Track market-moving stories before they get noisy

Key Takeaways KKR's Q2 EPS is estimated to be $1.42, suggesting a marginal year-over-year increase.Revenues are projected to rise 18.5% y/y, supported by higher AUM and management fees.Higher employee compensation, commission and fundraising-related expenses may weigh on results. KKR & Co. Inc. (KKR - Free Report) is slated to report second-quarter 2026 results on July 30, 2026, before the opening bell. Its earnings and revenues in the to-be-reported quarter are expected to have increased year over year.

In the last reported quarter, the company's earnings surpassed the Zacks Consensus Estimate. Its results benefited from higher assets under management (AUM) and transaction fees in the capital markets business. However, higher expenses acted as a headwind.

The company boasts an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average beat being 3.82%.

Earnings & Sales Estimates for KKRThe Zacks Consensus Estimate for earnings for the second quarter of 2026 is pegged at $1.42 per share, which has been revised upward over the past week. The figure indicates marginal growth from the year-ago quarter's reported figure.

The consensus estimate for sales for the second quarter of 2026 is pegged at $1.52 billion, reflecting a 18.5% year-over-year increase.

KKR & Co.'s Recent DevelopmentsIn May 2026, KKR completed its previously announced acquisition of Arctos Partners, expanding its presence in sports franchise investing and enhancing its GP solutions and secondaries capabilities. The transaction aligns with KKR's long-term strategy to scale its asset management platform and achieve at least $1 trillion in AUM by 2030.

The acquisition strengthens KKR's sourcing capabilities across private markets and expands its relationships with sports industry participants. It is also expected to enhance its wealth and institutional distribution capabilities, with perpetual and long-dated capital projected to account for nearly 53% of its $759 billion AUM.

Now, let us discuss the factors that are likely to have influenced KKR's second-quarter performance.

Key Factors & Estimates for KKR in Q2KKR has been witnessing growth in fee-earning AUM and total AUM, supported by its diversified product and revenue mix, strong position in the alternative investments space and steady net inflows. With client activity remaining robust during the second quarter, the company is expected to have recorded further growth in AUM, driven by stronger inflows.

The Zacks Consensus Estimate for AUM is pegged at $782.4 billion, suggesting a rise of 14.1% from the prior-year quarter. Likewise, the consensus estimate for fee-paying AUM is pegged at $636.4 billion, indicating a 14.4% year-over-year increase.

The Zacks Consensus Estimate for management fees (segment revenues) for the to-be-reported quarter is pegged at $1.17 billion, suggesting growth of 17.6% from the prior-year quarter. The consensus estimate for fee-related performance revenues (segment revenues) of $98.17 million implies an increase of 82.7% on a year-over-year basis.

Additionally, KKR is expected to have generated profits from deal exits during the to-be-reported quarter. Based on the company's preliminary estimate for the period between March 31 and June 24, 2026, total realized performance income and net realized investment income are expected to exceed $900 million, up from $475 million in the prior-year quarter.

Talking about expenses, KKR is likely to have reported elevated expenses in the to-be-reported quarter, due to higher employee compensation, commission and reinsurance expenses. The company anticipates expenses to remain elevated as placement fees increase with continued fundraising activity.

What Our Model Predicts for KKROur proven model does not conclusively predict an earnings beat for KKR this time. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you can see below.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for KKR is -2.53%.

Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here.

Performance of KKR's PeersBlackRock’s (BLK - Free Report) second-quarter 2026 adjusted earnings of $13.91 per share handily surpassed the Zacks Consensus Estimate of $12.72. The figure reflects a 15% rise from the year-ago quarter.

BLK’s results benefited from a rise in revenues. The AUM balance witnessed robust year-over-year growth, driven by net inflows, to record levels. However, higher expenses created a headwind.

Blackstone’s (BX - Free Report) second-quarter 2026 distributable earnings of $1.52 per share outpaced the Zacks Consensus Estimate of $1.33. The figure soared 26% from the prior-year quarter.

BX’s results benefited from a rise in AUM and higher revenues. An increase in GAAP expenses was the undermining factor.

Key Takeaways Rigetti's Q2 results may show remaining Novera revenues and early traction for the 108-qubit Cepheus-1.Investors will watch cloud usage, contracts and progress toward 99.5% two-qubit gate fidelity.RGTI targets a 150-qubit system and a 1,000-qubit quantum advantage platform within roughly three years. Rigetti Computing’s (RGTI - Free Report) second-quarter 2026 results, scheduled to report on Aug. 6, after market close, are likely to underscore continued commercial traction rather than a dramatic financial inflection. Investors are likely to primarily focus on whether the company recognized the remaining revenues from previously announced Novera quantum processing unit orders. Management had guided that the amount would largely be booked in the second quarter after partial recognition in the first quarter.

Another key area of interest is likely to be the customer adoption of the newly launched 108-qubit Cepheus-1 system across Rigetti Quantum Cloud Services, Amazon Braket, Microsoft Azure Quantum and qBraid. On its first-quarter earnings call, management commented that early customer interest and system usage had been encouraging. Investors will also watch for updates on cloud utilization trends, additional government or research contracts and the pace of commercial engagement as enterprises continue evaluating hybrid quantum-classical computing applications.

Beyond quarterly numbers, investors will be looking for progress on Rigetti's technology roadmap. The focus will particularly be on efforts to improve Cepheus-1's two-qubit gate fidelity toward the company's 99.5% target later this year. Investors will also monitor progress on Rigetti's roadmap to launch a 150-qubit system and ultimately achieve a 1,000-qubit quantum advantage platform within roughly three years. Since the first-quarter report, Rigetti has further strengthened its commercial positioning through continued momentum in government-backed quantum initiatives, including execution of its C-DAC program in India and expansion of its global footprint.

Investors will also watch for additional Novera system wins, progress on the company's planned U.K. investment and advances in error mitigation through partnerships such as Riverlane and NVIDIA. Updates on the timing of the higher-fidelity 108-qubit system and the next-generation 150-qubit platform could also serve as key drivers of investor sentiment.

While operating losses are expected to remain elevated as Rigetti continues to prioritize R&D investments, investors will closely monitor the company's progress toward key technology milestones and customer adoption. The company's strong cash position and debt-free balance sheet should provide the financial flexibility needed to execute its long-term quantum computing roadmap.

Peers UpdatesIonQ's (IONQ - Free Report) second-quarter 2026 results, scheduled for Aug. 5, are expected to highlight continued commercial execution as the company expands its quantum networking and computing footprint. Investors are likely to focus on bookings growth, customer additions and progress integrating recent acquisitions, alongside updates on government and enterprise contracts. Commentary around the company's roadmap toward fault-tolerant quantum systems and the pace of quantum networking deployments could also be key catalysts.

D-Wave Quantum (QBTS - Free Report) second-quarter 2026 earnings, scheduled to be reported on Aug. 6, are expected to reflect continued demand for its annealing quantum computing platform and expanding commercial adoption. Investors will watch for growth in quantum optimization revenues, customer wins and increased usage of its Leap quantum cloud service. Updates on the commercialization of its next-generation Advantage2 system, along with customer traction across logistics, manufacturing and government markets, will likely be closely monitored.

Rigetti’s Price Performance, Valuation and EstimatesShares of RGTI have lost 36.2% in the year-to-date period compared with the industry’s decline of 11.9%.

Image Source: Zacks Investment Research

From a valuation standpoint, Rigetti trades at a price-to-book ratio of 8.06, above the industry average. RGTI carries a Value Score of F.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Rigetti’s 2026 earnings implies a significant 71.9% improvement from the year-ago period.

Image Source: Zacks Investment Research

The company currently has a Zacks Rank #3 (Hold).

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

Key Takeaways SIMO to report Q2 2026 earnings on July 29 with consensus sales of $403.6 million and EPS of $2.13.SIMO expanded enterprise SSD shipments and saw steady demand from AI infrastructure investments.Silicon Motion gained from broader controller adoption and PCIe Gen5 SSD demand across key markets. Silicon Motion Technology Corporation (SIMO - Free Report) is scheduled to report second-quarter 2026 earnings after the closing bell on July 29. The Zacks Consensus Estimate for sales and earnings is pegged at $403.6 million and $2.13 per share, respectively. Earnings estimates for SIMO for 2026 have increased 7.1% to $8.96 over the past 60 days, and those for 2027 have increased 14.6% to $11.98.

SIMO Estimate Trend
Image Source: Zacks Investment Research

Earnings Surprise HistoryThe leading NAND flash controller designer has a modest trailing four-quarter earnings surprise history, having exceeded expectations on three occasions. It delivered a four-quarter earnings surprise of 18.61%, on average. In the last reported quarter, the company delivered an earnings surprise of 20.61%.

Image Source: Zacks Investment Research

Earnings WhispersOur proven model predicts a likely earnings beat for SIMO for the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Silicon Motion currently has an ESP of +7.68% and sports a Zacks Rank #1. You can see the the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping Upcoming ResultsDuring the quarter, Silicon Motion has strengthened its enterprise storage business through the production ramp of its MonTitan enterprise SSD controller, which supported commercial shipments to customers. The company also benefited from steady demand for enterprise boot drive solutions as cloud service providers continued investing in artificial intelligence (AI) infrastructure and next-generation data centers. Healthy customer demand, an improving product mix and strong business visibility are expected to have supported revenue growth in the second quarter of 2026.

Silicon Motion's embedded storage business continued to gain market share through broader adoption of its eMMC and UFS controllers, driven by new customer wins and expanding product adoption. Healthy demand for PCIe Gen5 SSD controllers is likely to have supported shipments across client and enterprise markets as customers upgraded to higher-performance storage platforms. These trends are likely to have a positive impact on the June-quarter revenues.

During the quarter under review, Silicon Motion benefited from expanding customer programs across cloud, enterprise and industrial markets, supporting broader adoption of its storage controller solutions. Ongoing production ramps and commercial shipments across multiple applications, along with the company's broad customer base and diversified storage portfolio, are expected to have strengthened revenue contributions during the second quarter.

Price PerformanceOver the past year, SIMO has surged 244.6% compared with the industry’’s growth of 195.6%. It has outperformed peers like Marvell Technology, Inc. (MRVL - Free Report) , but underperformed Western Digital Corporation (WDC - Free Report) over this period. While Marvell has gained 157.4%, WDC jumped 646.2%.

Image Source: Zacks Investment Research

Key Valuation MetricFrom a valuation standpoint, Silicon Motion appears to be trading at a premium relative to the industry and above its mean. Going by the price/earnings ratio, the company shares currently trade at 25.36 forward earnings, higher than 12.38 for the industry and the stock’s mean of 19.

Image Source: Zacks Investment Research

Investment ConsiderationsSilicon Motion is well-positioned to benefit from long-term growth in the global storage industry as increasing data generation, AI adoption and digital transformation continue to drive demand for faster and more efficient storage solutions. The company's strong technology expertise and focus on innovation provide a solid foundation for sustainable revenue and earnings growth.

The company’s disciplined execution, long-standing customer relationships and continued investment in advanced controller technologies reinforce its competitive position. These strengths should enable the company to capitalize on evolving storage requirements and support sustainable long-term shareholder value.

End NoteSilicon Motion's long-term growth prospects remain encouraging, supported by favorable trends in the storage semiconductor industry. Its consistent execution, expanding presence in higher-value storage markets and ability to address evolving customer requirements reinforce its growth outlook. As demand for advanced storage solutions continues to rise across multiple end markets, the company is well-positioned to deliver sustainable financial performance. With favorable industry trends, a strong technology portfolio and a Zacks Rank #1, SIMO remains an attractive investment choice for long-term investors.

Key Takeaways FLG reported Q2 EPS of 5 cents, missing estimates, while shares plunged 5.9%.FLG's NII rose 5% y/y, while lower expenses and provisions supported results.Flagstar announced a $250 million share repurchase program and reported higher loan and deposit balances. Shares of Flagstar Bank, National Association (FLG - Free Report) plunged 5.9% in Friday’s trading session on lower-than-expected quarterly results. Its second-quarter 2026 adjusted earnings per share of 5 cents missed the Zacks Consensus Estimate of 6 cents. In the year-ago quarter, the company had incurred a loss of 14 cents.

