “Top Picks for You” section New genre-based destinations such as: For You, built on your interests and filled with fresh personalized picks Subscriptions, allowing for a convenient way to browse and discover from across all your subscriptions in one place Search in key destinations with relevant suggestions and results A streamlined collapsible menu Elevated shortcuts for everyday actions including Save List, Continued Watching, and more Your Daily Scoop, a dynamic row that brings you a curated digest of breakout shows and cultural trends A Roku City tile, taking you to an interactive version of your favorite screensaver The new Home Screen begins rolling out today across all Roku TVs and streaming devices in the United States. Expansion to additional countries will follow in the coming months.
To learn more about what’s new, visit the Roku Blog. Visual and video assets can be found here.
* Roku/Harris Poll April 2026
About Roku, Inc.
Roku pioneered streaming on TV. Today, it is the #1 TV streaming platform in the U.S., Canada, and Mexico by hours streamed (Hypothesis Group, Dec. 2025). Roku connects viewers to the content they love, enables content publishers to build and monetize large audiences through advertising and subscriptions, and provides advertisers with unique capabilities to reach and engage consumers. Roku streaming players and Roku-made TVs are available at major retailers, and licensed Roku TV™ models are sold by leading TV brands in more than 15 countries around the world. Roku also owns and operates The Roku Channel, the home of premium and free entertainment; Howdy, a low-cost subscription service; and Frndly TV, a live TV streaming service. Roku is headquartered in San Jose, Calif., U.S.A.
This press release contains “forward-looking” statements based on our beliefs, assumptions, and information available to us on the date of this press release. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements include but are not limited to statements relating to the features, capabilities, benefits, and reach of the Roku Home Screen and the Roku platform. Except as required by law, we assume no obligation to update these forward-looking statements publicly or update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Important factors that could cause actual results to differ materially are detailed in reports Roku, Inc. files with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on Roku’s website.
Roku, which recently surpassed 100 million streaming households, is introducing a new, personalized home screen it calls more dynamic and smarter. The first major update of the Roku Home Screen in over a decade features “more relevant recommendations and faster pathways to content, guided by deep behavioral insights and viewer input,” the company said.
SAN JOSE, Calif.--(BUSINESS WIRE)--Roku, Inc. (Nasdaq: ROKU) announced today that Dan Jedda, CFO and COO, will participate in a fireside chat at the Evercore ISI Global TMT Conference on Tuesday, June 2. Mr. Jedda is scheduled to appear at 1:20 PM PT.
A live webcast and replay of the presentation will be available on the investor relations section of the Roku website at www.roku.com/investor.
About Roku, Inc.
Roku pioneered streaming on TV. Today, it is the #1 TV streaming platform in the U.S., Canada, and Mexico by hours streamed (Hypothesis Group, Dec. 2025). Roku connects viewers to the content they love, enables content publishers to build and monetize large audiences through advertising and subscriptions, and provides advertisers with unique capabilities to reach and engage consumers. Roku streaming players and Roku-made TVs are available at major retailers, and licensed Roku TV™ models are sold by leading TV brands in more than 15 countries around the world. Roku also owns and operates The Roku Channel, the home of premium and free entertainment; Howdy, a low-cost subscription service; and Frndly TV, a live TV streaming service. Roku is headquartered in San Jose, Calif., U.S.A.
Roku is a registered trademark, and Roku TV is a trademark of Roku, Inc. in the U.S. and in other countries.
Roku, Inc. (Nasdaq: ROKU) announced today that Dan Jedda, CFO and COO, will participate in a fireside chat at the Evercore ISI Global TMT Conference on Tuesday, June 2. Mr. Jedda is scheduled to appear at 1:20 PM PT.
A live webcast and replay of the presentation will be available on the investor relations section of the Roku website at www.roku.com/investor.
About Roku, Inc.
Roku pioneered streaming on TV. Today, it is the #1 TV streaming platform in the U.S., Canada, and Mexico by hours streamed (Hypothesis Group, Dec. 2025). Roku connects viewers to the content they love, enables content publishers to build and monetize large audiences through advertising and subscriptions, and provides advertisers with unique capabilities to reach and engage consumers. Roku streaming players and Roku-made TVs are available at major retailers, and licensed Roku TV™ models are sold by leading TV brands in more than 15 countries around the world. Roku also owns and operates The Roku Channel, the home of premium and free entertainment; Howdy, a low-cost subscription service; and Frndly TV, a live TV streaming service. Roku is headquartered in San Jose, Calif., U.S.A.
Roku is a registered trademark, and Roku TV is a trademark of Roku, Inc. in the U.S. and in other countries.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260601874884/en/
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Roku (NASDAQ:ROKU | ROKU Price Prediction) is the streaming name everyone wants to talk about after a 64.41% EPS beat and a 79.82% one-year run. But here’s what you should actually be watching.
Roku is the textbook crowded trade right now. The stock has ripped 15.29% year to date and trades at a trailing P/E of 93 with a forward multiple of 53, priced like it has already won connected TV advertising. The fundamentals say otherwise. The Devices segment is in structural decline at -16% YoY with gross margins in the high negative 20% range, and management itself flags tightening memory chip supply as a margin headwind for the back half of 2026. This is a pure-play CTV aggregator competing against Amazon, Google, and Samsung, with a $400 million buyback, zero dividend, and a beta of 2.04. That is a risk profile income-focused investors may want to weigh carefully.
Now look at Walt Disney (NYSE:DIS). The stock is down 8.96% year to date and sits at $103.58, trading at just 17 times trailing earnings and 15 times forward. That is the entire setup: Wall Street is paying a premium for the streaming story at Roku while the actual streaming profitability inflection is happening at Disney for half the multiple.
Three reasons Disney screens better here.
1. A diversified moat Roku cannot replicate. Disney’s Q2 FY2026 delivered $25.17 billion in revenue, up 6.55%, with operating income of $4.603 billion, up 31.29%. Experiences booked record Q2 revenue of $9.487 billion, up 7%, with per-capita spending at domestic parks up 5%. ESPN just absorbed the NFL Network. Roku rents the living room. Disney owns Pixar, Marvel, Lucasfilm, ABC, and the cruise line.
2. The streaming inflection is here, and it’s at Disney. Entertainment SVOD operating income surged 88% to $582 million, hitting a 10.6% operating margin for the first time. Zootopia 2 pulled in $1.9 billion at the global box office and over 1 billion streamed hours. Management raised FY2026 adjusted EPS growth guidance to ~16% and guided to double-digit growth again in FY2027.
3. Capital return retirees actually receive. Disney pays a $1.50 annual dividend with the next payment July 22, 2026. The buyback was raised to at least $8 billion for FY2026, with $5.5 billion already executed in the first six months. Free cash flow hit $4.941 billion in the quarter alone. And on March 31, eight Disney directors bought stock on the open market at $96.96, a coordinated insider vote of confidence Roku simply does not have.
Josh D’Amaro put it plainly on the call: “Our creative and operational momentum drove strong quarterly results, and we continue to expect growth to accelerate in the second half of the fiscal year.” Analysts carry a $129.47 price target on the name.
Roku is the story stock. Disney is the cash machine trading at a discount because the headline writers got bored. Disney looks like the more defensible setup on this risk-reward.
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?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Roku (ROKU - Free Report) .
Roku currently has an average brokerage recommendation (ABR) of 1.45, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 30 brokerage firms. An ABR of 1.45 approximates between Strong Buy and Buy.
Of the 30 recommendations that derive the current ABR, 22 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 73.3% and 6.7% of all recommendations.
Brokerage Recommendation Trends for ROKU
Check price target & stock forecast for Roku here>>>
While the ABR calls for buying Roku, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
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 ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
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.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
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.
Should You Invest in ROKU?Looking at the earnings estimate revisions for Roku, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $2.41.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market 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 #3 (Hold) for Roku. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Roku.
Roku is positioning itself as a premier destination for live sports content. ROKU has added FOX One to its premium subscription lineup ahead of major World Cup coverage. Roku is now in 100 million households worldwide, a landmark accomplishment.
Investing even a little bit of money into the equity of businesses is better than putting no capital at risk. That's because the stock market has proven to be an excellent tool to build long-term wealth. The closely followed S&P 500 index has generated a total return of 328% in the past decade (as of June 3).
Some individual businesses might possess even greater potential. And $1,000 is a good place to start when searching for these opportunities. If you're ready to invest this much, take a look at this streaming stock. It's a consumer play for the long term.
Image source: Getty Images.
Well positioned in the streaming industry In the world of streaming, Netflix, Walt Disney, or Alphabet's YouTube get a lot of the attention. Roku (ROKU +20.52%) might be overlooked. But it's very well positioned in the overall industry.
Investors might think of the business as a seller of media sticks or TVs, but Roku is primarily a platform these days. This platform segment, which makes money from advertising and subscriptions, posted 28% year-over-year revenue growth to over $1.1 billion in Q1 (ended March 31). The platform represents 91% of the company's top line, with hardware accounting for the rest.
Roku currently reaches more than 100 million households, with a whopping 38.7 billion hours of content being viewed on the platform in the last quarter. Both of these figures are up significantly over the past five years, demonstrating increasing adoption. Consumers find real value in being able to aggregate all of their streaming services in a single user interface.
Roku is riding the digital advertising wave as well, particularly in the connected-TV market. As ad dollars keep flowing from traditional cable TV to streaming, which is where more eyeballs and attention will be in the future, this company stands to benefit.
Today's Change
(
20.52
%) $
24.55
Current Price
$
144.19
Profits are soaring This streaming stock has performed extremely well, rising 68% in the past 12 months and 103% over the past three years. Investors have plenty of opportunity for upside, however. Expectations might still be under pressure, as shares trade 75% off their peak right now.
Profit growth will be the key driver of stock gains in the future. Roku generated $484 million in free cash flow in 2025. And the leadership team expects this metric to effectively double to $1 billion by 2028.
The company is also on pace to report positive generally accepted accounting principles (GAAP) net income this year. Consensus analyst estimates call for diluted earnings per share to climb at a compound annual rate of 107% between 2025 and 2028.
This is a solid long-term consumer play. And with $1,000, investors can buy about eight shares of Roku.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Netflix, Roku, and Walt Disney. The Motley Fool has a disclosure policy.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
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 are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see 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.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
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.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee 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.
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: Roku (ROKU - Free Report) Roku is the leading TV streaming platform provider in the United States, Canada and Mexico based on hours streamed.
ROKU is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. ROKU has a Growth Style Score of A, forecasting year-over-year earnings growth of 308.5% for the current fiscal year.
10 analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.47 to $2.41 per share. ROKU also boasts an average earnings surprise of +107.3%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, ROKU should be on investors' short list.
Roku (ROKU - 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 video streaming company have returned -3.5%, compared to the Zacks S&P 500 composite's +0.2% change. During this period, the Zacks Broadcast Radio and Television industry, which Roku falls in, has lost 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 RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Roku is expected to post earnings of $0.61 per share for the current quarter, representing a year-over-year change of +771.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%.