Results were primarily affected by lower non-interest income. However, higher net interest income (NII), lower expenses and a decline in provisions for credit losses offered some support.

Results excluded certain non-recurring items. After considering this item, net income available to common shareholders on a GAAP basis was $26 million against a net loss of $78 million in the prior-year quarter.

FLG’s Quarterly Revenues Rise & Expenses DeclineQuarterly revenues of $516 million missed the Zacks Consensus Estimate of $545 million by 5.3%. The metric rose 4% from the prior-year quarter.

NII was $440 million, up 5% year over year. The net interest margin of 2.13% expanded 32 basis points from the year-ago quarter, driven by lower deposit and borrowing costs, partially offset by lower earning-asset yields.

Non-interest income was $76 million, down 1% from the year-ago quarter. The decrease was mainly due to lower gains on loan sales and securitizations and reduced other income, partly offset by higher fee income and bank-owned life insurance income.

Non-interest expenses of $450 million decreased 12% year over year. Adjusted operating expenses were $427 million, down 7% from the second quarter of 2025, reflecting lower FDIC insurance, compensation and benefits, professional services, and general and administrative costs.

Flagstar Financial’s Loans & Deposits IncreaseTotal loans and leases held for investment increased 1% sequentially to $60.9 billion as of June 30, 2026. The increase was due to solid commercial and industrial loan growth, partly offset by continued reductions in multi-family and commercial real estate portfolios.

As of June 30, 2026, total deposits increased 1% sequentially to $67.5 billion. Growth was driven by higher Commercial and Private Bank deposits, along with core deposits.

FLG’s Credit Quality ImprovesNon-accrual loans held for investment were $2.8 billion, down 12% from $3.2 billion as of June 30, 2025.

Net charge-offs were $100 million, down 15% year over year.

The company recorded a provision for credit losses of $18 million, down 72% from $64 million in the year-ago quarter.

Flagstar Financial’s Capital Ratios StrengthenAs of June 30, 2026, the common equity tier 1 ratio was 13.16% compared with 12.33% as of June 30, 2025. The total risk-based capital ratio increased to 16.58% from 15.77% in the year-ago quarter.

The leverage capital ratio rose to 9.70% from 8.61% a year ago, reflecting improved capital strength.

The company also announced a $250-million share repurchase program, citing progress in executing its strategic plan, a strong capital position and a positive long-term outlook.

Our View on FLGFlagstar Financial’s solid C&I loan and deposit growth, lower funding costs, expense discipline and reduced commercial real estate exposure remain encouraging. The company delivered positive operating leverage, supported by higher NII and substantially lower credit provisions and expenses from the year-ago period.

However, lower non-interest income remains a concern. Continued execution on commercial banking expansion, operating efficiency initiatives and revenue diversification will be key to sustaining earnings improvement.

Performance of Other BanksZions Bancorporation’s (ZION - Free Report) second-quarter 2026 adjusted earnings of $1.74 per share surpassed the Zacks Consensus Estimate of $1.57. Moreover, the bottom line increased 10.1% from the year-ago quarter.

ZION’s results were primarily aided by higher net interest income and growth in non-interest income. Higher sequential loan balance was another positive. However, a rise in non-interest expenses hurt the results to some extent.

Commerce Bancshares Inc.’s (CBSH - Free Report) second-quarter 2026 earnings of $1.10 per share surpassed the Zacks Consensus Estimate of $1.04. The bottom line reflected a rise of 1% from the prior-year quarter.

CBSH’s results primarily benefited from higher NII and a rise in non-interest income. The sequential rise in loan balances acted as a tailwind. However, higher expenses and provisions hurt CBSH’s results to some extent.

There is a spending contest underway in big tech, and Apple (AAPL +0.80%) has declined to enter it.

Alphabet lifted its 2026 capital spending plan to a top end of $205 billion last week. Amazon expects to invest about $200 billion this year, Microsoft has pointed to roughly $190 billion, and Meta Platforms plans as much as $145 billion. Together, that's more than $700 billion in a single year, the great majority of it aimed at AI (artificial intelligence) infrastructure.

Apple's capital expenditures in fiscal 2025 were $12.7 billion. In other words, the world's largest consumer technology company is spending a fraction of what those four rivals will spend, combined, while they race to add AI computing capacity.

So is Apple's restraint a capital-allocation edge, or a company in denial about what AI requires? With Apple's fiscal third-quarter report due Thursday, July 30, it's the right week to ask.

Image source: Apple.

Renting the build-out instead of funding it Apple's small budget isn't an accident. It reflects a deliberate structure.

On the company's fiscal first-quarter earnings call, chief financial officer Kevan Parekh described a "hybrid" capital model, in which Apple leverages "a combination of first and third-party capacity." In other words, Apple rents much of its computing power from cloud computing providers rather than building data centers itself, and when it does build for AI, it runs the servers on its own chips. That's the basis of Private Cloud Compute, the infrastructure behind Apple Intelligence.

The structure means Apple can access third-party capacity without carrying the full construction bill. And if computing gets cheaper as all of that new supply comes online, renters could benefit first. Whether the access holds up at scale is the open question the next few years will answer.

Meanwhile, the strategy shows up where shareholders can see it. In the March quarter, Apple generated more than $28 billion in operating cash flow, a record for the period -- and with capital spending under $3 billion, nearly all of it was free cash flow. Compare that with Alphabet, whose free cash flow was negative $5.9 billion in its most recent quarter, or Amazon, whose trailing-12-month free cash flow has fallen to $1.2 billion as its capital spending climbs.

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Discipline is winning so far Restraint would mean little if Apple's business were stalling. It isn't.

Fiscal second-quarter revenue rose 17% year over year to $111.2 billion, and earnings per share climbed 22% to $2.01. iPhone revenue hit $57 billion, a March-quarter record, up 22% year over year on demand for the iPhone 17 lineup. Services set an all-time revenue record. For perspective, Apple's revenue grew about 6% in all of fiscal 2025 -- so growth hasn't just held up under the low-spend strategy, it has accelerated sharply.

That's the case for discipline. The case for denial is worth taking seriously, too.

Apple's approach partly depends on third-party capacity in a world where computing power is scarce -- its rivals are spending those hundreds of billions precisely because demand keeps outrunning supply. If AI features become the deciding factor in phone and device purchases, and if delivering them requires more compute than Apple can rent or build quickly, the company could find itself paying up later at worse prices. That scenario can't be ruled out, and it's the main thing I'll be listening for on the July 30 call. Apple's own capital spending rose in fiscal 2025, with Parekh noting the company built out its Private Cloud Compute environment last year.

And the stock leaves little room for the strategy to fail. Shares trade near $333 as of this writing, just below their record high, at about 40 times earnings.

My verdict leans toward discipline. Apple is growing faster than it has in years and generating record cash, while its rivals bear the cost, and the risk, of their own infrastructure build-outs. If the strategy proves wrong, Apple has the cash flow to change course and pay up later. If it proves right, shareholders will never have paid for the detour.

Thursday's report offers the next test. Another quarter of double-digit growth alongside a capital spending line that remains tiny next to its peers' would be the strategy working, measurably. I own the stock, and nothing about the $700 billion around it makes me want to change that.

Key Takeaways Microsoft guided Azure and cloud revenue growth of 39-40% in constant currency for the quarter.MSFT expanded AI offerings with Microsoft IQ, Foundry updates and new Azure infrastructure.Microsoft entered fiscal Q4 with AI demand exceeding capacity as capital spending remained elevated. Microsoft's (MSFT - Free Report) fourth-quarter fiscal 2026 results, scheduled to be reported on April 29, are likely to be driven by steady growth in its cloud platform, Azure.

The quarter unfolded against a backdrop of surging AI consumption, expanding agentic platforms and persistent capacity constraints that had defined the company's cloud narrative through fiscal 2026.

Click here to know how the company’s overall fiscal fourth-quarter performance is likely to have been.

Azure Guidance and CapacityManagement's guidance, issued alongside third-quarter fiscal 2026 results, called for Azure and other cloud services revenues to grow 39% to 40% in constant currency, consistent with the third quarter's pace. Intelligent Cloud revenues were guided between $38 billion and $38.3 billion. Leadership indicated on the prior call that Azure capacity was expected to remain constrained through the remainder of 2026, even as dock-to-live times for new GPUs improved and additional capacity came online, with modest acceleration anticipated in the second half of the calendar year. Capital expenditure, including finance leases, was expected to exceed $40 billion for the quarter, supporting the buildout underpinning that growth.

AI Monetization SignalsHeading into the fiscal fourth quarter, Microsoft's annualized AI revenue run rate stood above $37 billion, having grown 123% year over year in the third quarter, while Copilot paid seats had surpassed 20 million. Momentum in Copilot usage was described by leadership as running on a different trajectory across coding, productivity and security, a trend that fourth-quarter commercial activity appeared to extend. Microsoft 365 Copilot E7, the Frontier Suite bundling Microsoft 365 E5, Copilot and Agent 365, reached general availability on May 1, alongside Agent 365 itself, giving enterprise customers a consolidated agentic offering. Deployments tied to these products, including a large-scale Copilot rollout across Atos Group's workforce announced in June, offered early evidence of enterprise uptake during the quarter.

Platform and Model ExpansionThe quarter featured several developments that should enhance Microsoft's competitive position against other cloud giants, including Alphabet's (GOOGL - Free Report) Google, Amazon (AMZN - Free Report) and Oracle (ORCL - Free Report) .

At Microsoft Build in early June, the company introduced Microsoft IQ, unifying Work IQ, Fabric IQ and Foundry IQ to give agents shared, governed context across Microsoft's data estate, with Work IQ reaching general availability during the month. Foundry agents gained the ability to publish directly into Microsoft 365 Copilot and Teams, also reaching general availability in June, while additional third-party models became generally available within Microsoft Foundry, broadening the multi-model options available to enterprise builders alongside new in-house MAI models. The Azure Cobalt 200 Arm-based virtual machine entered early access preview, offering up to 50% better generational performance for agentic workloads, and GPU-accelerated capabilities were added to Fabric Data Warehouse. Infrastructure additions included a planned datacenter expansion in Cheyenne, Wyoming, announced in April, and a new East US 3 Azure region alongside additional availability zones across existing U.S. regions.

Balancing Demand Against CostCollectively, these developments pointed to broadening AI adoption across coding, productivity and infrastructure layers, supporting the case for Azure growth holding near the guided range. Yet the pace of platform expansion also reinforced that capital intensity was not easing, with billing shifts such as GitHub Copilot's move to usage-based pricing in June adding a variable that could influence near-term consumption trends without yet being reflected in comparable prior-period figures.

Investment PerspectiveMicrosoft entered its fourth-quarter fiscal 2026 report with Azure demand still outpacing supply and AI annualized revenues expanding rapidly, supported by a wave of agentic platform launches and multi-model expansion through Foundry. Enterprise deployments and new infrastructure announced during the quarter reinforced the demand narrative, but continued capacity constraints and an elevated capital expenditure run rate kept the durability of AI-driven margins as the central open question ahead of results. MSFT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Johnson & Johnson's MedTech sales rose 4.5% to $8.93B in Q2 but slightly missed consensus estimates.JNJ expects stronger H2 MedTech growth despite softer Abiomed demand and ongoing China VBP headwinds.Johnson & Johnson expects new OTTAVA and VARIPULSE launches to support MedTech growth in H2. Johnson & Johnson's (JNJ - Free Report) medical devices segment, known as MedTech, offers products in the orthopedics, surgery, cardiovascular and vision markets. The MedTech segment accounts for around 36% of J&J’s total revenues. In MedTech, J&J is a global leader in electrophysiology, circulatory restoration and heart recovery.

The MedTech segment delivered a mixed performance in the second quarter of 2026, with growth remaining positive but below the pace seen in its Innovative Medicines business.

Q2 Numbers of J&J’s MedTech SegmentJ&J’s MedTech segment underperformed in the second quarter despite overall solid results. Sales rose 4.5% to $8.93 billion, with operational growth of 3.6%, but slightly missed the Zacks Consensus Estimate of $8.96 billion.

The shortfall was largely due to weaker Cardiovascular performance. Operational sales in the Cardiovascular business grew 3.1%. However, the growth was slower than prior trends due to competitive pressure in the electrophysiology business and decline in Abiomed sales, partially offset by continued double-digit growth in Shockwave.

Shockwave revenues rose 14.6% to $335 million. Electrophysiology sales increased 3.1%, supported by procedure growth and new products but were hurt by competitive pulsed field ablation (PFA) pressures and unfavorable China inventory dynamics.

Abiomed sales declined 2% due to slow procedural volumes for the Impella heart pump franchise. Abiomed procedure volumes were hurt by uncertainty among physicians after a U.K. study questioned the benefit of using Impella devices in certain high-risk procedures. J&J believes this led to slower Impella usage as doctors reassessed patient selection for the device. J&J believes this is a temporary issue and is working with physicians to ensure the device is used in the right patients based on its existing clinical evidence. However, Abiomed sales in outside U.S. markets remained strong.

Nonetheless, while J&J’s Cardiovascular sales slowed down in the second quarter due to weakness in Abiomed, its other three businesses, Surgery, Vision and Orthopedics, all accelerated in the quarter and performed above expectations.

Worldwide Surgery grew 3.9%. Worldwide Orthopedics rose 4.9% and Worldwide Vision rose 6.0% in the second quarter.

While Abiomed procedures slowed, J&J claimed that overall procedure volumes were stable and there was no broad-based slowdown in medical procedure volumes across its MedTech business. J&J clarified that although some large U.S. hospitals have reported weaker volumes for certain elective procedures, those trends are not reflected in its own business. J&J also said that the expiration of Affordable Care Act (ACA) subsidies has not had any meaningful impact on procedure volumes so far and is unlikely to affect MedTech demand materially.

The company continues to face headwinds in China from the government's volume-based procurement (VBP) program and expects these pressures to continue through 2026, particularly in the second half.

Outlook for J&J’s MedTech in H2Reflecting these challenges, J&J tempered its outlook for Abiomed, now expecting only modest growth in the second half of 2026 rather than the stronger rebound it had previously anticipated, with the impact of the U.K. study likely to persist until PROTECT IV study data are presented in 2027. PROTECT IV is a large clinical study of the company’s Impella device in high-risk percutaneous coronary intervention.

Despite the Abiomed challenges, J&J remains optimistic about MedTech's trajectory in the second half of 2026. J&J expects its MedTech business to perform better in the second half of the year than it did in the first half, driven by strength in Vision, Orthopedics, Surgery and better performance in Cardiovascular. While the Abiomed softness creates a new overhang, it is only 2% of sales, and J&J has various other top-line drivers to compensate.

The FDA recently approved J&J’s OTTAVA robotic surgical system which is considered a key new product in its portfolio, along with the VARIPULSE pulsed field ablation system for atrial fibrillation. Increased adoption of these newly launched products should contribute to better growth in the second half.

J&J’s Key Competitors in the Medical Devices MarketJ&J’s MedTech unit faces strong competition from several major players in the medical device industry like Medtronic (MDT - Free Report) , Abbott,Stryker (SYK - Free Report) and Boston Scientific (BSX - Free Report) .

While Medtronic has a strong presence in cardiovascular, neuroscience and surgical technologies, Stryker is a major player in orthopedics and surgical equipment. Boston Scientific markets products for cardiovascular, endoscopy, urology and neuromodulation. Abbott is known for its medical devices across cardiovascular, diagnostics, and diabetes care. 

JNJ’s Price Performance, Valuation and EstimatesJ&J’s shares have outperformed the industry so far this year. The stock has risen 28.7% this year compared with a 14.5% appreciation of the industry. 

Image Source: Zacks Investment Research

From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 21.39 forward earnings, higher than 19.06 for the industry. The stock is also trading above its five-year mean of 15.65.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for 2026 earnings has risen from $11.58 per share to $11.65 per share over the past 30 days, while that for 2027 earnings has gone up from $12.65 per share to $12.80 over the same time frame.

Image Source: Zacks Investment Research

J&J has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

by Kurt Schlosser on Jul 27, 2026 at 10:31 amJuly 27, 2026 at 10:35 am

Starbucks was using technology from Redmond-based NomadGo to automate how workers counted inventory items. (Starbucks Photo) When Starbucks scrapped an AI-powered inventory counting tool back in May, just nine months after revealing the new system, it landed as a surprise to those tracking the coffee giant’s high-tech ambitions. A new report from Fast Company tells the inside story of how the national rollout disintegrated — and why the Redmond, Wash.-based startup behind it was left “blindsided.”

Known as “Automated Counting,” the tool was built in partnership with NomadGo to scan backroom storage shelves using iPad Pros equipped with computer vision, spatial computing, and augmented reality. It was designed to automatically tally coffee bags, milk, syrups, and other key supplies.

The idea was to turn an hour-long manual chore into a 10-to-12-minute job so baristas could focus on making drinks and connecting with customers.

The technology was deployed rapidly across all 11,300 company-operated Starbucks locations in North America. But almost immediately, real-world store environments triggered rampant glitches, according to Fast Company.

Baristas reported camera errors — such as shiny refrigerator reflections doubling milk counts or the app misidentifying syrups and trash cans — while stores with spotty Wi-Fi frequently had their counting progress wiped out entirely mid-scan.

According to Fast Company, the technical breakdowns stemmed from both software limitations and outdated infrastructure. While NomadGo’s computer vision achieved 99% accuracy in controlled tests, CEO David Greschler noted that computer vision inherently struggles when inventory changes — requiring up to six weeks of retraining for seasonal holiday cups or limited-time packaging that NomadGo developers sometimes only learned about once items hit store shelves.

Compounding the problem, people involved in building the tool pointed to Starbucks’ backend network, which relies on a legacy IBM AS/400 system dating back to the 1990s, making it difficult for cutting-edge AI to process real-time store data reliably.

When Starbucks notified NomadGo on April 3 that it was pulling the plug, the startup was reportedly blindsided. Greschler called the decision “a complete surprise,” telling Fast Company that “there’s nothing you can do when leadership and strategy change.”

Within days of losing its centerpiece enterprise client, NomadGo was forced to lay off a large chunk of its 30-person workforce, according to the report, including the technical team that managed the Starbucks integration. Six weeks later, on May 18, Starbucks formally notified baristas that Automated Counting was retired, instructing them to rip the QR tracking codes off backroom shelves and return to manual tallies.

A Starbucks spokesperson provided GeekWire with this statement on Monday:

“Human connection is at the core of our business, which is why we have invested $500 million to put more partners (employees) in our coffeehouses. We use technology to support human connection, not to replace it. This tool was designed to simplify a routine task and give partners more time with their customers. When it fell short, we listened to feedback and changed course. That is what innovation looks like at Starbucks: listening, learning, and adapting.”

GeekWire also contacted NomadGo, and we’ll update this story when we hear back.

Despite retiring Automated Counting, Starbucks has pushed forward with other AI initiatives across its business. The coffee giant is building an AI-powered ordering companion inside its mobile app to translate cravings into custom recipes, while testing a ChatGPT integration that suggests drinks based on a customer’s mood or outfit.

For store staff, the company continues to rely on Green Dot Assist, a generative AI virtual assistant built to help baristas quickly look up recipes, standards, and store operating procedures.

Key Takeaways Shopify's Subscription Solutions revenues rose 21% to $750 million in first-quarter 2026. Plus merchants grew faster than the overall base, while large merchants nearly doubled in two years. Sidekick usage nearly quadrupled, supporting retention, upgrades and an 80% segment gross margin. Shopify’s (SHOP - Free Report) Subscription Solutions business is strengthening the company’s growth prospects by expanding its recurring revenue base across Standard and Plus plans. In the first quarter of 2026, Subscription Solutions revenues increased 21% year over year to $750 million. Monthly recurring revenues rose 16% to $212 million, with Shopify Plus accounting for 35% of total MRR, up from 34% in the prior-year quarter. This reflects healthy additions of new merchants as well as existing merchants upgrading to higher-tier plans as their businesses scale.

Growth is also being supported by stronger adoption among larger merchants. Shopify noted that Plus merchants expanded faster than its overall merchant base, boosting monthly subscription revenues and variable platform fees. The number of large merchants generating more than $100 million in annual GMV on Shopify has nearly doubled over the past two years. Enterprise wins involving brands such as Orvis, Mulberry and LVMH highlight Shopify’s growing appeal as companies replace costly legacy systems with its unified commerce, POS, B2B and payments platform.

The company’s ecosystem of apps, themes and domains represents another important Subscription Solutions growth driver. Thousands of third-party applications extend Shopify’s platform capabilities, improving merchant engagement and increasing the value of remaining within the ecosystem. Shopify is also broadening access to B2B functionality across standard subscription plans, enabling merchants to manage wholesale and direct-to-consumer operations through one platform. This could attract more merchants while creating opportunities for future upgrades and additional service adoption.

AI-powered tools such as Sidekick are further enhancing the long-term prospects of the segment by making the platform more productive and deeply embedded in merchants’ daily operations. Weekly active shops using Sidekick increased nearly fourfold year over year, while merchants created more than 12,000 custom apps through the tool during the quarter. As merchants rely on Shopify for store design, automation, analytics and business recommendations, retention and plan-upgrade opportunities are likely to improve. Subscription Solutions also carries an attractive gross margin of approximately 80%, making its continued expansion supportive of Shopify’s gross profit and operating leverage.

Shopify Faces Tough CompetitionThe competitive intensity in e-commerce remains high for Shopify, with Commerce.com (CMRC - Free Report) and eBay (EBAY - Free Report) standing out as key challengers.

Commerce.com positions itself as an open, AI-native commerce platform rather than a traditional storefront provider. CMRC’s Feedonomics product enables merchants to optimize product listings across marketplaces, AI search engines and agentic commerce platforms, while its BigCommerce platform integrates with Google Universal Commerce Protocol, OpenAI, Perplexity, Microsoft Copilot and Meta. Commerce.com is also strengthening its competitive position through rapid AI innovation and payments capabilities. During the first quarter of 2026, CMRC launched BigCommerce Payments with PayPal, expanded AI-powered Commerce Companion, introduced agentic checkout across multiple AI platforms and enhanced B2B automation with purchase-order agents and complex pricing capabilities.

eBay remains another formidable competitor by differentiating itself through a marketplace model built around collectibles, recommerce, consumer-to-consumer (C2C) selling and trusted transactions. The company reported 14% GMV growth in the first quarter of 2026, driven by accelerating demand across collectibles, motors, electronics and fashion. Investments in AI-powered listing tools, agentic search, live shopping, authenticity guarantees, international shipping and social commerce integrations are strengthening buyer engagement and seller productivity. These initiatives enhance eBay’s appeal for merchants and individual sellers that may otherwise build independent storefronts on Shopify, particularly in resale and specialty categories.

SHOP’s Share Price Performance, Valuation & EstimatesShopify shares have lost 29.3% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 9.7%.

SHOP’s YTD Price Performance
Image Source: Zacks Investment Research

Shopify stock is overvalued, with a forward 12-month price/sales of 8.88X compared with the broader sector’s 6.18X. SHOP has a Value Score of F.

SHOP’s Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for 2026 earnings is pegged at $1.84 per share, up a couple of cents over the past 30 days. This suggests 57.26% year-over-year growth.

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

Key Takeaways Federal Realty enters Q2 with strong leasing momentum and a 96.1% leased portfolio supporting rental growth.FRT is expected to post 7.1% higher revenues, while Q2 FFO guidance points to slower year-over-year growth.Federal Realty faces refinancing drag, lease-up costs and higher interest expenses ahead of Q2 results. Federal Realty Investment Trust (FRT - Free Report) , a leading real estate investment trust (REIT) focused on retail properties, is set to report its second-quarter 2026 results on July 31, before the market opens. In anticipation of the announcement, industry analysts and investors are eager to assess the company's performance and prospects in the current economic climate.