The consensus earnings estimate of $2.41 for the current fiscal year indicates a year-over-year change of +308.5%. This estimate has changed +0.2% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $3.62 indicates a change of +50% from what Roku is expected to report a year ago. Over the past month, the estimate has changed +2.3%.
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, Roku is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Roku, the consensus sales estimate of $1.3 billion for the current quarter points to a year-over-year change of +16.9%. The $5.55 billion and $6.31 billion estimates for the current and next fiscal years indicate changes of +17.2% and +13.6%, respectively.
Last Reported Results and Surprise HistoryRoku reported revenues of $1.25 billion in the last reported quarter, representing a year-over-year change of +22.4%. EPS of $0.57 for the same period compares with -$0.19 a year ago.
Compared to the Zacks Consensus Estimate of $1.2 billion, the reported revenues represent a surprise of +3.8%. The EPS surprise was +67.65%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Roku is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Roku. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
There's a divergence happening within the world of streaming entertainment. Netflix (NFLX 1.20%), the pioneer in the industry, has seen its share price fall 12% in 2026 (as of June 10). Roku (ROKU +20.52%), on the other hand, is up 11% this year.
These companies have different operations. But investors might look at them as a way to allocate capital to a growing and tech-forward industry. The performance of their shares might provide an indication as to the direction their businesses are going in.
Which of these well-known streaming stocks is the better one to buy in June?
Image source: The Motley Fool.
The behemoth is slowing down Netflix continues to dominate video entertainment. It has more than 325 million subscribers. Its massive scale supports huge profits. The company's operating margin in Q1 was a reported 32.3%.
But it's becoming clear that its next phase will be defined by slower growth. Management expects sales to rise 13.3% (at the midpoint) year over year in 2026, which would be the slowest pace since 2012 (besides 2022 and 2023).
During the earnings call, co-CEO Greg Peters mentioned that Netflix hasn't yet captured 45% of its addressable market based on about 800 million total smart-TV-capable households in the countries it operates in. This means that there is still a sizable untapped opportunity to continue pushing growth. In theory, this is the correct view.
However, bringing these consumers on as Netflix subscribers will be much more difficult than it has been. Competition is incredibly fierce. Key markets like the U.S. and Canada are essentially saturated. And growth in emerging countries, like India, Brazil, and Mexico, will come from cheaper membership tiers that will have less impact on revenue.
Based on the stock's 12% decline this year and the 39% fall from its peak in June 2025, the market might be accepting this new reality. Shares trade at a price-to-earnings ratio of 26.5, representing a 36% discount to the five-year trailing average.
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It's all about free cash flow During the first quarter (ended March 31), Roku reported a year-over-year revenue gain of 22.4%, with the top line totaling $1.2 billion. This was the fastest growth rate since Q1 2022.
The company's platform segment is operating at a high level. Its sales were up 28% in Q1, driven by a 27% increase in advertising and a 30% jump in subscriptions. This is a very high-margin revenue stream, with the gross margin coming in at 51.6%.
Roku's position as an agnostic streaming ecosystem works to its benefit. While content companies spend copious amounts of money to develop shows and movies, this business provides a meaningful value proposition as the aggregator of all those offerings. More than 100 million households are Roku customers, giving the company's smart-TV operating system the leading market share in North America.
Although revenue trends get the attention, it's time investors start to focus on the profit story. The leadership team forecasts $360 million in net income this year. And in 2028, they expect Roku to generate $1 billion in free cash flow (FCF), up 107% from 2025. Cost controls and rising high-margin platform revenue are tailwinds.
Shares trade at 17.3 times the 2028 $1 billion FCF estimate. That's a compelling valuation to pay, given Roku's outstanding growth trajectory.
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What's your objective? Both Netflix and Roku are in strong positions within the broader media and entertainment landscape. Investors looking to bet on streaming's ongoing success are wise to consider these two businesses.
Netflix is the safer opportunity. It has established a leadership position, supported by a tech-enabled platform and strong content creation. And its impressive profitability is hard to overlook.
Roku's advertising-heavy model is taking off, even though it can be more cyclical. But the company's rising FCF is an encouraging trend that can boost shareholder value.
Investors deciding between these two streaming stocks must determine their ultimate objective. If you're after a proven and stable company, Netflix is the better choice. But if you want the chance to achieve better returns, Roku has more upside over the next five years.
Roku (ROKU - Free Report) ended the recent trading session at $119.62, demonstrating a +2.29% change from the preceding day's closing price. This change outpaced the S&P 500's 1.75% gain on the day. On the other hand, the Dow registered a gain of 1.86%, and the technology-centric Nasdaq increased by 2.54%.
Shares of the video streaming company witnessed a loss of 6.95% over the previous month, trailing the performance of the Consumer Discretionary sector with its loss of 1.28%, and the S&P 500's loss of 1.63%.
The upcoming earnings release of Roku will be of great interest to investors. It is anticipated that the company will report an EPS of $0.61, marking a 771.43% rise compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $1.3 billion, up 16.93% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.41 per share and a revenue of $5.55 billion, indicating changes of +308.47% and +17.19%, respectively, from the former year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Roku. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.21% higher within the past month. Roku is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, Roku is presently being traded at a Forward P/E ratio of 48.5. This indicates a premium in contrast to its industry's Forward P/E of 13.93.
The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 164, this industry ranks in the bottom 33% of all industries, numbering over 250.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Roku (ROKU) stock surged on Friday after a news report said the streaming video platform could be an acquisition target.
Bloomberg said the San Jose, Calif.-based company has been in discussions with at least one U.S. media company about a potential combination.
↑ X NOW PLAYING Want To Win Big In Prediction Markets? Here's What You Should Know.
On Friday, Roku stock jumped more than 20% to close at 143.66. In intraday trading, it notched a four-year high of 148.88.
Earlier on Friday, Evercore ISI analyst Robert Coolbrith reiterated his outperform rating on Roku stock and raised his price target to 185 from 160. He called Roku stock a "top pick."
In a note to clients, Coolbrith said Roku will benefit materially from the launch of a new home screen. Roku's new home screen, launched on May 27, will allow the company to better monetize its platform with advertising, he said.
"Roku's recent launch of a new Home Screen represents the most material update to Roku's user experience in the past decade," Coolbrith said. "While we see an array of benefits, we think the most salient near-term will be a significant expansion in availability of the large 'Marquee' ad unit."
He added, "We think the Home Screen should be an important growth driver in FY27, coming at very high incremental margin, and one which we believe is largely not incorporated into current Street consensus forecasts."
Roku Stock Is A Recent Breakout The new home screen also should provide a "modest accelerant" to first-party and third-party subscription streaming service revenue, Coolbrith said.
On April 17, Roku stock broke out of a cup base at a buy point of 116.33, according to IBD MarketSurge charts.
Roku stock has been on the upswing since the company delivered a better-than-expected first-quarter earnings report on April 30.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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The Roku company logo is displayed on a building in Austin, Texas, U.S., October 25, 2021. REUTERS/Mike Blake Purchase Licensing Rights, opens new tab
CompaniesJune 12 (Reuters) - Roku Inc (ROKU.O), opens new tab is exploring its strategic options, including a full sale of the company, according to six people familiar with the matter, amid interest from companies seeking access to its vast streaming audience and advertising platform.
The company, whose shares jumped 22%, has held discussions with at least one U.S. media company about a potential combination, though no final decisions have been made on a potential sale, one of the sources said. The company has also explored other options, including a private investment in public equity, or PIPE transaction, another source said.
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Roku did not immediately respond to requests for comment.
Roku, which has a market capitalization of about $19.4 billion, produces streaming devices and Roku-branded TVs, distributes streaming services and operates a growing digital advertising business.
Its business is largely driven by advertising and subscription revenue from streaming apps on its platform. Advertising is the largest component, with revenue of $613 million in the first quarter, up 27% year on year.
Roku also takes a cut of subscription sign-ups to services such as Amazon and Netflix promoted on its interface, while at the same time pushing its own content offerings, highlighting a structural tension in its model.
The Roku Channel, its free ad-supported streaming service, has become a key growth driver, but it competes with other ad-supported platforms such as Fox (FOXA.O), opens new tab-owned Tubi and Paramount’s (PSKY.O), opens new tab Pluto TV. Roku last year partnered with Amazon to allow marketers to buy ads on the Roku Channel, even as Amazon (AMZN.O), opens new tab promotes its own free streaming service on Roku’s platform.
Roku Channel is the most-watched free streaming service on its platform, according to Nielsen, but the segment is becoming increasingly crowded as traditional TV declines and more companies launch ad-supported offerings, analysts say.
Roku’s more than 100 million streaming households and the data it collects on viewing behavior could make it attractive to potential buyers, including media, technology and advertising companies, the sources said.
Reporting by Harshita Mary Varghese in Bengaluru; Editing by Joyjeet Das and Arun Koyyur
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Echo Wang is a correspondent at Reuters covering U.S. equity capital markets, and the intersection of Chinese business in the U.S, breaking news from U.S. crackdown on TikTok and Grindr, to restrictions Chinese companies face in listing in New York. She was the Reuters' Reporter of the Year in 2020.
Milana Vinn reports on technology, media, and telecom (TMT) mergers and acquisitions. Her content usually appears in the markets and deals sections of the website. Milana previously worked at GLG and PE Hub, where she spent several years covering TMT deals in private equity. She graduated from CUNY Graduate School of Journalism with Masters in Business Journalism.
Order flow analytics analyze real-time buying and selling trends by examining the volume, timing, and order size across both retail and institutional traders. These insights offer a more detailed understanding of price behavior and market sentiment for a stock, allowing the trader or institution to make the most informed decision possible.
MU Performance
At the time of the Power Inflow, MU was priced at $919.99. Following the signal:
• Intraday High As Of 2:00PM EST: $950.49 (+3.32%)
This article is for informational purposes only and does not constitute financial advice, investment recommendations, or a solicitation to buy or sell securities. The analysis is based on stock order flow data, but accuracy is not guaranteed. Investing involves risk, including possible loss of principal, and past performance is not indicative of future results. Please consult a licensed financial advisor before making any investment decisions.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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Micron Technology MU shares moved higher on Thursday as investors returned to semiconductor stocks and analysts grew increasingly optimistic about the outlook for memory-chip demand driven by artificial intelligence.
The stock gained more than 10% during the session, rebounding after a sharp pullback that had seen shares fall roughly 12% over the previous five trading days.
Despite the recent correction, Micron remains one of the strongest-performing semiconductor stocks of the year, with shares up more than 212% in 2026.
The recovery came even as rival memory-chip producer SK Hynix outlined plans to significantly expand wafer production over the coming decade.
Investors appeared largely unconcerned by the announcement, given the long timeline for the planned capacity increase and the continued strength of AI-related demand.
Wall Street analysts argue that the recent decline in memory stocks does not signal the end of the industry's current growth cycle.