In the last reported quarter, this retail REIT’s funds from operations (FFO) per share of $1.88 surpassed the Zacks Consensus Estimate of $1.82. Results were supported by strong leasing momentum and higher comparable POI.

Over the last four quarters, Federal Realty beat estimates on three occasions and missed on the other, the average beat being 3.30%. The graph below depicts the surprise history of the company:

In this article, we will dive deep into the U.S. retail real estate market environment and the company's fundamentals and analyze the factors that may have contributed to its second-quarter 2026 performance.

US Retail Real Estate Market in Q2The second-quarter 2026 U.S. retail market showed signs of stabilization, as shopping-center demand returned to positive territory and vacancy remained near historically low levels. Limited new construction continued to support rent growth, while resilient consumer spending favored grocery, discount and other value-oriented retailers. However, uneven regional trends and rising pressure on lower- and middle-income households kept the operating backdrop mixed.

Per the Cushman & Wakefield report, net absorption reached 708,000 square feet, while national vacancy remained broadly stable at 6%, up only 3 basis points sequentially and still below the historical average of 7.4%. Limited construction continued to support market fundamentals, with just 2.3 million square feet delivered during the quarter and the development pipeline accounting for less than 0.3% of existing inventory.

Asking rents increased 2.2% year over year to $25.65 per square foot, supported by tight availability and muted new supply. The West led demand growth with 1.3 million square feet of positive absorption and was the only region to record a decline in vacancy. In contrast, the South posted a slight rise in vacancy as earlier population growth encouraged new development, creating temporary lease-up pressure in markets such as Atlanta, Houston, Washington and Dallas-Fort Worth. Rents in the South advanced 3.3% year over year, the strongest growth among all regions.

Consumer spending remained resilient despite higher energy costs. Retail sales rose 6.9% year over year, or 5.4%, excluding gasoline stations, while unemployment stayed low at 4.2%. However, inflation outpaced wage growth in April and May, increasing pressure on lower- and middle-income households. This widening spending divide is likely to favor grocery, discount, value and health-and-wellness retailers over discretionary categories.

FRT: Factors at PlayFRT is expected to deliver another resilient quarter, supported by strong leasing momentum, premium demographics and demand for its grocery-anchored and mixed-use assets. Management entered the second quarter with the portfolio 96.1% leased and 93.8% occupied, while executed-but-not-yet-open leases represented roughly $36 million of incremental rent through 2027. Record first-quarter leasing spreads, a 1.7 million-square-foot negotiation pipeline and continued strength among both value-oriented and aspirational retailers should help sustain rental growth.

Near-term growth is nevertheless likely to moderate from the first-quarter. Management guided second-quarter FFO of $1.83-$1.86 per share and expects comparable property growth to ease toward roughly 2%, reflecting occupancy remaining in the mid-to-upper 93% range, an approximately $0.01 refinancing drag and initial losses from The Blayr residential lease-up.

Projections for FRTThe Zacks Consensus Estimate for quarterly revenues is pegged at $333.5 million, which indicates a 7.1% increase from the year-ago period. The consensus mark for rental revenues stands at $320 million, which suggests a rise from the year-ago period’s $302.5 million. Rental income from minimum rents — commercial — is pegged at $221.7 million, up from $208.6 million in the year-ago period. Rental income from cost reimbursements is projected at $62.5 million, up from $59.3 million in the prior-year period.

Our estimate places FRT's leased occupancy rate at 96.5%, up 40 basis points sequentially, while the rent per square foot is projected to grow 2.9% year over year.

Interest expenses are anticipated to increase 14.9% year over year in the company's second-quarter 2026 earnings release.

Federal Realty’s activities during the soon-to-be-reported quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for second-quarter FFO per share has remained unchanged at $1.85 over the past two months. It also suggests a 3.1% decrease year over year.

What Our Quantitative Model Predicts for FRTOur proven model does not conclusively predict a surprise in terms of FFO per share for Federal Realty this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

Federal Realty has an Earnings ESP of -0.30% and currently carries a Zacks Rank of 2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a LookHere are two stocks from the retail REIT sector — Kimco Realty (KIM - Free Report) and Simon Property Group (SPG - Free Report) — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

Kimco Realty, slated to release quarterly numbers on Aug. 4, has an Earnings ESP of +0.63% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Simon Property Group, scheduled to report quarterly numbers on Aug. 10, has an Earnings ESP of +1.21% and carries a Zacks Rank of 3 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

By PYMNTS  |  July 27, 2026

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Coinbase’s CEO has criticized cryptocurrency companies who switch their focus from blockchain tech to artificial intelligence (AI).

“‘If you’re in crypto, pivot to AI.’ I used to hear versions of this, and it’s the wrong way to think about the world. It’s zero sum, scarcity thinking,” Brian Armstrong wrote in a post on the social media platform X Sunday (July 27). “Crypto is a general purpose technology. It’s infrastructure, the same way electricity or the internet is infrastructure. It doesn’t compete with the next big thing, because it underpins it. It’s an *and*, not an *or*.”

AI being a “megatrend” does not detract from crypto but in act adds to its importance, Armstrong added.

“AI agents will need their own financial infrastructure and will eventually transact far more per day than all humans combined,” he wrote. “They can’t open a bank account, they can’t wait three days for a wire, they reside in one country. They need real time programmable money (and that’s crypto).”

These agents will need to “hold funds and pay for things on their own,” Armstrong continued, noting Coinbase’s involvement in x402, an agentic protocol that he said now powers most agentic payments.

“Agents will also engage in trading and act as a financial advisor,” he said. “They will raise or borrow money for new projects they are undertaking. They will eliminate tasks for us around tax planning, portfolio rebalancing, and bill pay.”

PYMNTS noted as much in a report on x402 earlier this month, saying the initiative gives CFOs and merchants a glimpse into a new reality for B2B.

“For CFOs, the more immediate question is not whether an AI agent can buy sneakers,” that report said. “It is whether software usage, data calls, model inference, content access and machine-to-machine work can become payable events inside normal business operations.”

If a compliance bot gets the attention of a sanction database or an internal AI agent calls a premium API to carry out a treasury task, “x402 suggests those moments could carry payment instructions by default,” PYMNTS added.

“The x402 protocol revives the long-unused HTTP 402 ‘Payment Required’ status code and turns it into a payment protocol for the internet,” the report continued. “That matters because the object being sold is not necessarily a product. It may be a request, an answer, a data pull, a support escalation, a chunk of compute, or a software action. The request becomes the transaction.”

Key Takeaways CNI's Q2 earnings and revenues beat estimates as grain and energy volumes drove broad freight growth.Fuel costs surged 59.6%, pushing the adjusted operating ratio 50 basis points higher to 62.2%.CNI raised its 2026 outlook to low-single-digit RTM growth and mid-to-high-single-digit earnings growth. Canadian National Railway Company (CNI - Free Report)  reported second-quarter 2026 adjusted earnings of $1.50 per share (C$2.08), beating the Zacks Consensus Estimate of $1.39 by 7.9%. Adjusted earnings increased 11.2% year over year in Canadian-dollar terms.

Revenues of $3.43 billion (C$4.75 billion) topped the consensus estimate by 5.4% and rose 11.2% year over year. Strong grain and energy volumes supported the performance, while revenue ton-miles, a measure of freight volume, increased 5.1%.

CNI's Freight Revenues Advance BroadlyFreight revenues increased 11.5% year over year to C$4.56 billion. Grain and fertilizers revenues climbed 17.5% year over year, while petroleum and chemicals rose 16.5%. Automotive revenues increased 18.3% year over year, aided by strong imports to Canada and market-share gains.

On a year-over-year basis, intermodal revenues advanced 7.8%, forest products increased 7.4%, and metals and minerals rose 6.5%. Coal revenues were nearly flat. Total carloads slipped 0.4%, but freight revenue per carload increased 11.9% year over year to C$3,236, reflecting improved volume mix and yield.

Canadian National's Costs Weigh on EfficiencyOperating expenses increased 12.8% year over year to C$2.97 billion. Fuel expense surged 59.6% year over year to C$659 million due to higher prices, although stronger fuel efficiency and higher volumes partly tempered the impact. Purchased services and material costs rose 11.3% year over year, while labor and fringe benefits increased 3.1%.

Operating income grew 8.7% year over year to C$1.78 billion. However, the adjusted operating ratio deteriorated 50 basis points to 62.2%, as fuel alone had a 210-basis-point unfavorable impact. The adjusted result excluded C$17 million of advisory costs related to rail consolidation matters.

CNI's Productivity Gains Support OperationsGross ton-miles increased 3.2% year over year, while gross ton-miles per average employee improved 8.8%. Locomotive utilization rose 6.3% year over year, and train length increased 0.8%. These gains reflected resource alignment, plan discipline and continued emphasis on asset utilization.

Network service measures were mixed. Car velocity declined 0.9% year over year to 211 miles per day, and through dwell increased 4.4% to 7.1 hours. Through network train speed improved 1.1% to 19.1 miles per hour, while the local service commitment rate declined to 93% from 95%.

Canadian National's Cash Flow Remains SolidNet cash provided by operating activities totaled C$1.61 billion, down 7.7% year over year. Lower investing outflows helped free cash flow increase 2.2% to C$942 million. Gross property additions declined 13.7% to C$695 million.

CNI ended June with C$280 million in cash and cash equivalents compared with C$350 million at 2025-end. Long-term debt increased to C$21.74 billion from C$20.30 billion. The company repurchased 2.9 million shares for C$454 million during the quarter.

CNI Sees Uneven Freight Trends AheadManagement expects Canadian grain strength in the third quarter due to higher carry-outs from the record 2025-2026 crop. Petroleum and chemicals should benefit from refined-product growth, new crude oil business and added natural gas liquids fractionation capacity.

The outlook is less favorable for international intermodal, where North American imports remain challenging, and lower-profitability volume has been demarketed. Forest products face flat housing starts and U.S. tariffs and duties, while weak iron ore fundamentals remain a drag on metals and minerals.

Canadian National Raises Its 2026 OutlookCanadian National now expects low-single-digit RTM growth in 2026, up from its prior assumption of flattish growth. The company raised its adjusted diluted earnings growth outlook to the mid-to-high-single-digit range from its earlier expectation for growth slightly above RTM gains.

The railroad continues to plan approximately C$2.8 billion of capital expenditures, net of customer reimbursements. Its updated assumptions include a Canadian dollar value of 71 U.S. cents and West Texas Intermediate crude prices of $80-$110 per barrel. Management also flagged heightened demand risk from volatile macroeconomic conditions, geopolitical conflicts and global trade tensions.

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

Q2 Performances of Other Transportation CompaniesDelta Air Lines (DAL - Free Report) reported second-quarter 2026 earnings (excluding 88 cents from non-recurring items) of $1.56 per share, beating the Zacks Consensus Estimate of $1.51. Earnings declined in double digits (% wise) from a year ago as sharply higher fuel costs pressured profitability.

Revenues rose on a year-over-year basis to $17.67 billion but missed the consensus estimate of $17.76 billion. Broad demand strength lifted adjusted total revenue per available seat mile, or TRASM, 12.4%, while premium and diversified revenue streams continued to expand.

United Airlines Holdings, Inc. (UAL - Free Report)  reported second-quarter 2026 adjusted earnings of $1.99 per share, down 48.6% year over year but above the Zacks Consensus Estimate of $1.92 by 3.7%.

Operating revenues rose 16% to $17.67 billion and were essentially in line with the $17.68-billion consensus mark. A 12.1% increase in total revenue per available seat mile, or TRASM, and broad-based gains across premium, loyalty and cargo revenues supported the top line despite sharply higher fuel costs.

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

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

JetBlue Airways is overhauling its fare options as it gears up to launch its domestic first-class seats and, yes, there is a restrictive basic option at the front of the plane.

Travelers flying on JetBlue will start by choosing how much legroom they want and how premium they want their seat to be.