Morgan Stanley analyst Shawn Kim said dynamic random-access memory (DRAM) remains a critical bottleneck in the artificial intelligence buildout, positioning Micron, SK Hynix and Samsung Electronics to continue benefiting from strong demand.
"The cycle is still accelerating, earnings revisions remain robust and more sustainable than most believe," Kim said in a Wednesday note.
The analyst described the recent pullback in memory stocks as a necessary reset following substantial gains earlier in the year.
A correction among memory stocks that have had strong run-ups so far this year "was inevitable and ultimately healthy if this memory bull market is going to extend" through the end of the year, he said.
Kim added that growing demand from agentic AI applications could keep the current cycle running longer than previous memory upcycles.
He also pointed to long-term supply agreements between chipmakers and customers as a factor that could support higher valuation multiples across the sector.
Wolfe Research analyst Chris Caso expressed a similar view, arguing that long-term customer agreements could support "better multiples" because future supply expansions are increasingly tied to actual demand forecasts.
Several brokerages responded to the improving outlook by sharply increasing their price targets for Micron.
Wolfe Research raised its target to $1,250 from $550 while maintaining an Outperform rating.
The firm cited stronger-than-expected memory pricing and increased demand for high-bandwidth memory (HBM), a key component used in advanced AI systems.
Wolfe increased its forecasts after estimating approximately 45% growth in memory pricing during Micron's fiscal third quarter.
The firm expects favorable pricing trends to continue through calendar year 2026.
Daiwa also raised its price target on Micron, increasing its forecast to $1,600 from $700 while maintaining a Buy rating.
Despite the stock's strong performance this year, Micron continues to trade at a relatively modest valuation.
According to Dow Jones Market Data, the company trades at roughly 9.4 times forward earnings estimates, placing it among the cheapest stocks in the S&P 500 on that basis.
Supply constraints remain a key themeIndustry participants continue to point to supply shortages as a major driver of higher memory prices.
Memory prices have nearly doubled since February, while lead times have expanded as demand outpaces available supply.
IDC expects those supply constraints to persist for several more years.
"We’re not seeing any relief to the memory shortage situation before the end of 2027, which means prices will continue to rise and PC manufacturers will struggle to maintain full product portfolios for the foreseeable future," said Jean Philippe Bouchard, Vice President of Devices and Consumers at IDC.
Micron is also expanding its manufacturing footprint.
The company announced that it has selected Bechtel for its semiconductor project in New York, which is expected to support approximately 50,000 jobs, including more than 4,500 construction positions.
As AI-related demand continues to reshape the semiconductor industry, investors are increasingly betting that memory-chip suppliers such as Micron will remain among the sector's primary beneficiaries.
"Micron (MU) is going to have more free cash flow in 2026 than all of its prior years combined," says Zed Francis, pointing to it as a leading example to the fundamentals supporting it and other AI memory chipmakers. He outlines the "decent runway" he sees for these companies.
After two days of dispiriting declines, Micron (MU 1.02%) stock bounced back on Thursday, closing the day up 11.7% and returning its share price to where it was one week ago -- before the epic sell-off in semiconductor chip stocks.
Wolfe Research helped make that happen.
Image source: Micron.
Why Wolfe still loves Micron stock Despite investor worries about the health of the market for artificial intelligence chips, and for the high-bandwidth memory that helps AI systems answer questions, Wolfe clambered out on a limb today to raise its price target for Micron -- to $1,250 per share.
What has Wolfe convinced Micron shares -- up 667% already over the past year -- can gain another 26% over the next 12 months?
Prices for DRAM and NAND keep rising, argues analyst Chris Caso. By the time 2026 is over, Caso predicts DRAM prices could be 200% higher than at the end of 2025, and NAND memory prices could soar 216%. Price inflation will continue into 2017, rising another 17% for both kinds of computer memory.
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What's next for Micron in 2027? Demand for computer memory for AI data centers remains insatiable, and with little increase in supply to keep prices in check in the near term, the analyst believes Micron could rake in as much as $226.5 billion in sales next year, and earn $135 per share in profit.
Past 2027, things become less clear, with the potential for the supply and-demand gap to start closing toward the end of that year. Should Micron and its peers remain disciplined about expanding production, however, "higher pricing [can] persist for longer" than that, "potentially into CY2028."
Long story short: Boom times for Micron could last through 2028, or even 2029 -- and there's still plenty of time to buy this growth stock.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
The S&P 500 (^GSPC +0.50%) rose 1.75% to 7,394.30, the Nasdaq Composite (^IXIC +0.31%) jumped 2.54% to 25,809.66, and the Dow Jones Industrial Average (^DJI +0.70%) climbed 1.86% to 50,848.75 as a de-escalation of U.S.-Iran tensions lead a broad rebound.
Market moversMemory stocks surged today as Micron Technology bounced almost 12% to erase this week’s losses and Sandisk gained 14%. An analyst upgrade boosted Intel by 10%. Nvidia was also in the green, as semiconductors spearheaded the tech recovery.
In what’s becoming a common occurrence for AI hyperscalers, Oracle tumbled despite an earnings beat as investors digested its guidance and spending plans. Lam Research increased on renewed AI‑hardware demand optimism.
What this means for investorsStocks recovered today as renewed hopes for a U.S.-Iran peace deal ended a two-day selloff. Even hotter-than-expected wholesale inflation data didn’t dampen investor enthusiasm. May’s Producer Price Index rose 1.1% in May, taking the annual rate to 6.5%.
President Trump said he’d canceled tonight’s planned strikes on Iran and that negotiations were progressing. WTI crude oil fell back below $90 a barrel, and U.S. Treasury yields dropped. The stock rebound is a good reminder of how quickly markets can change direction, and underscores the importance of staying invested.
What promises to be a record-breaking IPO from SpaceX tomorrow dominated headlines. The company announced it would sell 555.6 million shares at $135 each, raising $75 billion and valuing it at a whopping $1.77 trillion. While individual investors are considering whether to buy SpaceX, there’s a broader liquidity concern on Wall Street — as investors might reduce exposure to other megacap techs to free up cash for the rocket-AI-communications stock.
Emma Newbery has positions in Nvidia. The Motley Fool has positions in and recommends Intel, Lam Research, Micron Technology, Nvidia, and Oracle. The Motley Fool has a disclosure policy.
Micron Technology (MU +11.48%) and Intel (INTC +9.34%) are popular with investors right now because the artificial intelligence (AI) boom represents a significant growth opportunity for both companies. The stocks have added 228% and 192%, respectively, this year. Yet, certain Wall Street analysts think Micron and Intel are wildly overvalued.
William Kerwin at Morningstar has given Micron a target price of $500 per share. That implies 44% downside from its current share price of $898. Harlan Sur at J.P. Morgan has set a target price of $45 per share for Intel. That implies 60% downside from its current share price of $115. Those forecasts suggest investors should sell Micron and Intel. Here's why I agree.
Image source: Getty Images.
Micron Technology: 44% downside implied by Morningstar's target price Micron manufactures memory and data storage solutions built on DRAM and NAND flash technology. Its products are used in data centers, mobile devices, personal computers, and automotive systems. While Micron has benefited from a severe memory chip supply shortage tied to demand for artificial intelligence, it lacks a durable competitive advantage.
"We do not believe Micron has an economic moat," writes Kerwin at Morningstar, mentioning the capital-intensive nature of the memory chip industry and the company's mediocre profit margins. "We view DRAM and NAND as commodity-like products prone to market supply/demand dynamics and steady pricing erosion."
To understand why Micron lacks an economic moat, consider the company's most recent quarterly financial results. Revenue rose 196% to $23.8 billion and non-GAAP (adjusted) net income soared 682% to $12.20 per diluted share. Yet, Micron lost share in DRAM and NAND, while Samsung and SK Hynix gained market share.
While Micron's financial results were impressive, the strong numbers were primarily driven by price increases supported by an unprecedented supply shortage, not something unique to Micron. In fact, Samsung and SK Hynix have key advantages in greater production capacity and higher revenue, which means they have more capital to invest in research and development (R&D).
Wall Street expects the current memory chip cycle to peak in 2028, and for prices to drop sharply in 2029. In turn, the consensus estimate says Micron's adjusted earnings will grow at 13% annually through 2029. That makes the current valuation of 40 times earnings look way too expensive. Indeed, among 50 analysts, Micron has a median target price of $660 per share, implying 26% downside from its current share price of $898.
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Intel: 60% downside implied by J.P. Morgan's target price Intel's vertical integration was once a source of great strength. The company was seen as the pinnacle of semiconductor manufacturing technology because it controlled the entire pipeline, from chip design to fabrication. But Taiwan Semiconductor Manufacturing took the lead in manufacturing technology in 2017, and currently makes 95% of the most advanced chips.
Today, Intel is still the largest supplier of central processing units (CPUs). However, the company has lost substantial market share to AMD and Arm over the past decade, in both the data center server and client (personal devices) market segments, due to execution missteps and manufacturing delays.
Bulls will say Intel is on the precipice of a big turnaround. The company is pursuing a large opportunity in contract chipmaking (i.e., foundry services), and AI inference (which is much more CPU-intensive than AI training) is becoming much more common. Indeed, Intel says inference workloads surpassed training workloads last year.
However, whether Intel is actually turning its business around is debatable. The company has struggled to win major foundry customers, and its recent financial results have been uninspiring. In the first quarter, revenue increased just 7%, and the foundry segment lost $2.3 billion on $4.6 billion in sales.
Harlan Sur at J.P. Morgan Chase highlighted several problems in a recent note: "From a company fundamental perspective, the company is facing tough macro headwinds and a highly competitive compute environment exacerbated by lingering questions about its ability to execute. ... From a financial perspective, the stock should continue to be under pressure as the market continues to be concerned about the sustainability of dividend payments."
Wall Street estimates Intel's adjusted earnings will increase at 77% annually through 2027. While impressive, that forecast still makes the current valuation of 200 times earnings look very expensive. I think investors should avoid Intel, and most Wall Street analysts agree. The stock has a median target price of $96 per share, implying a 16% drop from the current share price of $115.
Analyst Forecasts Move HigherMicron received another boost from Wall Street after Wolfe Research reiterated its Outperform rating and raised its price forecast to $1,250 on Thursday. The firm cited stronger pricing expectations for both DRAM and NAND memory products.
Wolfe expects memory demand to outpace supply through at least 2027, with industry growth constrained by limited cleanroom capacity. The firm now projects fiscal 2027 revenue of $226.5 billion and earnings of $135 per share. It also expects high-bandwidth memory (HBM) pricing to increase as suppliers seek margins closer to traditional DRAM products.
The bullish call follows other recent forecast increases. On Wednesday, Goldman Sachs maintained its Neutral rating and lifted its price forecast to $900. Earlier this week, Wells Fargo reiterated its Overweight rating and raised its forecast to $1,220.
The stock currently carries a consensus Buy rating, with an average analyst price forecast of $927.29.
Earnings Remain the Next Major CatalystInvestors are now looking toward Micron’s earnings report, scheduled for June 24.