The airline will have an economy section, or "Main," a section with extra legroom seats that it calls "Even More," which also come with earlier boarding and priority airport screening, and a domestic first class that it's named BlueFirst, which it's slated to debut later this year. From there, customers will have the following options for each class:

Base: This is the lowest price. It includes a carry-on but not seat selection. Tickets are refundable as a travel credit and there is a fee to change or cancel the reservation. Travelers will earn 1 TrueBlue loyalty point per $1 spent.Standard: Seat selection is included, there's no change or cancel fee (though customers will have to pay a difference in fare) and travelers will earn 3 TrueBlue points per $1 spent.Flex: Along with all the options in a standard fare, the perk here is that refunds will go back to the original form of payment.With the new groupings, JetBlue is getting rid of the "Core" fares it sells now and putting economy class options in a "Main" category.

JetBlue's lie-flat Mint business class, which is used on longer-haul flights like cross-country trips and flights to European destinations including Paris, London and Milan, will only have the Standard and Flex option.

JetBlue stopped short of offering a basic lie-flat business option that competitors United Airlines and Delta Air Lines launched this year. Those airlines have made similar moves to break up premium economy by offering different fares even at the front of the cabin. United this month said that on some aircraft it will charge a premium for a blocked middle seat.

JetBlue hasn't yet provided a date for its BlueFirst seats, but the changes come as airlines are racing to capitalize on high demand for pricier seats from consumers seeking extra comfort and perks on board. JetBlue is set to report results on Tuesday.

Key Takeaways Cigna is expected to post higher Q2 revenues and EPS, with Evernorth and pharmacy sales supporting growth.CI's insured medical customers are projected to decline to 3.7 million, while MCR is expected to rise.Evernorth pre-tax adjusted income is expected to decline even as segment revenues are likely to increase. The Cigna Group (CI - Free Report) is set to report second-quarter 2026 results on July 30, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $7.58 per share on revenues of $71.4 billion.

The second-quarter earnings estimate remained stable over the past 30 days. The bottom-line projection indicates a year-over-year increase of 5.3%. Also, the Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 6.4%.

Image Source: Zacks Investment Research

For full-year 2026, the Zacks Consensus Estimate for Cigna’s revenues is pegged at $287.1 billion, implying an increase of 4.5% year over year. Also, the consensus mark for 2026 EPS is pegged at $30.39, signaling growth of 1.8% year over year.

Cigna beat the earnings estimates in each of the last four quarters, with the average surprise being 1.9%. This is depicted in the figure below.

Q2 Earnings Whispers for CignaOur proven model does not conclusively predict an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.

CI currently has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

What’s Shaping Cigna’s Q2 Results?The Zacks Consensus Estimate for pharmacy revenues indicates a 6.6% improvement from the prior-year quarter’s number. Also, the consensus estimate for premiums revenues signals 8.1% year-over-year growth.

The consensus mark for revenues from the overall Evernorth Health Services segment is pegged at $61.6 billion, indicating 6.5% growth from the prior-year quarter’s figure. The Zacks Consensus Estimate for Cigna Healthcare revenues suggests a 5.4% increase. The consensus estimate for pre-tax adjusted income from Cigna Healthcare indicates a 12.3% increase from a year ago.

However, the consensus mark for fees and other revenues implies a 1.3% decrease from the year-ago quarter. The consensus mark for Cigna’s total insured healthcare medical customers is pegged at 3.7 million, indicating a decline from 3.8 million a year ago.

The consensus estimate for pre-tax adjusted income from Evernorth indicates a 4.4% decrease from a year ago. The consensus mark for the medical care ratio or MCR is pegged at 84.45%, up from 83.20% a year ago.

Stocks That Warrant a LookWhile an earnings beat looks uncertain for Cigna, here are some companies from the broader Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:

ProMIS Neurosciences, Inc. (PMN - Free Report) has an Earnings ESP of +13.30% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate calls for ProMIS to report a loss of $1.45 per share for the to-be-reported quarter, indicating an 80% year-over-year improvement. PMN has witnessed one upward revision against no downward movement over the past 60 days.

Cardinal Health, Inc. (CAH - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for Cardinal Health’s bottom line for the to-be-reported quarter predicts 16.4% year-over-year growth. Its earnings beat estimates in each of the past four quarters, with an average surprise of 10.3%. The consensus estimate for CAH’s revenues is pegged at $65.6 billion, a 9.1% increase from the year-ago period.

Alcon Inc. (ALC - Free Report) has an Earnings ESP of +3.13% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for Alcon’s bottom line for the to-be-reported quarter indicates a 1.3% increase from a year ago. The company’s earnings beat estimates in three of the trailing four quarters and missed once, with an average surprise of 3.7%. The consensus estimate for ALC’s revenues is pegged at $2.8 billion, signaling a 7.3% increase.

Key Takeaways NBIX is expected to post Q2 revenues of $901.54 million and earnings of $2.26 per share.Neurocrine expects Ingrezza and Crenessity to support quarterly growth through demand and adoption.NBIX investors will watch pipeline updates and the integration of newly acquired Vykat XR. Neurocrine Biosciences (NBIX - Free Report) is scheduled to report second-quarter 2026 results on July 30, after market close. We expect investors to focus on the sales performance of NBIX’s marketed products and other pipeline updates when the company reports quarterly results.

The Zacks Consensus Estimate for second-quarter 2026 revenues is pegged at $901.54 million, while the same for earnings is pegged at $2.26 per share.

Over the past six months, shares of NBIX have risen 30.5% against the industry’s 4.1% decline.

Image Source: Zacks Investment Research

Let’s see how things might have shaped up for NBIX in the to-be-reported quarter.

Factors Likely to Influence NBIX’s Q2 ResultsNeurocrine’s top line primarily comprises product sales from Ingrezza and Crenessity with only a modest contribution from other revenue streams. Ingrezza, the company's flagship VMAT2 inhibitor, continues to anchor revenue growth with its leadership in the tardive dyskinesia market, while benefiting from its expanded indication in Huntington's disease chorea. Meanwhile, Crenessity is emerging as an important growth driver following its FDA approval in late 2024 for use as an adjunctive treatment for classic congenital adrenal hyperplasia (CAH) in adults and children aged four years and older.

We expect Ingrezza to sustain its solid commercial momentum in the upcoming quarter, supported by robust prescription demand. Management's reaffirmation of its full-year sales guidance of $2.7-$2.8 billion reflects continued confidence in the product's growth trajectory. Meanwhile, Crenessity is expected to deliver another quarter of sequential growth, driven by increasing physician adoption, expanding reimbursement coverage and rising patient uptake. Collectively, these products are likely to underpin Neurocrine's second-quarter commercial performance.

Beyond its commercial portfolio, investors are likely to focus on updates across Neurocrine's diversified neuroscience pipeline, which remains a key driver of the company's long-term growth strategy. Particular attention will be on the phase III development of direclidine for schizophrenia, alongside its mid-stage evaluation in bipolar mania, as well as the late-stage development of osavampator for major depressive disorder with cognitive impairment.

Investors will also look for updates on Crenessity's expansion, following the initiation of a phase II study in younger pediatric patients (less than four years) with classic CAH and the completion of enrollment in a separate phase II study in the European Union involving children from birth to under two years of age.

Another area of focus will be the Soleno Therapeutics acquisition, completed in May 2026. The transaction added Vykat XR (diazoxide choline), the first and only FDA-approved treatment for hyperphagia associated with Prader-Willi syndrome in adults and pediatric patients aged four years and older, to Neurocrine's commercial portfolio. Supported by patent protection extending into the mid-2040s, the acquisition is expected to strengthen the company's commercial platform and enhance its long-term growth profile.

Earnings Surprise HistoryNeurocrine has a mixed history of earnings surprises. The company’s earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, delivering an average surprise of 9.08%. In the last reported quarter, the company delivered an earnings surprise of 15.48%.

Earnings Whispers for NBIXOur proven model does not conclusively predict an earnings beat for NBIX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Neurocrine has an Earnings ESP of -7.61% as the Most Accurate Estimate currently stands at $2.08 per share and the Zacks Consensus Estimate of earnings is pegged at $2.26.

Zacks Rank: Neurocrine currently carries a Zacks Rank #2.

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

Stocks to ConsiderHere are a few stocks worth considering from the healthcare space, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Harmony Biosciences (HRMY - Free Report) has an Earnings ESP of +14.14% and sports a Zacks Rank #1 at present.

Shares of HRMY have lost 4.2% over the past six months. The company’s earnings missed estimates in each of the trailing four quarters, delivering a negative average surprise of 25.16%.

ACADIA Pharmaceuticals (ACAD - Free Report) has an Earnings ESP of +25.00% and carries a Zacks Rank #2 at present.

Shares of ACAD have lost 3.1% over the past six months. The company’s earnings beat estimates in three of the trailing four quarters but missed in the remaining quarter, delivering an average surprise of 20.83%.

Agios Pharmaceuticals (AGIO - Free Report) has an Earnings ESP of +12.67% and holds a Zacks Rank #3 at present.

Shares of AGIO have risen 28.4% over the past six months. The company’s earnings beat estimates in three of the trailing four quarters but missed in the remaining quarter, delivering an average surprise of 2.39%.

Key Takeaways IDEX is expected to report Q2 revenues of $902.4 million and adjusted EPS of $2.10 on July 29.IEX may benefit from pharma, semiconductor and data center demand, plus contributions from acquisitions.IDEX faces pressure from higher operating costs and weaker Fire & Safety/Diversified Products performance. IDEX Corporation (IEX - Free Report) is scheduled to release second-quarter 2026 results on July 29, before market open.

The Zacks Consensus Estimate for second-quarter earnings has decreased a penny in the past 60 days. The company has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average surprise being 6%.

The consensus estimate for revenues is pegged at $902.4 million, indicating an increase of 4.3% from the prior-year quarter’s figure. The consensus estimate for adjusted earnings is pinned at $2.10 per share, indicating an increase of 1.5% from the year-ago quarter’s number.

Let's see how things have shaped up for IDEX this earnings season.

Factors to Note Ahead of IDEX’s ResultsThe Health & Science Technologies (HST) segment is expected to have benefited from an increase in volumes, driven by strength in the pharma market and AI-led growth in data center power and semiconductor markets. Also, strength in the space and defense markets is expected to have aided the segment’s performance in the second quarter. The consensus estimate for the HST segment’s revenues is pegged at $407 million, indicating an increase of 11.5% year over year.

An increase in demand for products across the municipal water end market is expected to have aided the Fluid & Metering Technologies (FMT) segment. Higher demand for mining application solutions business is likely to have been a tailwind as well. The consensus estimate for the FMT segment’s revenues is pegged at $314 million, indicating growth of 0.9% year over year.

IDEX has remained focused on expanding its product offerings and market presence through buyouts, which is expected to have boosted its top line. In July 2025, the company acquired Micro-LAM, Inc. (Micro-LAM), which expanded IDEX’s optics technologies offerings. Also, the acquisition of Mott Corp. and its subsidiaries (Mott) in September 2024 expanded the company’s expertise in applied materials science technology capabilities across high-value end markets.

However, the Fire & Safety/Diversified Products (FSDP) segment is expected to have put up a weak show due to softness in the dispensing business arising from the unfavorable timing of dispensing projects in emerging markets. The consensus estimate for the segment’s revenues is pegged at $189 million, decreasing 1.6% from the year-ago quarter figure.

The escalating costs and operating expenses, due to increasing employee-related costs and professional services spending, are likely to have weighed on IEX’s bottom line in the to-be-reported quarter.

Earnings WhisperOur proven model does not conclusively predict an earnings beat for IEX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below.

Earnings ESP: IEX has an Earnings ESP of -0.67% as the Zacks Consensus Estimate is pegged at $2.10 per share, higher than the Most Accurate Estimate of $2.09. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: IEX presently carries a Zacks Rank of 3.

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

Stocks to ConsiderHere are some companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.

Crane Company (CR - Free Report) has an Earnings ESP of +4.73% and a Zacks Rank of 2 at present. The company is scheduled to release second-quarter 2026 results on July 28.

Crane’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.3%.

Ferguson Enterprises Inc. (FERG - Free Report) has an Earnings ESP of +1.22% and a Zacks Rank of 2 at present. The company is slated to release second-quarter 2026 results on Aug. 10.

Ferguson’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.5%.

Ingersoll Rand Inc. (IR - Free Report) has an Earnings ESP of +0.61% and a Zacks Rank of 3 at present. The company is slated to release second-quarter 2026 results on July 30.

Ingersoll Rand’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and matched the mark in two, the average surprise being 2.4%.

Key Takeaways Five9 offers profitable AI growth, stronger cash flow and a more balanced risk-reward profile.SoundHound's revenues rose 52%, but losses and LivePerson integration add execution risk.Five9 trades at 1.33X forward sales versus SoundHound's 10.49X, despite positive cash flows. Artificial intelligence is rapidly transforming customer engagement as enterprises adopt conversational AI, intelligent virtual agents and automation to improve customer experience while lowering service costs. Companies that can deliver scalable, enterprise-grade AI platforms are expected to benefit from this multiyear technology shift. SoundHound AI (SOUN - Free Report) and Five9 (FIVN - Free Report) are among the companies capitalizing on this opportunity, but they approach the market from different angles.

SoundHound has evolved into a voice-first, agentic AI platform serving industries ranging from automotive and restaurants to financial services, while Five9 remains a leader in cloud contact center software that is embedding AI across its customer experience platform.

Let's dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.

The Case for SoundHound StockSoundHound continues to position itself as one of the fastest-growing pure-play conversational AI companies. In the first quarter of 2026, revenues increased 52% year over year, while its core Automotive and IoT AI business grew 88%, excluding acquisitions, highlighting robust underlying demand. The company also unveiled OASYS, its self-learning agentic AI platform that enables enterprises to build, deploy and continuously improve AI agents across voice, text, chat, kiosks and other customer touchpoints.

The pending acquisition of LivePerson represents another major growth catalyst. The transaction is expected to create one of the industry's largest conversational AI customer bases, spanning 25 Fortune 100 companies and more than 30 countries. Management expects substantial cross-selling opportunities by combining SoundHound's voice AI with LivePerson's digital messaging capabilities, while projecting a long-term revenue opportunity of roughly $500 million from the combined customer base.

Beyond acquisitions, SoundHound continues to expand across restaurants, automotive, financial services, healthcare, telecommunications and retail. Management highlighted increasing enterprise wins, growing adoption of Voice Insights analytics and strong customer ROI from its AI-powered drive-thru solutions. The company also ended the quarter with $216 million in cash and no debt, providing flexibility to fund future expansion.

Nevertheless, the investment case still carries meaningful risks. The company remains unprofitable, with negative adjusted EBITDA and operating cash flow. Integrating LivePerson while simultaneously investing heavily in proprietary AI models could pressure margins further if anticipated revenue synergies take longer than expected to materialize.

The Case for Five9 StockFive9 offers investors a more mature AI story built on a profitable cloud contact center platform. Rather than pursuing rapid acquisitions, the company has focused on integrating generative AI into its existing intelligent customer experience platform while maintaining disciplined financial execution.

First-quarter 2026 results reflected that strategy. Revenues increased 9% year over year to $305 million, while subscription revenues accelerated 13%. More importantly, adjusted EBITDA rose 41%, operating cash flow increased 32% and free cash flow climbed 42%, demonstrating continued operating leverage. Dollar-based retention rates of 105% overall and 107% for subscription customers indicate that existing clients continue expanding their usage of the platform.

Five9 is also strengthening its competitive position through AI Agents, GenAI Studio and partnerships such as its enterprise AI solution with Google Cloud. Management believes AI significantly expands its addressable market by extending beyond cloud contact center software into AI-driven labor automation, creating a substantially larger long-term opportunity.

Financial discipline further strengthens the investment thesis. During the latest quarter, Five9 announced a new $200 million share repurchase authorization after completing the remaining balance of its previous program, highlighting confidence in future cash generation. The company also reaffirmed its full-year outlook despite macroeconomic uncertainty.

The primary challenge is moderating growth. Revenue expansion has slowed into the high-single digits as the company has matured. Management also acknowledged that AI could gradually reduce traditional subscription revenues if newer AI offerings fail to fully offset evolving customer purchasing patterns.

Five9 Has Outperformed in the MarketThe market has rewarded Five9's improving profitability while remaining cautious toward SoundHound's higher-risk growth strategy. Five9 shares have gained 15.3% year to date (YTD), outperforming both the Zacks Computer and Technology sector, which has advanced 9.7%, and the S&P 500, up 7.5%. In comparison, SoundHound shares have plunged 38.2% over the same period.

SOUN vs FIVN Price Performance (YTD)

Image Source: Zacks Investment Research

Among comparable enterprise AI and customer experience software companies, Cisco Systems (CSCO - Free Report) has surged 68.1% YTD as investors increasingly recognize its AI networking opportunity. Meanwhile, NICE Ltd. (NICE - Free Report) has lost 47% amid softer demand for customer experience software and competitive pressures. While SoundHound has significantly lagged Five9 and Cisco, it has performed better than NICE.

SoundHound Commands the Premium MultipleThe valuation gap between the two companies reflects their contrasting business models and investor expectations. On a forward 12-month price-to-sales basis, SoundHound trades at 10.49X, well above the Zacks Computer and Technology sector average of 6.18X, suggesting investors continue to price in substantial long-term AI growth despite ongoing losses. Five9, by comparison, trades at just 1.33X forward sales despite generating positive earnings and cash flows.

SOUN vs FIVN Valuation (P/S F12M)

Image Source: Zacks Investment Research

Peer valuations reinforce this contrast. Cisco Systems trades at 6.65X forward sales, reflecting confidence in its expanding AI portfolio, while NICE trades at 1.57X. Five9 therefore trades at a discount to both Cisco and NICE despite improving profitability and expanding AI capabilities, whereas SoundHound remains the most expensive stock in the group, leaving relatively little room for execution disappointments.

Estimate Trends Favor Five9Analysts' earnings expectations further separate the two companies. For SoundHound, the Zacks Consensus Estimate for 2026 remains unchanged over the past 60 days at a loss of 15 cents per share, wider than last year's reported loss of 13 cents. Revenues are still projected to increase 38% in 2026, followed by another 15.8% growth in 2027, underscoring robust top-line momentum despite continuing losses.

SOUN Estimate

Image Source: Zacks Investment Research

Five9 presents a more balanced outlook. The Zacks Consensus Estimate for 2026 earnings has remained unchanged at $3.26 per share over the past 60 days, while the 2027 estimate has increased to $3.79 from $3.77. Analysts expect 2026 revenue growth of 9.7%, followed by another 10.1% increase in 2027, while earnings are projected to grow 10.1% in 2026 and 16.2% in 2027. These revisions point to improving profitability supported by disciplined execution.

FIVN Estimate

Image Source: Zacks Investment Research

Which Stock Offers Better Growth?Both companies are positioned to benefit from rising enterprise adoption of conversational AI, but they appeal to different investor profiles. SoundHound offers the more aggressive growth story. Its rapidly expanding enterprise pipeline, proprietary OASYS platform and pending LivePerson acquisition could substantially expand its addressable market over the next several years. However, the company still faces meaningful execution, integration and profitability risks.

Five9 offers a more balanced investment proposition. The company combines consistent recurring revenue, improving margins, healthy cash generation, disciplined capital allocation and expanding AI capabilities at an attractive valuation. Its improving earnings outlook further strengthens the investment case.

Since both stocks currently carry a Zacks Rank #3 (Hold), Five9 appears to offer the better growth opportunity today. While SoundHound could ultimately generate stronger long-term revenue growth, Five9's combination of profitable expansion, valuation support, stronger share price momentum and improving earnings visibility provides a more compelling risk-reward profile for investors seeking exposure to the customer AI market.

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

Key Takeaways IP is expected to post Q2 revenues of $6.17 billion and a loss of three cents per shareIP expects higher outage costs, while pricing gains are seen benefiting from the third quarter.IP acquired NORPAC in Q2 to boost mill flexibility, lower costs and expand operational capabilities. International Paper Company (IP - Free Report) is scheduled to report second-quarter 2026 results on July 30, 2026, before the opening bell.

The Zacks Consensus Estimate for IP’s second-quarter revenues is pegged at $6.17 billion, indicating an 8.8% decline from the year-ago reported figure.

The consensus estimate for International Paper’s earnings has moved down from a loss of two cents expected 60 days ago to the current expectation of a loss of three cents per share. The company had reported earnings of 20 cents per share in the year-ago quarter.

Image Source: Zacks Investment Research

IP’s Earnings Surprise HistoryInternational Paper’s earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being negative 93.4%.

Image Source: Zacks Investment Research

What the Zacks Model Unveils for International PaperOur model does not conclusively predict an earnings beat for IP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here, as you can see below. 

IP’s Earnings ESP: International Paper has an Earnings ESP of -32.71%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Zacks Rank of International Paper: The company currently has a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Factors Likely to Have Shaped IP’s Q2 PerformanceInternational Paper's first-quarter 2026 performance reflected continued operational improvements, with higher converting run rates and ongoing footprint rationalization driving sequential cost savings.  These improvements helped offset inflation and weather-related disruptions. Winter storm-related production disruptions led the company to defer certain maintenance activities to support inventory ahead of a heavier second-quarter outage schedule. The company expects maintenance outage expenses of around $214 million (majority being in the Packaging Solutions North America segment) in the second quarter, which is almost half of the projected $442 million for the year.

For the Packaging Solutions North America segment, second-quarter price and mix are expected to have improved, mainly due to a more favorable product mix. However, these gains are likely to have been partially offset by the impact of the $20-per-ton price reduction announced in February. Because of the normal lag in price realization, the $40-per-ton increase announced in March and the additional $30-per-ton increase in April are expected to benefit results beginning in the third quarter. Volume is expected to have improved sequentially, supported by seasonal demand and one additional shipping day.

We expect Packaging Solutions North America’s net sales to increase 4% sequentially to $3.77 billion. Compared with the year-ago quarter, it reflects a 2.2% dip. 

Maintenance and outages are expected to have been higher sequentially as the second quarter is expected to have been roughly twice the normal outage schedule, which includes spending tied to the Riverdale conversion. However, input costs are expected to have had a positive impact due to favorable seasonal weather, partially offset by higher OCC and freight costs due to diesel prices. Factoring these in, the company expects adjusted EBITDA for Packaging Solutions North America in the range of $380-$410 million for the second quarter. Our model projects the segment’s adjusted EBITDA at $385.7 million, reflecting a 19% decline and a 25% year-over-year decline.

For Packaging Solutions EMEA, volumes are expected to have been higher sequentially, backed by improving conditions through the quarter. We expect the segment’s net sales to be $2.36 billion in the second quarter, indicating a 2% sequential increase and a 3% year-over-year increase. 
However, the segment is likely to have experienced peak margin pressure as higher paper costs are recognized before packaging price increases are realized. Energy-driven paper cost inflation is being reflected immediately, while packaging pricing typically lags by three to six months, compressing margins in the near term.

Operations and costs in EMEA are expected to have been unfavorable due to higher distribution expenses across the supply chain and lower energy subsidies. Input costs are also projected to have increased, driven by higher OCC and energy prices. Based on these factors, management expects second-quarter adjusted EBITDA of $150-$170 million for the segment. Our model estimates adjusted EBITDA of $159 million, down 24% sequentially and 18% from the year-ago quarter.

During the quarter, International Paper acquired North Pacific Paper Company (“NORPAC”) for $360 million. The deal is in sync with International Paper's strategic transformation to maximize value creation for customers, shareholders and employees. NORPAC's facility complements IP's existing mill system, helping it increase system flexibility, reduce costs and expand capabilities. IP will gain from NORPAC's attractive customer base, location and operational capabilities.

International Paper Stock's Price PerformanceInternational Paper's shares have lost 24.1% in the past year compared with the industry's 10.9% decline. 

Image Source: Zacks Investment Research

Stocks Poised to Beat EstimatesHere are some Basic Materials stocks, which, according to our model, have the right combination of elements to post an earnings beat in their upcoming releases.

Ternium (TX - Free Report) , scheduled to release second-quarter 2026 earnings on Aug. 4, has an Earnings ESP of +21.40% and a Zacks Rank of 1 at present. 