Analysts expect earnings of $19.46 per share, up sharply from $1.91 a year earlier. Revenue is projected to reach $34.07 billion, compared with $9.30 billion in the prior-year period.
Micron Technical Picture Remains BullishMicron continues to trade in a strong long-term uptrend. The stock sits 12.2% above its 20-day simple moving average of $882.85 and 162.5% above its 200-day moving average of $377.38.
The broader trend remains constructive, supported by a bullish moving-average structure. The 20-day average remains above the 50-day average, while the 50-day average stays above the 200-day average.
However, momentum has cooled. The MACD indicator remains below its signal line, suggesting upside momentum has weakened and the stock may continue consolidating after its recent rally.
The next key resistance level is near $1,089.50, close to Micron’s 52-week high zone.
MU Stock Price Activity: Micron Technology shares were trading down 0.97% at $986.23 during premarket trading on Friday, according to Benzinga Pro data.
Photo via Shutterstock
Market News and Data brought to you by Benzinga APIs
Micron Technology, Inc. (MU) shares gain 758.3% in a year, up 9,645% since Big Money’s first buy in 1994.
MU makes memory and storage solutions for AI networks, mobile, and embedded systems used by corporate and individual customers globally. The company’s second-quarter fiscal 2026 report showed $23.9 billion in revenue (a 196% year-over-year gain), non-GAAP per-share earnings of $12.20 (up 682%), and fiscal third-quarter EPS guidance of $19.15.
No wonder MU shares are up 249% so far this year – and they could rise more. MoneyFlows data shows how Big Money investors are again betting heavily on the stock.
Micron Flying High on Big Money Buys Institutional volumes reveal plenty. In the last year, MU has enjoyed strong investor demand, which we believe to be institutional support.
Each green bar signals unusually large volumes in MU shares. They reflect our proprietary inflow signal, pushing the stock higher:
Source: www.moneyflows.com Plenty of technology names are under accumulation right now. But there’s a powerful fundamental story happening with Micron.
Micron Fundamental Analysis Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, MU has had strong sales and earnings growth:
Also, EPS is estimated to ramp higher this year by +80.3%.
Now it makes sense why the stock has been generating Big Money interest. MU has a track record of strong financial performance.
Marrying great fundamentals with MoneyFlows software has found some big winning stocks over the long term.
Micron has been a top-rated stock at MoneyFlows for years. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.
It’s had 19 Big Money outlier inflow signals in the last year. The blue bar below shows when MU was a top pick…Big Money keeps buying:
Source: www.moneyflows.com Tracking unusual volumes reveals the power of money flows.
This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward.
Micron Price Prediction The MU action isn’t new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.
Disclosure: the author holds no position in MU at the time of publication.
If you are a Registered Investment Advisor (RIA) or are a serious investor, take your investing to the next level and follow our free weekly MoneyFlows insights.
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Lucas is a well-versed equity investor and educator. He currently is co-founder of research and analytics firm, MAPsignals.com, which focuses on finding outlier stocks by following the Big Money.
If you had the foresight to invest in Micron (MU 1.02%) and Sandisk (SNDK +5.26%) stock during this time last year, you look like a genius right now. Micron is up about 700%, while Sandisk is up more than 3,800%. Those are monster returns in a short time frame, and would thrill any investor.
But that doesn't matter anymore. What really matters is if these two can continue their run.
Image source: Getty Images.
Micron and Sandisk are thriving from a memory chip shortage The artificial intelligence (AI) build-out has stretched many supply chains thin. Demand for computing products has never been this high, and there isn't the capacity to fulfill the needs that the AI hyperscalers are creating. Those demands aren't likely to slow down, either. Alphabet told investors that they should expect "significantly" more in data center capital expenditures in 2027, and Nvidia informed investors that next year's hyperscaler spending could top $1 trillion, on the path to $3 trillion to $4 trillion in annual data center spending around the globe by 2030.
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Those are major growth projections, and any company involved in the AI build-out is set to experience major growth during the next few years, which bodes well for both Micron and Sandisk. These two companies both make memory chips, of which there are two primary varieties. Micron makes both NAND and DRAM, while Sandisk makes NAND. NAND memory has a higher storage capacity, but is slower than DRAM. In data center applications, it's primarily used in solid-state drives (SSDs) for long-term data storage. DRAM memory usually accompanies computing units like GPUs for quick access to information. Both of these types of memory chips are in high demand, and neither Sandisk nor Micron has the needed production capacity.
With low supply and high demand, the price of the commodity soars, which is why both Micron and Sandisk have seen unbelievable revenue and earnings growth during the past few quarters.
MU Revenue (Quarterly YoY Growth) data by YCharts
Wall Street analysts expect these incredible results to continue. For fiscal year 2027 (ending August 2027), Wall Street expects 63% revenue growth from Micron. Sandisk's projections are even higher, with its FY 2027 (ending June 2027) growth rates projected to come in at about 122%.
With long-term data center demand ahead and no chipmakers able to provide adequate supply, I'd expect memory chip prices to stay elevated for the next few years, making these stocks intriguing investments. But are they priced right?
Both Micron and Sandisk have room to run Despite both companies going on an unbelievable run during the past year, their stock valuations haven't gotten out of control because they were cheaply priced to begin with, and each has the growth to justify its current price tag.
MU PE Ratio (Forward 1y) data by YCharts
If you look at next year's earnings (forward one-year price-to-earnings ratio), each stock trades for about 9 times next year's earnings. Compared to each stock's forward P/E now, that could mean each stock can double as 2027's results are realized. Although that's not the monster returns that each stock put up during the past year, it's still a great return for just one year of buying and holding a stock.
However, these two stocks aren't set-it-and-forget-it investments. Investors will need to keep an eye on memory chip supply and demand, because if supply catches up to demand, prices could fall sharply, and these stocks could get slammed. If you're diligent, there's still a ton of money to be made here. But these two aren't for everyone due to their monitoring requirements.
Micron Technology MU drew a higher price target from Wolfe Research after the firm lifted its assumptions for memory pricing, according to an analyst note.
Wolfe increased its target on Micron to $1,250 from $550 and kept an Outperform rating. The firm said its updated model reflects sharper price gains for DRAM and NAND in calendar 2026 and 2027.
Wolfe said demand appears likely to stay ahead of supply through at least 2027 and possibly into 2028. It also said cleanroom limits may curb bit shipment growth, while high-bandwidth memory pricing could keep rising as suppliers try to narrow margin gaps.
The call adds to a series of upbeat Wall Street revisions on Micron. Susquehanna, DA Davidson and Mizuho have also lifted their targets in recent days, while Micron shares climbed about 11% on Thursday.
AI’s evolution faces several so-called bottlenecks, including constrained supply for memory semiconductors amid booming demand for those chips. For those who want to focus on domestic names with clear ties to that theme, Micron (MU) usually take the cake. However, there’s an international opportunity with the memory chip trade; two South Korean companies — Samsung and SK Hynix — are among the memory semiconductor leaders, along with Micron.
Shares of both South Korean firms are surging on the back of the memory bottleneck. That goes a long way toward explaining why the Direxion Daily South Korea Bull 3X Shares (KORU) is one of this year’s hottest leveraged ETFs. KORU attempts to deliver 300% of the daily returns of the MSCI Korea 25/50 Index, a gauge in which Samsung and SK Hynix are by far the two largest holdings.
To be sure, like any other leveraged ETF, KORU can give and take away in short order. Entering the Thursday, June 11 trading session, the ETF was down more than 24% over the prior week. But as of late June 11, the ETF had made up those losses, and then some. Clearly, it is very much a short-term instrument, not a buy-and-hold investment. Fortunately, for risk-tolerant traders, the memory chip trade has ample tailwinds, indicating plenty of potential opportunities in the back half of this year to make short-term use of the fund.
KORU Is a Demand Story Fundamentals are important in long-term investing, but they are also pertinent to assessing the short-term opportunity set for KORU. Fortunately, there’s good news on that front.
“The pressure is coming from AI infrastructure buildouts. We see servers accounting for 59 percent of DRAM demand by 2028, up from 37 percent in 2023,” noted Shawn Kim, head of Morgan Stanley’s Europe and Asia technology team. “We also see enterprise solid-state drives reaching 65 percent of NAND demand, up from 18 percent. And simply put, data centers are taking a much bigger share of the memory pie.”
Bolstering the case for stocks like Micron, Samsung and SK Hynix and thus KORU, the aforementioned crimped memory supply situation cannot be ameliorated overnight.
“This demand is running into a supply chain that cannot respond quickly. New memory capacity takes years to build, qualify and ramp up. Supply relief is a process, not a switch,” added Kim.
Bottom line: For traders that can handle the volatility, KORU merits a place on their watch lists as the memory trade gains momentum.
For more news, information, and strategy, visit the Leveraged & Inverse Content Hub.
Micron Technology (NASDAQ:MU | MU Price Prediction) is the chip stock dominating every feed after its memory business rode the AI cycle to a $1.12 trillion market cap and a 760.37% one-year run.
But here’s what you should actually be watching.
The Crowded Trade at the Top of the Cycle Memory margins do not stay at 74% forever. Micron just reported fiscal Q2 2026 revenue of $23.86 billion, up 196.3% YoY, with GAAP gross margin of 74.4% against a multi-year base where memory margins regularly compress below 30% in downcycles. Capex hit $15.86 billion in fiscal 2025 and is still climbing. CEO Sanjay Mehrotra himself flagged “dependence on sustained AI demand trajectory” as a key risk.
That is a textbook peak-cycle setup wearing AI clothes. The stock is up 249.09% year to date. Reddit’s wallstreetbets has been flooded with posts like “+6,476.76% gain on MU LEAPS, should I sell?” When LEAPS screenshots dominate the feed, the crowd has already arrived. You are the exit liquidity. Prediction markets confirm the fatigue: traders price only a 43% probability of MU closing June above $1,000.
The Redirect: A Record-Breaking Cloud Powerhouse on Sale Oracle (NYSE:ORCL) just delivered a record fiscal Q4 on June 10, 2026, then sold off 22.1% in a week to $184.10. That is the contrarian’s window.
Three reasons retirement-focused investors should pay attention while the herd is distracted:
1. Backlog visibility memory will never match. Oracle’s Remaining Performance Obligations hit $638 billion in Q4, up 363% YoY, with $75 billion tied to prepaid or customer-supplied GPU arrangements. Memory ships and reprices quarterly. Oracle has years of revenue already under contract. Safra Catz called the trajectory “an astonishing quarter” back in September, when RPO was a mere $455 billion.
2. Structural shift, recurring revenue. Cloud is now 52% of total revenue versus 43% a year ago. Cloud Infrastructure revenue grew 93% YoY to $5.787 billion. Multicloud AI Database grew 404% in Q4. Oracle monetizes the same AI buildout lifting Micron, just through subscriptions instead of spot pricing.
3. Guidance raised into the pullback. FY27 non-GAAP EPS guidance was raised to $8.05, representing 18% growth, with FY27 revenue confirmed at $90 billion. Q1 FY27 cloud revenue growth is guided at 58%-64%. The stock has been re-rated lower while forward estimates moved higher. That is a classic contrarian entry.
The Honest Risks, and Why They Don’t Break the Thesis Free cash flow ran to negative $23.686 billion for FY26 on $55.663 billion of capex. Oracle plans to raise roughly $40 billion in FY27 through debt and equity. That is the cost of building 211+ live and planned cloud regions and 72 Multicloud datacenters embedded inside Amazon, Google, and Microsoft. Customers are funding much of it directly. The capacity, per co-CEO Clay Magouyrk, is “all already contracted for at a very profitable rate.”
And while the infrastructure compounds, Oracle declared a $0.50 quarterly dividend on June 10, payable July 24. Income, plus a re-rating opportunity. Exactly what a retirement portfolio is built around.
Put Oracle on the watchlist while the headlines chase Micron at $995.87.
On June 3, Micron Technologies (MU 1.02%) hit an all-time high of $1,079. The move capped off months of explosive gains as investors started pivoting away from chipmakers like Nvidia in favor of the memory hardware producers poised to benefit from the changing dynamics of artificial intelligence (AI) infrastructure demand.
While graphics processing units (GPUs) are still important, data center clients are recognizing they need huge amounts of storage to keep up with the requirements of increasingly complex AI models. Let's dig deeper to see how much longer this trend might last and decide if Micron stock can maintain its explosive rally or will eventually slow down.
Image source: Getty Images.
The memory shortage is still in full swing As of June 2026, the global memory hardware shortage remains in effect, as data center clients continue to buy high-bandwidth memory (HBM) and advanced DRAM practically as fast as it can be produced. Suppliers like Micron are shifting production capacity toward these parts of the market, leading to shortages of less advanced hardware.
The memory crunch is affecting many parts of the economy. This month, groups representing automakers and retailers sent a letter to the U.S. Treasury and Commerce departments warning of "significant and sustained near-term price increases" for a variety of consumer goods. But while they see the issue as a challenge for their supply chains, it has become a historic windfall for Micron and other industry leaders.
Second-quarter revenue soared a blistering 196% year over year to $23.86 billion, driven by strength across Micron's operating segments. Meanwhile, gross margins rose from 36.8% to 74.7% -- a level typically seen in software companies that don't even sell physical products. The combination of soaring revenue and margins drove the company's profits to explode 770% to $13.78 billion.
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Instead of returning the windfall to investors in dividends or buybacks, Micron plans to invest in itself through a $200 billion build-out to expand its manufacturing capacity in the U.S.
Is a macroeconomic time bomb on the horizon? This month, the Consumer Price Index (CPI) inflation reading rose to 4.2%, which represents the highest level in three years. This situation is linked with the ongoing war in Iran, which has spiked energy costs. But the memory shortage could soon start helping push consumer prices even higher, leading to another inflation crisis for an economy that never fully recovered from the first one after the COVID-19 pandemic.
While Micron is in a good position right now, the macroeconomic situation is becoming so strained that it might not escape unscathed. The first challenge will be interest rates, which may have to rise to keep inflation under control. Higher rates make capital and borrowing more expensive, which reduces the amount of money investors are willing to bet on growth stocks. These fears are likely behind the recent dip in Micron and other tech stocks following the latest jobs and inflation data.
The second big risk is demand destruction, which occurs when prices get so high that consumers start delaying purchases or seeking substitutes. While it may take a long time for this to affect Micron's well-capitalized data center clients, it could happen much sooner in other memory markets, like smartphones, personal computers, and cars, especially as regular people are already being squeezed by inflation.
It's time to take profits Investors who bought Micron stock 12 months ago have now made a return of almost 700%. And while continued growth is possible amid the ongoing chip shortage, the potential risks are starting to outweigh the rewards as concerns about inflation and rising rates begin to mount. Investors should consider taking profits and sitting on the sidelines until there is more clarity on the worsening macroeconomic situation.
Key Takeaways Micron expects fiscal Q3 2026 revenues of $33.5B and gross margin near 81%. NVDA posted record fiscal Q1 2027 revenues of $81.6B and projects $91B for Q2. MU trades at 16.65 forward earnings versus NVDA's higher multiple of 22.97. Riding the artificial intelligence (AI) boom, Sanjay Mehrotra-led Micron Technology (MU - Free Report) outpaced Jensen Huang-led NVIDIA Corporation (NVDA - Free Report) over the past year, rising 761.5% compared to NVIDIA’s 44.3%. Let us thus see how both companies performed and whether Micron holds an investment edge over NVIDIA –
Image Source: Zacks Investment Research
The Bullish Case for MU Stock Micron reported revenues of $23.86 billion in the fiscal second quarter of 2026 and expects revenues to improve further to $33.5 billion in the fiscal third quarter, according to investors.micron.com. As hyperscalers increase their spending on AI infrastructure, Micron’s advanced high-bandwidth memory (“HBM”) chips are witnessing high demand, supporting revenue growth.
The present supply-demand imbalance in HBM chips gives Micron strong pricing power and underpins a strong long-term growth outlook. Nonetheless, the HBM chips are in demand due to their capability to manage complex workloads while delivering improved power efficiency.
Also, constrained supply in NAND flash chips is expected to continue through the middle of next year, which could further boost margins. Micron expects a solid gross margin of around 81% for the fiscal third quarter of 2026, showcasing strong financial momentum.
The Bullish Case for NVDA Stock NVIDIA’s latest strong Data Center performance demonstrated its position as a leader in hyperscale AI infrastructure investment worldwide. In the fiscal first quarter of 2027, NVIDIA’s Data Center segment generated a record $75.2 billion in revenues, up 92% year over year and 21% sequentially, according to nvidia.news.nvidia.com.
NVIDIA reported revenues of $81.6 billion in the fiscal first quarter of 2027, a new record, up 85% from a year ago and 20% sequentially. Despite its massive size, NVIDIA’s revenues continue to grow, driven by strong demand for its cutting-edge AI chips, networking solutions, and data center infrastructure that support large-scale AI training and inference workloads. NVIDIA projects fiscal second-quarter of 2027 revenues of $91 billion, plus or minus 2%.
Additionally, NVIDIA continues to deliver strong margins, reflecting its pricing power in graphics processing units (GPUs) and AI accelerators, while maintaining sustained demand for its products across the AI and data center markets. For the fiscal first quarter of 2027, NVIDIA’s non-GAAP gross margin was 75%, and is expected to remain near 75% for the fiscal second quarter of 2027, a tell-tale sign that the company is capable of maintaining strong profitability.
Micron Has the Edge: Why It’s a Better AI Buy Than NVIDIA Now Strong AI-infrastructure demand is currently driving the bullish outlook for both Micron and NVIDIA. However, Micron appears to offer a more attractive valuation than NVIDIA at the current levels.
Per the price/earnings ratio, MU trades at 16.65 forward earnings compared with NVDA’s forward earnings multiple of 22.97. Since NVIDIA trades at a premium valuation, the company needs to deliver strong growth to justify further upside. On the other hand, Micron can outperform through steady and sustainable earnings growth.
Image Source: Zacks Investment Research
Additionally, Micron is no longer viewed as a traditional cyclical memory company; it has elevated itself to become a key supplier in the AI infrastructure ecosystem. Micron has sold a significant amount of its HBM capacity through 2026 amid strong AI-driven demand. The HBM supply constraint has given the company a strong pricing power, boosting profit margins, improving revenue visibility and creating further upside potential for the stock.
In contrast, much of NVIDIA’s strong quarterly performance already appears reflected in its share price, and the ongoing China-related export curbs could create pressure on future growth. Therefore, currently Micron looks like the more compelling investment opportunity.
While Micron has a Zacks Rank #1 (Strong Buy), NVIDIA has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Micron Technology MU shares edged lower on Friday as investors weighed valuation concerns and rising expectations ahead of the memory-chip maker’s upcoming earnings report.
However, demand for artificial intelligence-related memory products continued to support the company’s long-term growth outlook.
Micron stock fell 1.43% on Friday after Goldman Sachs raised its price target on the company but maintained a Neutral rating, highlighting the increasingly bullish sentiment surrounding the stock ahead of its June 24 earnings release.
The memory-chip manufacturer has been one of the key beneficiaries of the AI infrastructure boom, particularly through demand for high-bandwidth memory (HBM) products used in advanced AI systems.
Despite Friday’s decline, Micron shares have gained roughly 15% over the past five trading sessions, recovering from recent volatility across the semiconductor sector.
Goldman Sachs analyst James Schneider increased his price target on Micron to $900 from $400 while maintaining a Neutral rating on the stock.
The analyst cited elevated investor expectations as a reason for caution heading into the company’s earnings report later this month.
"We believe investor positioning remains very bullish given the dramatic share price run-up and optimism around the potential impact of long-term customer agreements," Schneider wrote.
Micron continues to trade at a relatively low valuation compared with broader technology stocks.
According to FactSet data cited in the report, Micron traded at approximately 10.2 times forward earnings as of Thursday’s close, compared with 24.8 times for the Nasdaq Composite.
Goldman Sachs based its new price target on an earnings multiple of 18 times Schneider’s normalized earnings-per-share estimate of $50.
The analyst expects Micron’s earnings, which have been boosted by strong HBM demand, to peak in fiscal 2027 at $138.86 per share.
"We expect the stock debate to continue to center primarily on long-term customer agreements and the sustainability of DRAM pricing strength; any future commentary regarding HBM progress and share targets will be in focus," Schneider wrote.
Earnings expectations remain highInvestor attention is now firmly focused on Micron’s June 24 earnings report, which is expected to provide further insight into demand trends across the AI memory market.
Analysts currently forecast earnings of $19.46 per share, a significant increase from $1.91 per share reported during the same period a year ago.
Revenue is projected to reach $34.07 billion, compared with $9.30 billion in the prior-year quarter.
The expected growth reflects continued strength in demand for memory chips used in AI servers and data-center infrastructure, where Micron has become an increasingly important supplier.
At the same time, investors are closely monitoring pricing trends in the DRAM market, which has historically experienced significant cyclical swings.
The stock continues to trade well above key moving averages, sitting approximately 12.2% above its 20-day simple moving average and 162.5% above its 200-day moving average.
The broader moving-average structure also remains bullish, with the 20-day average above the 50-day average and the 50-day average above the 200-day average.
However, some momentum indicators suggest the recent rally may be cooling.
The MACD indicator remains below its signal line, indicating that upside momentum has weakened and that the stock could continue consolidating following its strong gains.
The next major resistance level is near $1,089.50, close to Micron’s 52-week high, as investors await the company’s earnings results and updates on AI-related memory demand.
Listen to the audio version of this article (generated by AI).
Everyone wants to find the next Nvidia – legendary investor Louis Navellier thinks a better question might be: Can you hold it once you do?
In today’s Friday Digest takeover, Louis explains why today’s AI boom reminds him of the internet buildout of the late 1990s. Not because he sees a bubble, but because he sees the same mix of massive infrastructure spending, rapid growth, and investors getting shaken out by volatility.