The Zacks Consensus Estimate for earnings for Ternium for the second quarter of 2026 is pegged at $1.29 per share, suggesting an 0.8% year-over-year increase. TX has a trailing four-quarter average earnings surprise of 3.51%.

Avient (AVNT - Free Report) , scheduled to release second-quarter 2026 earnings on Aug. 6, has an Earnings ESP of +0.87% and a Zacks Rank of 2 at present. 

The Zacks Consensus Estimate for earnings for Avient for the second quarter of 2026 is 89 cents per share, indicating an 11.2% year-over-year increase. Avient has a trailing four-quarter average earnings surprise of 2.1%.

Materion (MTRN - Free Report) , scheduled to release second-quarter 2026 earnings on Aug. 5, has an Earnings ESP of +5.39% and a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Materion’s earnings for the second quarter of 2026 is pegged at $1.55 per share, indicating 13% growth from the year-ago quarter's reported figure. Materion has a trailing four-quarter average earnings surprise of 4.96%.

Key Takeaways AWK's Q2 EPS is expected to rise 7.43% year over year to $1.59, with revenues at $1.28 billion.American Water added about 47,162 customer connections through acquisitions completed before and during Q2. New rates and infrastructure upgrades may aid AWK, while higher operating and maintenance costs could weigh. American Water Works Company (AWK - Free Report) is scheduled to release second-quarter 2026 results on July 29, after market close. The company delivered a negative earnings surprise of 8.18% in the last reported quarter.

Let us discuss the factors that are likely to be reflected in the upcoming quarterly results.

Q2 Expectations for AWKThe Zacks Consensus Estimate for earnings is pegged at $1.59 per share, implying a year-over-year increase of 7.43%.

The consensus estimate for revenues is pinned at $1.28 billion, indicating growth of 0.02% from the year-ago reported number.

Factors Likely to Have Impacted AWK's Q2 PerformanceAmerican Water Works' strategic acquisitions and organic growth are likely to have strengthened its second-quarter 2026 financial performance.  On June 1, 2026, AWK completed the acquisition of Nexus Water Group’s regulated utilities, adding roughly 47,000 customer connections across eight states. Earlier, its Kentucky American Water unit acquired the City of Livingston Municipal Water Works system, adding about 162 connections. The resulting synergies likely supported the company’s second-quarter performance.

AWK's second-quarter 2026 results are likely to benefit from newly implemented rates across its regulated operations. These rates enable the regulated recovery of infrastructure investments, supporting stable and predictable earnings.

The company continues to invest in upgrading and replacing aging infrastructure, improving operational efficiency and service reliability. These investments attract new customers and increase demand, likely supporting quarterly performance.

However, higher operating and maintenance costs are likely to have pressured second-quarter earnings.

What Our Quantitative Model Predicts About AWKOur proven model does not predict an earnings beat for American Water Works this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.

AWK’s Earnings ESP: The company has an Earnings ESP of -0.42% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AWK’s Zacks Rank: Currently, American Water Works carries a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here.

Stocks to ConsiderInvestors may consider the following players from the same sector, as these have the right combination of elements to post an earnings beat this reporting cycle.

Ameren (AEE - Free Report) is set to report second-quarter results on July 31 and is likely to have come up with an earnings beat. It has an Earnings ESP of +0.19% and a Zacks Rank #2 at present.

AEE’s long-term (three to five years) earnings growth rate is 7.68%. The Zacks Consensus Estimate for second-quarter earnings per share (EPS) is pinned at $1.08, which implies a year-over-year increase of 6.93%.

Edison International (EIX - Free Report) is set to report second-quarter results on July 30 and is likely to have come up with an earnings beat. It has an Earnings ESP of +4.66% and a Zacks Rank #2 at present.

EIX’s long-term earnings growth rate is 2.10%. The Zacks Consensus Estimate for second-quarter EPS is pinned at $1.02, which implies a year-over-year increase of 5.15%.

Southwest Gas (SWX - Free Report) is scheduled to report second-quarter results on Aug. 5 and is likely to have come up with an earnings beat. It has an Earnings ESP of +5.64% and a Zacks Rank #2 at present.

SWX’s long-term earnings growth rate is 9.89%. The Zacks Consensus Estimate for second-quarter EPS is pinned at 47cents, which implies a year-over-year decrease of 11.32%.

Key Takeaways ALGM is expected to post higher Q1 revenues and earnings, driven by automotive and industrial demand.Allegro MicroSystems is benefiting from EVs, ADAS, AI infrastructure and industrial automation trends.ALGM's product innovation and manufacturing efficiency may support margins despite industry headwinds. Allegro MicroSystems (ALGM - Free Report) is scheduled to report first-quarter fiscal 2027 results on July 30, 2026, after market close.

The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $253 million, implying a 24.4% increase from the year-ago quarter.

The consensus mark for earnings is pegged at 21 cents per share, indicating an increase of 133% from the year-ago quarter. The bottom-line estimate has remained unchanged over the past 30 days.

ALGM’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 5.43%.

Factors to NoteAllegro MicroSystems’ first-quarter fiscal 2027 results are likely to reflect sustained momentum across its automotive and industrial businesses, supported by rising demand for intelligent power and sensing solutions. The company is benefiting from secular trends, including vehicle electrification, advanced driver assistance systems (ADAS), AI infrastructure and industrial automation, which are expected to continue driving higher semiconductor content per system. These factors are likely to have reflected positively in the to-be-reported quarter.

ALGM’s automotive revenues are likely to have been supported by increasing semiconductor content in electric vehicles and advanced safety platforms. Strong design-win activity and growing adoption of next-generation sensing and power management products are expected to have remained key growth drivers in the to-be-reported quarter. Continued penetration of xEV platforms and advanced safety applications is likely to have supported demand.

Industrial revenues are expected to have benefited from improving investments in AI data centers, robotics and energy infrastructure. Allegro’s solutions that improve power efficiency and precision are likely to have witnessed healthy traction as enterprises continue investing in AI computing infrastructure and factory automation. Management’s strategic focus on these higher-growth industrial markets is expected to have supported a more diversified revenue mix in the first quarter of fiscal 2027.

The company’s continued emphasis on product innovation, operational discipline and manufacturing efficiency is likely to have aided profitability in the quarter. Allegro’s expanding portfolio of differentiated analog and mixed-signal solutions, coupled with a healthy pipeline of new products, is expected to have supported margin expansion.

However, near-term results are likely to remain influenced by macroeconomic uncertainty, automotive production trends and pricing pressure across the semiconductor industry. Supply-chain dynamics and customer inventory adjustments might have also continued to create periodic headwinds despite improving end-market demand.

Earnings Whispers for ALGMOur proven model does not conclusively predict an earnings beat for Allegro MicroSystems this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Though ALGM carries a Zacks Rank #3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to ConsiderHere are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Amphenol (APH - Free Report) has an Earnings ESP of +1.12% and sports a Zacks Rank #1 at present.

Amphenol shares have gained 13% year to date. Amphenol is scheduled to report its second-quarter 2026 results on July 29.

ASE Technology (ASX - Free Report) has an Earnings ESP of +21.21% and a Zacks Rank #2 at present.

ASE Technology shares have surged 128.9% year to date. ASE Technology is set to report its second-quarter 2026 results on July 30.

Fortive (FTV - Free Report) has an Earnings ESP of +2.82% and a Zacks Rank #2 at present.

Fortive shares have gained 13% in the year-to-date period. Fortive is set to report second-quarter 2026 results on July 29.

Key Takeaways Boston Beer's Q2 depletions fell 6% and shipments dropped 4.5% as demand weakened across core brands.Pricing, mix and brewery efficiencies lifted gross margin 60 basis points to 50.4% despite cost pressures.Sun Cruiser posted triple-digit growth, but innovation has yet to restore companywide volume gains. Boston Beer Company, Inc. (SAM - Free Report) is showing two different operating stories at once. Demand remains soft, with weaker depletions, lower shipments and pressure across several major brands.

At the same time, pricing, mix and brewery productivity are helping margins. That divergence makes execution on newer products increasingly important while the company works through weak consumer take-away.

Boston Beer Volume Trends Point LowerSecond-quarter depletions declined 6%, while shipment volume fell 4.5% to roughly 2 million barrels. First-half shipments dropped 5.6%, modestly trailing a 5% decline in depletions.

Image Source: Zacks Investment Research

Distributor inventories averaged about 4.5 weeks on hand, consistent with the prior-year period. That suggests the weakness reflects consumer demand rather than excess wholesaler inventory.

Management maintained its full-year volume outlook for depletions and shipments to decline in the low- to mid-single-digit range. Current trends point toward the lower end of that range.

SAM Core Brands Keep Losing GroundShipments declined across Twisted Tea, Truly, Samuel Adams, Hard Mountain Dew and Dogfish Head. Gains in Sun Cruiser and Angry Orchard only partly offset the broader weakness.

Image Source: Zacks Investment Research

Twisted Tea remains pressured by lower sales velocity, reduced feature and display activity, competition from spirits-based hard teas and a shift away from larger pack sizes. The 12-pack format remains the largest source of volume decline.

Truly’s marketing and soccer-related promotions improved marketplace presence but did not generate the expected demand response. Boston Beer is now reducing spending behind the brand.

Molson Coors Beverage Company (TAP - Free Report) remains a relevant comparison because it also competes across beer and flavored malt beverage categories. Constellation Brands (STZ - Free Report) provides another useful industry reference, given its exposure to premium beer and broader alcohol demand trends.

Boston Beer's Margins Show ResilienceBoston Beer’s second-quarter gross margin expanded 60 basis points year over year to 50.4%. Pricing, favorable product mix, procurement savings and brewery efficiencies helped offset inflationary, commodity and tariff costs.

Internal production also improved. The company produced 84% of domestic volume at company-owned facilities in the quarter, up from 76% a year earlier.

Management expects domestic internal production to exceed 90% for the full year, compared with 86% in 2025. That shift should support better control over costs, capacity and supply-chain execution.

SAM Innovation Offers Selective UpsideSun Cruiser delivered triple-digit depletion growth in the second quarter and continues to expand distribution. Angry Orchard grew for the fifth consecutive quarter, helped by Angry Orchard Crisp and Crisp Imperial.

Boston Beer is also expanding Sinless Vodka Cocktails in more than 30 states and LYTT Electric Coolers in more than five states. These launches are early, but they show where the company is trying to refresh the portfolio.

Still, innovation has not restored companywide volume growth. Larger established brands remain the main drag, keeping the operating outlook dependent on selective wins and sharper execution.

Boston Beer Signals Remain DefensiveThe bottom line is that Boston Beer is protecting margins better than it is protecting volume. Pricing, mix and brewery efficiencies are helping profitability, but soft demand and brand-share pressure continue to limit the near-term setup.

The stock currently carries a Zacks Rank #5 (Strong Sell), which fits a backdrop of negative earnings-estimate revisions and weak near-term momentum. Its Growth Score of B and VGM Score of B point to relatively better growth and blended style characteristics.

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

Those positives are offset by a Value Score of C and a Momentum Score of F. Until demand trends improve, operating gains alone have not translated into a more favorable stock signal.

Key Takeaways FTV is set to report Q2 2026 results on July 29, with revenue and EPS expected to increase year over year.Fortive sees momentum in IOS and AHS, backed by data center demand, AI software and recurring services.FTV expects tariffs to weigh on margins near term, while productivity and buybacks support profitability. Fortive Corporation (FTV - Free Report) is scheduled to report second-quarter 2026 results on July 29.

The Zacks Consensus Estimate for revenues is pegged at $1.06 billion, which implies an increase of 3.9% from the year-ago reported number. The consensus mark for earnings is pegged at 71 cents per share, indicating year-over-year growth of 22.4%.

FTV’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, while missing in one, with the average surprise being 7.93%.

Fortive’s shares have gained 23.2% compared with the Electronics - Testing Equipment industry’s growth of 32.3% in the past year.