He highlights several companies benefiting from the AI buildout beyond the usual headline names and argues that the opportunity remains much broader than most investors realize.
Most importantly, Louis says the biggest challenge isn’t identifying the trend – it’s staying invested when the market gets choppy.
If you missed it, he expanded on these ideas in a presentation with TradeSmith CEO Keith Kaplan this past Wednesday, where the two discussed a new AI-powered approach to navigating volatility. You can watch the replay right here.
Bottom line: If Louis is right, the investors who benefit most from the AI boom won’t be the ones who find the trend first – but the ones who stick with it.
I’ll let Louis take it from here.
Have a good evening,
Jeff Remsburg
“How much would it cost me to buy you?”
That’s how Cisco Systems Inc. (CSCO) CEO John Chambers greeted the founder of telecom startup Cerent Corp. in 1999.
Not his company. You.
Cerent had only about $10 million in annual sales, but Cisco paid roughly $6.9 billion in stock because Chambers believed the technology and that founder were critical to the internet buildout.
At the time, Chambers had a simple solution whenever he found a bottleneck:
Buy it.
By the late 1990s, the internet was growing so fast that Cisco couldn’t build products quickly enough to keep up. So it started buying competitors, technologies, and choke points throughout Silicon Valley.
That strategy helped make Cisco the most valuable company in the world for a brief moment in March 2000.
Most people remember what happened next. I remember what came before.
The internet buildout was real. Networks got built, servers got installed, and infrastructure spending exploded. Investors who understood that trend made fortunes.
I’ve been thinking about Cisco lately because we’re watching the same movie again.
The AI buildout is real. First-quarter S&P 500 earnings grew nearly 29% from a year ago — more than double what analysts expected. Analysts keep revising estimates higher. The spending behind this is staggering and it’s accelerating.
That’s what I want to talk about today.
In this piece, I’ll show you four stocks prospering from the AI buildout beyond Nvidia and Micron…
Why I believe this infrastructure boom is still early…
And why the hardest part of the AI trade isn’t finding the right companies. It’s staying with them.
Everybody Wants the Next Nvidia I’ve been investing through major technology shifts for nearly five decades. I was using computers to analyze stocks in the 1970s, long before it became common on Wall Street. Over the years, my quantitative systems helped identify winning stocks such as Apple Inc. (AAPL) and Nike Inc. (NKE) — and Nvidia Corp. (NVDA) and Microsoft Corp. (MSFT) — long before they became household names.
In the late 1990s, everybody wanted the next internet stock. Today, everybody wants the next AI stock.
That’s understandable. Nvidia has become one of the most successful investments in modern market history.
But investors often become so focused on one company that they miss the broader trend unfolding around it.
Artificial intelligence is no longer just a Nvidia story. There are a lot more AI-related stocks prospering now. Memory companies, networking companies, power-generation companies (we used to call those “utilities”)… all are benefiting.
Why? Because AI requires an enormous amount of infrastructure.
The average investor sees ChatGPT or Claude on their browser and thinks software. I see hundreds of billions of dollars flowing into an entirely new computing architecture.
To appreciate the scale, one proposed AI data-center project in Utah would cover nearly three times the area of Manhattan. Similar projects are being planned across the country. These facilities will require thousands upon thousands of chips, servers, and networking systems.
That’s why companies like Micron Technology Inc. (MU) have become so important.
Most investors still think of it as a cyclical memory-chip company from the middle of the country. But on May 26, Micron became Boise, Idaho’s first trillion-dollar company.
Wall Street sees something different. Sales are expected to grow more than 250%. Earnings are expected to rise more than 900%.
Those aren’t normal numbers. They’re what happens when a major technological shift is underway and demand overwhelms supply. Micron has reportedly sold out much of its high-bandwidth memory production under long-term contracts, and analysts expect supply shortages to persist for years.
It’s also why I want you to pay attention to companies like Dell Technologies Inc. (DELL), Hewlett Packard Enterprise Co. (HPE), Ciena Corp. (CIEN)… and, yes, Cisco. These aren’t the first names investors think about when they hear “AI,” but they’re increasingly prospering from the buildout.
The opportunity is getting bigger. Not smaller. When a major investment theme spreads beyond a handful of stocks and starts lifting entire industries, it usually means the trend is becoming more durable and more profitable — not less.
That’s what we’re seeing right now.
The Real Risk Isn’t What Most Investors Think I focus on a combination of fundamental and quantitative measures — sales growth, earnings growth, analyst revisions, institutional buying pressure. That’s how my Stock Grader system has identified winning stocks for well over 40 years.
And right now, those indicators continue to point in the right direction. I think many of the best AI and data-center stocks still have substantial upside ahead of them before the year is over.
But being bullish doesn’t mean being complacent.
The spending behind this boom is staggering. Microsoft, Amazon.com Inc. (AMZN), Alphabet Inc. (GOOG), and Meta Platforms Inc. (META) are expected to spend roughly $700 billion on AI infrastructure this year alone. That’s data centers, networking equipment, chips, power generation, and everything needed to support the next generation of AI applications.
Those aren’t startup projections. They’re some of the largest and most successful companies in the world committing enormous capital because they believe AI will reshape the global economy.
The biggest risk facing investors right now isn’t that AI suddenly becomes less popular. It’s not that companies stop spending on data centers. And it’s not that earnings suddenly collapse.
The bigger risk is that investors get shaken out of fundamentally superior stocks during perfectly normal periods of volatility.
I’ve seen it happen throughout my career. A stock pulls back. The headlines get scary. Investors become nervous. They sell. Six months later, the stock is substantially higher.
The late 1990s were full of those moments. Even the biggest winners experienced sharp pullbacks from time to time. Investors who stayed focused on the long-term trend were rewarded. Investors who reacted emotionally often weren’t.
I think we’re approaching a similar period now. The market remains healthy, but summer can get bumpy. Trading volume thins out. Volatility increases. Short sellers become more aggressive.
That’s normal.
And it’s one reason I’ve been spending so much time with Keith Kaplan and the team at TradeSmith. Over the past year, Keith and I have been exploring a new AI-enhanced approach that combines my Stock Grader system with TradeSmith’s pattern-recognition technology. What interested me wasn’t the technology itself. It was the results.
More importantly, it showed how investors can stay with opportunities like Dell, HPE, Ciena, and Cisco when volatility inevitably shows up. Because the hard part isn’t finding promising AI stocks anymore. The trend is staring us in the face. The hard part is staying invested when the headlines turn negative and investors start questioning the same companies they loved a month earlier.
That’s exactly what Keith and I discussed earlier this week.
In our free, special presentation, we show investors how we’re using AI to become more tactical and amplify the gains you can make with the stocks I recommend.
You can watch a replay of the event right here.
Whether it’s Micron, Dell, HPE, Ciena, Cisco — or another company prospering from the AI buildout — the opportunity is still much bigger than most investors realize.
Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task.
That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.
However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks.
Intuitive Surgical, Inc. (ISRG - Free Report) is one such stock that our proprietary system currently recommends. The company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Studies have shown that stocks with the best growth features consistently outperform the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
While there are numerous reasons why the stock of this company is a great growth pick right now, we have highlighted three of the most important factors below:
Earnings GrowthEarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. For growth investors, double-digit earnings growth is highly preferable, as it is often perceived as an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Intuitive Surgical is 14.3%, investors should actually focus on the projected growth. The company's EPS is expected to grow 16.5% this year, crushing the industry average, which calls for EPS growth of 10.7%.
Cash Flow GrowthCash is the lifeblood of any business, but higher-than-average cash flow growth is more beneficial and important for growth-oriented companies than for mature companies. That's because, high cash accumulation enables these companies to undertake new projects without raising expensive outside funds.
Right now, year-over-year cash flow growth for Intuitive Surgical is 15.8%, which is higher than many of its peers. In fact, the rate compares to the industry average of -0.9%.
While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 19.5% over the past 3-5 years versus the industry average of 7.5%.
Promising Earnings Estimate RevisionsBeyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend is a plus here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
The current-year earnings estimates for Intuitive Surgical have been revising upward. The Zacks Consensus Estimate for the current year has surged 0.8% over the past month.
Bottom LineWhile the overall earnings estimate revisions have made Intuitive Surgical a Zacks Rank #2 stock, it has earned itself a Growth Score of B based on a number of factors, including the ones discussed above.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination positions Intuitive Surgical well for outperformance, so growth investors may want to bet on it.
Current Chief Commercial and Marketing Officer Henry Charlton to become SVP of Global Business Operations Current Chief Commercial and Marketing Officer Henry Charlton to become SVP of Global Business Operations
Intuitive Surgical (ISRG 0.45%) is a very particular kind of stock. It pays no dividend, so income investors won't appreciate today's investment opportunity. It isn't cheap, so value investors will not like it either. It is a growth stock, most appropriate for those with a more aggressive streak.
The opportunity today is Intuitive Surgical's roughly 30% decline in stock price since the start of 2026. Here's why this drawdown may be a rare buying opportunity for this top surgical robotics stock.
Image source: Getty Images.
What does Intuitive Surgical do? Intuitive Surgical makes the da Vinci surgical robot system. At the end of the first quarter of 2026, there were 11,395 systems in place around the world, up 12% from the first quarter of the previous year. Simply put, despite the stock decline, the medical device maker's product continues to sell well.
However, there's a second measure that's worth considering. The number of procedures using a da Vinci system increased 17% year over year. That means that more and more surgeries are being performed with a da Vinci robot. So patient demand is strong, as well.
These trends will ebb and flow from quarter to quarter. However, the big picture is very clear. Intuitive Surgical's business is fundamentally sound. This is why investors are willing to pay a premium for the stock. Its price-to-earnings ratio is a lofty 51x, a figure that will only interest more aggressive growth investors. That said, the P/E is well below its five-year average of 70x.
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The opportunity isn't in the sale of Intuitive Surgical's robots What's interesting here, however, is that Intuitive Surgical generates only about 25% of its revenue from da Vinci system sales. The rest comes from what amounts to parts (instruments and accessories) and services. That is the flywheel of the business, and given the demand for robotic surgery, it is an annuity-like revenue stream. That revenue stream grows more attractive with each new da Vinci installation. This isn't just a fundamentally sound business; it is a strong business. And the da Vinci system continues to evolve, gaining regulatory approval for use in more and more types of surgery. That offers another avenue for long-term growth.
And yet the stock has fallen 30% in a very short period of time. Growth investors need to step back and put that drop into perspective. As the chart below highlights, this healthcare company's stock has declined by at least 30% eight times since its initial public offering. It recovered after each drop and went on to post new highs. While there's no way to know if that will happen this time, and some of the drops went well beyond 30%, if history is any guide, this drawdown will be temporary.
ISRG data by YCharts
Stepping in while Intuitive Surgical's shares appear to be in free fall won't be easy. It requires a great deal of faith in the business's underlying strength. But the sale of new systems remains robust, and parts and services revenue is driven by the still strong demand among patients for robotic surgery. Even if sales of new da Vinci systems slow, the large installed base will still generate significant revenue for the company.