Image Source: Zacks Investment Research

Factors to Note Ahead of FTV’s Q2 ResultsFortive is benefiting from its diversified portfolio of industrial technologies, software and healthcare solutions, with strength across data centers, software and recurring revenue businesses. The company continues to execute its Fortive Accelerated strategy, which focuses on faster, profitable organic growth through the Fortive Business System (FBS), disciplined capital allocation and building investor trust. Management reaffirmed confidence in its 2026-2027 financial framework and indicated that results are trending toward the upper half of its full-year guidance, reflecting strong execution.

The company is witnessing healthy momentum across both Intelligent Operating Solutions (IOS) and Advanced Healthcare Solutions (AHS). Strong demand for Fluke's data center solutions, AI-driven software offerings and recurring services supported growth in the first quarter. Management highlighted broad-based order growth across both segments, with orders outpacing revenue growth, healthy backlog levels and continued traction in recurring revenue businesses. For the second quarter, management expects business momentum to continue, with IOS remaining slightly ahead of AHS.

Fortive's operational discipline and cost initiatives continue to support profitability. The company generated adjusted EBITDA growth of 13% and expanded adjusted EBITDA margin by 140 basis points in the first quarter, driven by operating leverage, structural cost savings and share repurchases. Management expects FBS-led productivity initiatives and disciplined capital allocation to continue supporting margins, while ongoing share buybacks remain a key driver of shareholder returns.  These efforts might have benefited the second-quarter performance.

However, Fortive continues to face headwinds from tariffs, which pressured gross margins in the first quarter and are expected to remain a drag through part of the third quarter before easing. Hospital capital spending also remains cautious despite gradual improvement, while macroeconomic uncertainty could continue to weigh on demand in certain end markets.

What Does Our Model Unveil for FTV?Our proven model predicts an earnings beat for Fortive this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That is just the case here.

Fortive has an Earnings ESP of +2.82% and a Zacks Rank #2 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Other Stocks With the Favorable CombinationHere are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Seagate Technology Holdings plc (STX - Free Report) has an Earnings ESP of +0.47% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

STX is scheduled to report quarterly figures on July 28. The Zacks Consensus Estimate for Seagate Technology’s to-be-reported quarter’s earnings and revenues is pinned at $5.10 per share and $3.49 billion, respectively. Shares of Seagate Technology are up 470.7% in the past year.

Sensata Technologies Holding plc (ST - Free Report) currently has an Earnings ESP of +0.54% and a Zacks Rank #2. Sensata is scheduled to report quarterly earnings on July 29. The Zacks Consensus Estimate for ST’s to-be-reported quarter’s earnings and revenues stands at 93 cents per share and $964 million, respectively. Shares of Sensata have gained 40.6% in the past year.

Woodward, Inc. (WWD - Free Report) has an Earnings ESP of +5.10% and a Zacks Rank #2 at present. The company is scheduled to report quarterly figures on July 29. The Zacks Consensus Estimate for Woodward’s to-be-reported quarter’s earnings and revenues is pinned at $2.39 per share and $1.11 billion, respectively. Shares of Woodward are up 62.7% in the past year.

Key Takeaways Columbia Sportswear likely saw strong international momentum as a key contributor to its growth.COLM's ACCELERATE strategy, new products and marketing campaigns likely supported customer engagement.COLM might have faced potential pressure from Middle East-related order disruptions and weaker demand. Columbia Sportswear Company (COLM - Free Report) is set to report second-quarter fiscal 2026 results on July 30, after market close. The Zacks Consensus Estimate for revenues is pegged at $605.6 million, implying roughly 0.1% growth from the prior year.

Meanwhile, the consensus mark for earnings has remained unchanged at a loss of 41 cents per share in the past seven days, wider than the loss of 19 cents reported in the year-ago period. COLM has a trailing four-quarter earnings surprise of 44.1%, on average.

Key Factors to Observe for COLM’s Q2 EarningsColumbia Sportswear’s quarterly performance is likely to have benefited from continued strength in its international business, which has remained a key growth driver in recent quarters. In the first quarter of fiscal 2026 earnings call, the company highlighted robust growth across international markets, underscoring the segment’s increasing contribution to total revenues. The sustained momentum in international operations is likely to have supported overall performance during the quarter. Our model predicts 6.8% year-over-year growth in international sales for the second quarter of fiscal 2026.

Product innovation and marketing initiatives are likely to have contributed to results. Management noted that newer product collections introduced under the ACCELERATE Growth Strategy, together with the Engineered for Whatever campaign, have been gaining traction with consumers. These initiatives are likely to have supported brand momentum and overall sales performance during the quarter.

Additionally, the Columbia brand’s Performance Fishing Gear (PFG) business entered the second quarter with encouraging momentum. In the first quarter, management highlighted strong product performance and continued investments in sales and marketing, including an always-on social media strategy and grassroots initiatives. These efforts are likely to have supported PFG’s momentum and the Columbia brand’s overall performance during the to-be-reported quarter.

However, the Middle East conflict remained a concern during the second quarter. Management had earlier reported order cancellations and lower expected orders from certain distributor markets in the region. These challenges are likely to have affected the second-quarter performance.

What the Zacks Model Says About COLM’s Q2 EarningsOur proven model does not conclusively predict an earnings beat for COLM. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.

COLM has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable CombinationHere are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Cintas Corporation (CTAS - Free Report) currently has an Earnings ESP of +0.09% and a Zacks Rank of 2. The Zacks Consensus Estimate for first-quarter fiscal 2027 earnings per share is pegged at $1.35, which implies 12.5% year-over-year growth. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for quarterly revenues is pegged at nearly $3 billion, implying 9.2% year-over-year growth. CTAS has a trailing four-quarter earnings surprise of 1.84%, on average.

Urban Outfitters, Inc. (URBN - Free Report) currently has an Earnings ESP of +1.98% and a Zacks Rank of 2. The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings per share is pegged at $1.72, which implies 8.9% year-over-year growth.

The Zacks Consensus Estimate for quarterly revenues is pegged at $1.7 billion, implying 9.5% year-over-year growth. URBN has a trailing four-quarter earnings surprise of 12.2%, on average.

Tapestry, Inc. (TPR - Free Report) currently has an Earnings ESP of +2.67% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter fiscal 2026 earnings per share is pegged at $1.25, which implies 20.2% year-over-year growth.

The Zacks Consensus Estimate for quarterly revenues is pegged at $1.9 billion, implying 8.6% year-over-year growth. TPR has a trailing four-quarter negative earnings surprise of 15.6%, on average.

The frozen potato products maker reported adjusted earnings of 92 cents per share, beating the consensus estimate of 63 cents. Revenue rose to $1.77 billion, above the $1.69 billion analyst estimate.

For fiscal 2027, the company expects adjusted earnings of $2.95 to $3.25 per share, compared with the analyst consensus estimate of $3.01. It projects revenue of $6.61 billion to $6.68 billion, above the consensus estimate of $6.39 billion.

“This past year marked an important inflection point for our Company,” said Mike Smith, Lamb Weston president and CEO. “We overdelivered on our financial guidance with solid performance in sales and profitability, led by volume growth in North America. While disruption in the Middle East and input cost inflation have impacted our EMEA business, we have been taking actions to help mitigate this volatility in a challenging competitive environment.

Lamb Weston shares gained 4.2% to trade at $51.70 on Monday.

These analysts made changes to their price targets on Lamb Weston following earnings announcement.

Barclays analyst Andrew Lazar maintained the stock with an Overweight rating and raised the price target from $50 to $56. Wells Fargo analyst Marc Torrente maintained the stock with an Overweight rating and raised the price target from $54 to $57. Stifel analyst Matthew Smith maintained the stock with a Hold and raised the price target from $45 to $52. Considering buying LW stock? Here’s what analysts think:

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Key Takeaways Vertiv's Americas segment is expected to lead second-quarter growth on strong AI data center demand. VRT expanded cooling offerings, manufacturing and services to support AI-ready infrastructure growth. Vertiv's global expansion and partner wins support demand ahead of second-quarter earnings. Vertiv (VRT - Free Report) is scheduled to report second-quarter 2026 results on July 29, with its Americas segment expected to remain the company’s primary growth engine. Robust investments in artificial intelligence (AI) infrastructure, accelerating hyperscale data center deployments and sustained demand for advanced power and thermal management solutions are likely to support another strong quarter for the region.

The Americas business has consistently outperformed Vertiv's other geographic segments over the past several quarters. In the first quarter of 2026, Americas revenues surged 53% year over year, while organic sales increased 44%, significantly outperforming APAC and EMEA. This robust performance was driven by broad-based demand across nearly all product lines, reflecting the region's dynamic data center market and Vertiv's ability to capture expanding opportunities.

Click here to know how VRT’s overall second-quarter performance is likely to be.

VRT Benefits From Manufacturing and Cooling PortfolioVRT’s expanding portfolio and acquisitions are expected to have driven growth in the to-be-reported quarter. Strategic acquisitions, such as PurgeRite, have strengthened Vertiv’s liquid cooling and system-level service offerings, which are critical for modern data centers. 

The integration of solutions like SmartRun and OneCore enables the company to deliver converged, prefabricated systems at scale, supporting higher margins and differentiating the company from competitors like Super Micro Computer (SMCI - Free Report) and Amphenol (APH - Free Report) , which are expanding their offerings to support high-density, AI-driven data center deployments.

Another important growth driver is Vertiv’s expanding manufacturing footprint across North America. In June 2026, Vertiv launched PurgeRite NearZero, a fluid management service for commissioning closed-loop hydronic systems in data centers and mission-critical facilities in North America. The solution reduces water usage, wastewater generation and hauling requirements, thereby improving efficiency and sustainability during system commissioning.

The company has provided guidance that reflects continued confidence in the Americas’ ability to drive results. The company projects net sales at the midpoint of $3.35 billion, representing 27% year-over-year growth, and adjusted operating profit at the midpoint of $710 million, up 45% year over year. The Americas’ contribution is expected to remain significant, as the region’s pipeline continues to expand and the company converts opportunities into revenue. The Zacks Consensus Estimate for Americas revenues is pegged at $2.32 billion, representing a 28.4% sequential increase.

VRT Benefits From Strong International ExpansionVertiv is benefiting from strong international expansion, which is increasingly becoming a key driver of its growth and a signal for further upside potential. This broad-based international momentum demonstrates Vertiv’s ability to capture demand in diverse markets, positioning the company to leverage global infrastructure trends, especially in data centers and AI deployments.

The positive impact of international expansion is also evident in Vertiv’s customer wins and collaborations. In the first quarter of 2026, Vertiv’s converged infrastructure solutions were selected by EcoDataCenter’s AI-focused data center in Sweden, highlighting the company’s ability to deliver advanced, integrated solutions for demanding global clients. This trend is expected to have continued in the to-be-reported quarter.

Further expanding its international footprint, the company recently announced investments at its Tognana campus near Padua, Italy, to expand manufacturing and testing capabilities for AI-ready data center cooling systems.

The expansion is expected to double regional chiller production capacity by the end of 2026 and add a large-scale testing laboratory in early 2027 to validate chillers integrated with liquid cooling systems under high-density AI workloads. The investment strengthens Vertiv’s ability to meet growing demand for AI and high-performance computing infrastructure while accelerating product development, testing and customer deployment of advanced thermal management solutions.

VRT Benefits From Rich Partner BaseVertiv’s rich partner base, which includes Hut 8, NVIDIA (NVDA - Free Report) , Generate Capital, Caterpillar, Ballard Power Systems, Compass Datacenters, Oklo, Intel, ZincFive and Tecogen, has been noteworthy.

The company’s partnership with NVIDIA has been a key catalyst. Vertiv recently deployed integrated power, liquid cooling, rack infrastructure and installation services to support the Naval Postgraduate School’s new NVIDIA DGX GB300 AI system. The project modernizes an existing facility with a three-rack Vertiv SmartIT configuration, enabling high-density AI computing for research, modeling and simulation. The deployment highlights Vertiv’s ability to accelerate enterprise AI infrastructure rollouts with scalable, pre-engineered solutions.

Zacks Rank & Upcoming Earnings to WatchShares of Super Micro Computer and Amphenol have gained 2.8% and 12.9% in the year-to-date period, respectively.