Nothing has changed about Intuitive Surgical, but investor perception Intuitive Surgical's business isn't likely to fall off a cliff, which means this drawdown could be another temporary blip in the stock's long-term uptrend. Such drawdowns have happened before, but they aren't exactly everyday events. Which is why more aggressive growth investors may want to take advantage of what appears to be a rare buying opportunity in this top robotic surgery stock.
Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool recommends the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.
Intuitive Surgical, Inc. (ISRG - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this company have returned -7.2%, compared to the Zacks S&P 500 composite's +6.3% change. During this period, the Zacks Medical - Instruments industry, which Intuitive Surgical falls in, has gained 3.3%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Intuitive Surgical is expected to post earnings of $2.48 per share, indicating a change of +13.2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $10.4 points to a change of +16.5% from the prior year. Over the last 30 days, this estimate has changed +0.1%.
For the next fiscal year, the consensus earnings estimate of $11.71 indicates a change of +12.6% from what Intuitive Surgical is expected to report a year ago. Over the past month, the estimate has remained unchanged.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Intuitive Surgical.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Intuitive Surgical, the consensus sales estimate for the current quarter of $2.81 billion indicates a year-over-year change of +15%. For the current and next fiscal years, $11.72 billion and $13.18 billion estimates indicate +16.5% and +12.4% changes, respectively.
Last Reported Results and Surprise HistoryIntuitive Surgical reported revenues of $2.77 billion in the last reported quarter, representing a year-over-year change of +23%. EPS of $2.5 for the same period compares with $1.81 a year ago.
Compared to the Zacks Consensus Estimate of $2.61 billion, the reported revenues represent a surprise of +6.24%. The EPS surprise was +20.19%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Intuitive Surgical 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 Intuitive Surgical. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
On June 02, 2026, we present a DCF analysis for Intuitive Surgical Inc (ISRG), a company that has faced significant price performance challenges recently, with
Key Takeaways Intuitive Surgical fell 11% in a month despite 23% Q1 2026 revenue growth and raised guidance.Intuitive Surgical placed 232 da Vinci 5 systems, with utilization running about 11% above Xi.Intuitive Surgical saw 19% international procedure growth and 39% growth in Ion procedures. Shares of Intuitive Surgical (ISRG - Free Report) have come under pressure recently, declining roughly 11% over the past month despite the company delivering another strong quarter. The weakness appears to be driven more by broader market concerns, valuation compression and worries surrounding global healthcare spending than by any deterioration in the company’s operating performance.
ISRG stock has underperformed its closest peers, Medtronic (MDT - Free Report) and Stryker (SYK - Free Report) , over the past month. Over the same period, shares of Medtronic have lost 5.8%, while those of Stryker have gained 0.8%.
Intuitive Surgical entered 2026 with considerable momentum. The robotic-surgery pioneer reported first-quarter 2026 revenue growth of 23% to $2.77 billion, supported by 17% total procedure growth, continued adoption of the da Vinci 5 platform and strong expansion of its Ion lung-biopsy business. Management was sufficiently confident in underlying trends to raise its full-year procedure growth outlook.
YTD Price Comparison
Image Source: Zacks Investment Research
With the stock pulling back while fundamentals remain strong, investors are increasingly asking whether a reversal could be on the horizon.
Growth Drivers That Could Fuel a Recoveryda Vinci 5 Continues to Drive Adoption and Utilization: The biggest growth catalyst for Intuitive Surgical remains the rollout of the da Vinci 5 surgical platform. During the first quarter, the company placed 232 da Vinci 5 systems, bringing the installed base to nearly 1,500 systems. Management highlighted that utilization on da Vinci 5 systems is approximately 11% higher than the Xi platform, helping hospitals improve throughput and efficiency.
The platform is also creating a favorable upgrade cycle as hospitals replace older systems. New force-feedback instruments, expanded procedure clearances and increasing surgeon adoption should continue supporting growth throughout 2026.
Digital Ecosystem and AI Create a Long-Term Moat: A key differentiator for Intuitive Surgical is the digital ecosystem being built around its robotic platforms. Management emphasized that da Vinci 5 is generating large-scale surgical data that can be leveraged for AI-enabled anatomy identification, workflow optimization, decision support and eventually aspects of automation.
The company’s growing installed base, millions of annual procedures and proprietary datasets provide a foundation that competitors may struggle to replicate. This data flywheel could become one of Intuitive Surgical’s strongest competitive advantages over the next decade.
Strong International and Procedure Growth: Procedure growth remains healthy across most markets. In the first quarter of 2026, da Vinci procedures increased 16%, while Ion procedures surged 39%. Outside the United States, da Vinci procedures grew 19%, with particularly strong performance in India, Canada, the United Kingdom, Korea and Taiwan. Procedures outside the U.S. market now represent 38% of total da Vinci volume, highlighting the growing importance of international markets.
The company also raised its 2026 da Vinci procedure growth forecast to 13.5-15.5%, signaling confidence in sustained demand.
Emerging Growth Platforms: Beyond its flagship system, Intuitive Surgical is seeing rapid growth in its single-port (SP) platform and Ion business. SP procedures rose 68%, while Ion continues to benefit from increasing adoption in lung cancer diagnosis. The company is also developing technologies such as ROSE and endobronchial ultrasound integration that could further strengthen Ion’s clinical value proposition.
Estimate Revision Trend for ISRGEstimates for Intuitive Surgical’s 2026 earnings have moved up 14.9% to $10.40 per share over the past year, while the same for 2027 earnings has improved 11.4% to $11.71. The positive estimate revision depicts bullish sentiments for the stock.
Image Source: Zacks Investment Research
Valuation and CompetitionEven after the recent pullback, Intuitive Surgical continues to command a premium valuation. The stock currently trades at a forward 12-month P/E ratio of 36.73, above the industry average of 24.75. However, it remains significantly below its five-year median multiple of 70.02, suggesting valuation has become more reasonable compared with historical levels. Currently, Medtronic and Stryker trade at 12.06X and 18.71X, respectively.
P/E F12M of ISRG vs MDT & SYK
Image Source: Zacks Investment Research
Competition remains a factor, particularly in international markets. Management highlighted continued pricing pressure and increasing domestic competition in China, where local robotic-surgery manufacturers are gaining traction.
Intuitive Surgical maintains a formidable competitive moat through its installed base, surgeon training ecosystem, extensive clinical evidence and growing digital infrastructure. Few rivals can match its scale, procedural experience and breadth of product offerings.
Challenges That Could Limit UpsideDespite strong fundamentals, several headwinds remain. Intuitive Surgical continues to experience lower tender activity, competitive pricing pressure and policy-related uncertainties in China. Japan is also recovering from a period of weak system placements, and management remains cautious about hospital spending trends in that market.
GLP-1 obesity drugs continue to weigh on bariatric procedure volumes, which declined approximately 10% in the first quarter. Tariffs, freight costs and semiconductor-memory inflation may also pressure margins during the remainder of 2026.
ConclusionWhile ISRG’s recent decline may appear concerning on the surface, its underlying business remains exceptionally strong. Robust procedure growth, accelerating da Vinci 5 adoption, expanding AI and digital capabilities, and growing international penetration continue to support a favorable long-term outlook.
Although challenges persist in China, Japan and certain procedure categories, Intuitive Surgical’s competitive position remains among the strongest in medical technology. With its valuation now well below historical averages and operational momentum remaining strong, the recent pullback may present a buying opportunity rather than a cause for concern.
Intuitive Surgical currently carries a Zacks Rank #2 (Buy), supported by a Growth Score and Momentum Score of B, suggesting improving earnings trends and positive trading momentum. Although its Value Score of D still reflects a premium valuation, the recent fall has made the stock considerably cheaper. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For investors, Intuitive Surgical appears to be an attractive stock at current levels, particularly for those seeking exposure to the long-term growth potential of robotic-assisted surgery and AI-enabled healthcare technologies.
Intuitive Surgical, Inc. (ISRG - Free Report) ended the recent trading session at $407.29, demonstrating a +1.24% change from the preceding day's closing price. The stock exceeded the S&P 500, which registered a loss of 0.74% for the day. On the other hand, the Dow registered a loss of 1.21%, and the technology-centric Nasdaq decreased by 0.89%.
The company's shares have seen a decrease of 10.87% over the last month, not keeping up with the Medical sector's loss of 0.49% and the S&P 500's gain of 5.39%.
The upcoming earnings release of Intuitive Surgical, Inc. will be of great interest to investors. The company's upcoming EPS is projected at $2.48, signifying a 13.24% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $2.81 billion, showing a 15% escalation compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $10.4 per share and revenue of $11.72 billion. These totals would mark changes of +16.46% and +16.47%, respectively, from last year.
Investors should also take note of any recent adjustments to analyst estimates for Intuitive Surgical, Inc. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been a 0.05% rise in the Zacks Consensus EPS estimate. Intuitive Surgical, Inc. is holding a Zacks Rank of #2 (Buy) right now.
In the context of valuation, Intuitive Surgical, Inc. is at present trading with a Forward P/E ratio of 38.68. For comparison, its industry has an average Forward P/E of 21.61, which means Intuitive Surgical, Inc. is trading at a premium to the group.
Investors should also note that ISRG has a PEG ratio of 2.65 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Medical - Instruments stocks are, on average, holding a PEG ratio of 2.13 based on yesterday's closing prices.
The Medical - Instruments industry is part of the Medical sector. This group has a Zacks Industry Rank of 152, putting it in the bottom 38% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
Shares of robotic-surgery pioneer Intuitive Surgical (ISRG 0.45%) have been pummeled in 2026, down about 26% and trading not too far from a 52-week low as of this writing. That has wiped nearly a third of the stock's value since it peaked above $600 in January, leaving it far behind the broader market this year.
Two worries appear to be driving the sell-off. One is competition out of China, where homegrown surgical robots are gaining ground quickly. The other is newer and louder: OpenAI's late-May move into building its own robots, which has stoked fears that the artificial intelligence (AI) giant could one day push into robotic surgery.
So, with the stock this beaten down, is it time to buy?
Image source: The Motley Fool.
The business keeps strengthening It helps to first check whether anything has actually broken in the underlying business.
And rest assured, it hasn't.
In the first quarter of 2026, Intuitive reported revenue of $2.77 billion, up 23% year over year. The telling detail is that revenue climbed faster than the 17% growth in worldwide procedures on the company's da Vinci and Ion systems.
As the newer da Vinci 5 -- now nearly 1,500 systems in use -- takes a larger share of placements, it commands higher prices, while instrument and accessory revenue per procedure climbed to about $1,880 versus roughly $1,780 a year earlier.
Also worth noting, recurring revenue now impressively accounts for 86% of Intuitive Surgical's total sales.
Placements held up as well.
Intuitive placed 431 da Vinci systems in the quarter, up from 367 a year earlier, and its installed base grew 12% to 11,395 systems.
Further, the company's non-GAAP (adjusted) operating margin reached 39%, and adjusted earnings per share jumped 38%.
Management even lifted its full-year outlook, now guiding for da Vinci procedure growth of 13.5% to 15.5%.
The competition picture The China worry, however, is worth keeping an eye on. But it's not as big an issue as an investor new to the stock might assume.
Sure, Intuitive said its China procedure growth ran below the corporate average last quarter, held back by light tender activity and government-driven pricing pressure amid domestic rivals' share gains. And those rivals are advancing. In 2025, Chinese-made laparoscopic robots outsold imported ones in public tenders for the first time.
But China is a small piece of Intuitive's business. The company placed just 4 da Vinci systems there last quarter, against 226 in the U.S. and 117 in Europe, and total procedures outside the U.S. still grew 20%.
The OpenAI fear, on the other hand, may simply be overdone.
OpenAI's robotics effort, announced on May 31, targets general-purpose humanoid machines -- robots to help with construction and infrastructure now, and household tasks later. That is a different world from soft-tissue surgery, where Intuitive's moat rests on more than 11,000 installed systems and a two-decade head start in clinical evidence and regulatory clearances that an entrant would need years to match. OpenAI has no surgical product and has not even disclosed a hardware partner for its humanoid push. Intuitive Surgical CEO Dave Rosa has instead pointed to Intuitive's own surgical data -- the millions of procedures and force-feedback streams coming off da Vinci 5 -- as the foundation for its AI roadmap.
Of course, the real worry may be more subtle. Perhaps the fact that OpenAI is getting into robotics has some investors worried that AI will lower the barriers to entry for other healthcare companies to compete more directly with Intuitive Surgical in minimally invasive surgery. Still, there's no substance behind this potential threat yet.
With all of this said, there are still risks and legitimate concerns. Bariatric procedures, for instance, fell about 10% in the U.S. as GLP-1 weight-loss drugs cut into demand. And tariffs, along with higher memory and freight costs, are pressuring margins.
Today's Change
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-0.45
%) $
-1.84
Current Price
$
411.06
The shares aren't cheap either. At a price-to-earnings ratio of about 51 as of this writing, this valuation leaves almost no room for slip-ups of any kind over the long haul.
Still, for investors who can tolerate the volatility associated with a highly valued growth stock, this could be a reasonable entry point for a small starter position into a dominant, fast-growing business, as businesses as high quality as Intuitive Surgical rarely trade at valuations that look attractive.
Do you want to buy some quality growth stocks, but don't want to pay a steep premium to do so? Below, I've got a list of three terrific stocks that are trading lower recently and that have hit new 52-week lows.
Intuitive Surgical (ISRG 0.45%), Mastercard (MA +0.53%), and T-Mobile US (TMUS +1.69%) have been struggling of late, but here's why now can be a great time to add them to your portfolio.
Image source: Getty Images.
Intuitive Surgical Shares of healthcare company Intuitive Surgical have fallen by 27% thus far in 2026. The company is a leader in the robotic-assisted surgery market, but the stock may have been coming under pressure due to its high valuation. In the past, it wouldn't have been uncommon to see it trading at more than 70 times its trailing earnings. Today, it's down to around 50, and on a forward basis, it's trading at a multiple of around 40 (based on analyst projections for its earnings in the year ahead).
It may not seem like a huge bargain, but that may prove to be the case in the long term. Robotic-assisted surgery is still a fairly small slice of the healthcare market; analysts at Grand View Research estimate the global surgical robot market was worth just $6.6 billion last year. And even though it's expected to grow significantly, by 2033, they project it'll be worth $18.5 billion, which still isn't terribly large.
Today's Change
(
-0.45
%) $
-1.84
Current Price
$
411.06
Over the very long term, there may be much more growth ahead, which is why Intuitive Surgical could make for an intriguing long-term holding. Its da Vinci systems have been generating strong demand despite their high costs, and in just the span of three years, the company's revenue has grown from $6.2 billion (in 2022) to more than $10 billion this past year.
The stock has recently hit a new 52-week low, and it's also around its two-year low. Now could be a great time to add it to your portfolio.
T-Mobile US T-Mobile's stock has also been falling this year; it's down 13% thus far. The wireless network operator prides itself on being the "un-carrier" by being different from its rivals and prioritizing customer satisfaction. It has been doing well this year, and during the first three months of 2026, its revenue rose by an impressive rate of around 11%.
While competition is normally intense in the telecom industry, T-Mobile has done an excellent job of continuing to grow over the years. The stock has fallen to a new 52-week low this week amid a broader decline in telecom stocks, as fears heighten about the possible disruption that SpaceX may cause. It's a concern, but I think it's a premature one at this stage. T-Mobile's business is massive and has the resources to be able to compete aggressively against rivals, as it has demonstrated in the past.
Today's Change
(
1.69
%) $
3.14
Current Price
$
188.96
With its decline in value, you can now buy T-Mobile stock at a relatively modest forward price-to-earnings (P/E) multiple of 17, which is well below the S&P 500 average of 22.
Mastercard Financial stocks such as Mastercard have been struggling this year due to concerns about possible caps on credit card interest rates. However, nothing has panned out, and there's no indication that Mastercard's business is in serious trouble.
For investors, this is still an excellent growth stock to invest in. Demand remains strong as the company continues to be a leader in the credit card industry. Revenue for the first three months of 2026 totaled $8.4 billion and was up 16% year over year. Profits surged by even more, 18%, totaling $3.9 billion.
Today's Change
(
0.53
%) $
2.59
Current Price
$
489.10
This is the type of company that can succeed regardless of economic conditions, which is why it can be a no-brainer buy when it's on sale. And today it is. Now, it's trading at a forward P/E of 24, which is lower than what it has averaged in the past. That's a solid price for a top growth stock.
These companies seem to have what it takes to perform well over decades, through ups and downs. Each has grown huge by executing their plans successfully and adapting to change.
Key Takeaways Intuitive Surgical posted a 39% adjusted operating margin in Q1 2026 amid tariff pressures.Adjusted gross margin rose 140 bps to 67.8% as cost reductions and volume leverage offset tariffs.ISRG expects tariff, freight and memory cost pressure, but drives efficiency gains across operations. Intuitive Surgical (ISRG - Free Report) delivered another quarter of impressive profitability in the first quarter of 2026, demonstrating how its scale and operational discipline continue to support earnings growth despite a challenging cost environment. Amid ongoing tariff pressures and emerging inflationary headwinds, the company reported an adjusted operating margin of 39%, driven by robust procedure growth, higher recurring revenues and increasing adoption of its latest platforms.
At the gross margin level, performance was equally encouraging. Adjusted gross margin expanded to 67.8%, up 140 basis points from the year-ago period’s level, despite the impact of tariffs. Management attributed the improvement primarily to product cost reductions and leverage from higher production volumes, which more than offset tariff-related costs during the quarter.
The company also noted that the da Vinci 5 system achieved contribution margins comparable to the mature Xi platform, while the Ion platform’s contribution margins approached the corporate average, reflecting meaningful manufacturing and engineering improvements.
Although margins are improving, cost pressures are likely to continue amid geopolitical uncertainty and the rising cost of raw materials. Intuitive Surgical expects a greater impact from higher oil prices, semiconductor memory costs and freight expenses over the remainder of 2026. ISRG’s updated guidance assumes approximately 100 basis points of tariff-related pressure, along with additional inflation from logistics and memory components. These factors remain key variables to monitor as the year progresses.
The company’s response is centered on scale and continuous cost improvement. Management highlighted ongoing initiatives to leverage fixed overhead, improve da Vinci 5 product and service margins, and reduce manufacturing costs for the SP and Ion platforms. Additionally, a favorable product mix, including increasing adoption of premium-priced da Vinci 5 systems and higher recurring revenues from instruments, accessories and services, is supporting profitability.
While tariffs and input inflation remain headwinds, Intuitive Surgical’s first-quarter results suggest that operational leverage, product innovation and manufacturing efficiency are currently more than offsetting those pressures. This is likely to help the company in sustaining industry-leading margin profile.
Peer UpdateStryker’s (SYK - Free Report) is focusing on operational discipline and cost containment to improve margins amid near-term disruptions. The company’s first-quarter adjusted operating margin declined 180 basis points due to cyberattack-related manufacturing inefficiencies, tariff headwinds and lower absorption of fixed costs.
However, management emphasized that continued cost discipline and operational excellence initiatives partially offset these pressures and remain critical to restoring profitability. Stryker expects to maintain its long-term margin expansion trajectory, targeting more than 150 basis points of cumulative improvement over its planning horizon.
Procurement teams are actively mitigating inflationary pressures from higher oil and other input costs through supplier contracts and sourcing initiatives, while productivity gains and sales recovery should improve manufacturing leverage in the second half of 2026.
Zimmer Biomet (ZBH - Free Report) is leveraging structural cost improvements to support margins while funding strategic growth investments. Management highlighted operational excellence as a key pillar, with initiatives focused on expanding manufacturing into lower-cost geographies, reducing inventory levels and accelerating SKU rationalization. These actions are expected to strengthen the company’s already strong margin profile and improve cash conversion over time.
In the first quarter, adjusted gross margin reached 73%, benefiting from favorable product mix and tariff-related gains, while adjusted operating margin remained solid at 27.3% despite increased spending on commercial transformation and sales-force specialization. By streamlining operations and optimizing its manufacturing footprint, Zimmer Biomet aims to offset pricing pressure, absorb investment costs and sustain profitability as it executes its multiyear growth strategy.
ISRG’s Price Performance, Valuation and EstimatesShares of ISRG have lost 26.1% so far this year compared with a 16.3% decline for the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, Intuitive Surgical trades at a forward price-to-earnings ratio of 38.15, above the industry average. But it is still lower than its five-year median of 70.02. ISRG carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Intuitive Surgical’s 2026 earnings implies a 16.5% rise from the year-ago period’s level.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Intuitive Surgical, Inc. (ISRG - Free Report) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.
The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.
Since a changing earnings picture is a powerful factor influencing near-term stock price movements, the Zacks rating system is very useful for individual investors. They may find it difficult to make decisions based on rating upgrades by Wall Street analysts, as these are mostly driven by subjective factors that are hard to see and measure in real time.
Therefore, the Zacks rating upgrade for Intuitive Surgical basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.
Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.
Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Intuitive Surgical imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.
Harnessing the Power of Earnings Estimate RevisionsEmpirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, so it could be truly rewarding if such revisions are tracked for making an investment decision. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .
Earnings Estimate Revisions for Intuitive SurgicalThis company is expected to earn $10.40 per share for the fiscal year ending December 2026, which represents no year-over-year change.
Analysts have been steadily raising their estimates for Intuitive Surgical. Over the past three months, the Zacks Consensus Estimate for the company has increased 5.1%.
Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
The upgrade of Intuitive Surgical to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.
Recently, Zacks.com users have been paying close attention to Intuitive Surgical (ISRG). This makes it worthwhile to examine what the stock has in store.
