Track market-moving stories before they get noisy

Eaton (ETN) stands out as an electrification powerhouse with a robust track record. Eaton is foundational to the industrial buildout supporting AI and data center development. Eaton has two other sectors, Aerospace and Global Electrification that are also doing well.

Data center REITs have delivered sector-leading, consistent outperformance, driven by secular tailwinds like AI, cloud computing, and digital transformation. DLR, EQIX, and IRM are trading at premium valuations, reflecting strong fundamentals, but current multiples suggest waiting for a pullback before adding exposure. American Tower is the top pick for new data center exposure, offering integrated connectivity and compute, trading at a discount with a 4% yield and significant upside potential.

Key Takeaways EQIX rose 38.9% in six months as AI, cloud and networking demand boosts digital infrastructure needs.First-quarter 2026 recurring revenues grew 10%, while interconnection revenues increased 9% year over year.Equinix had 46 major projects underway and has raised its dividend five times in the past five years. Shares of Equinix, Inc. (EQIX - Free Report) have gained 38.9% over the past six months compared with the industry’s rise of 8.7%.

The company remains a key beneficiary of the multi-year shift toward hybrid multicloud architectures and higher AI-driven data exchange needs. Product innovation in Fabric and continued expansion activity support longer-term growth and a durable dividend.

Last month, this Zacks Rank #2 (Buy) REIT reported first-quarter 2026 AFFO per share of $10.79, up 11.6%, but marginally missed the Zacks Consensus Estimate. Results reflected solid demand for digital infrastructure, even as higher costs weighed modestly on consensus comparisons. Annualized gross bookings of $378 million stood out in the quarter.

Image Source: Zacks Investment Research

Factors Behind EQIX's Stock Price Surge: Will This Trend Last?Rising AI, cloud and networking workload lift demand for colocated and interconnected infrastructure across Equinix’s global footprint. Management noted that customer conversations have moved from piloting AI to enterprise-wide adoption at scale. The combination of edge proximity, interconnection density and sovereignty needs supports durable demand for Equinix’s neutral platform over multi-year investment cycles.

Equinix’s revenue base remains largely recurring, which helps convert bookings into predictable cash flow and supports operating leverage as utilization rises. In first-quarter 2026, recurring revenues grew 10% year over year on a normalized and constant currency basis. Given the growing demand for data exchanges across the world, Equinix is well-positioned to expand its revenue base. Management expects normalized monthly recurring revenue growth of 9%-10%in 2026.

The interconnection portfolio remains central as enterprises pursue hybrid multicloud architectures and need direct, high-performance connectivity. In first-quarter 2026, interconnection revenues increased 9% year over year on a normalized and constant currency basis. Operationally, net cabinet billing increased by 4,100, and net interconnection adds grew by 5,800, with a backlog of cabinets sold but not yet installed at record levels. These results build on the company’s scale advantage, which included surpassing 0.5 million interconnections worldwide by the end of 2025.

Equinix continues to invest to meet demand while using presales, disciplined site selection and partnerships to support returns on new capacity. In first-quarter 2026, the company had 46 major projects underway across 32 markets, including six xScale projects, with more than 70% of retail expansion capex directed to major metros. Total capital expenditures were $1.256 billion in the quarter, largely tied to IBX expansion and platform investment.

Equinix has maintained a shareholder return focus alongside growth investment. The company has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 14.11%. While capital needs remain elevated, the recurring revenue model and growing AFFO per share outlook help support the dividend over time.

Other Stocks to ConsiderSome other top-ranked stocks from the broader REIT sector are Chatham Lodging Trust REIT (CLDT - Free Report) and Cousins Properties (CUZ - Free Report) , carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for CLDT’s 2026 FFO per share is pegged at $1.27, which indicates year-over-year growth of 24.5%.

The consensus estimate for CUZ’s full-year FFO per share is pinned at $2.93, which calls for a 3.2% increase from the year-ago period.

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.

© Jorge Villalba / iStock Unreleased via Getty Images

On a recent All-In Podcast episode dissecting SpaceX’s S-1 filing, guest investor Gavin Baker and the hosts framed Elon Musk’s privately held rocket and connectivity empire as something more ambitious than a high-growth tech company. David Friedberg argued that “having a space-based communication network, space-based data centers, and space-based communication back down to Earth wireless” creates “a backup for civilization” that governments cannot control. That framing is the philosophical core of the bull case for a $2 trillion valuation, and it matters for every public company building the terrestrial side of the AI stack.

The $2 Trillion Math Those raw S-1 numbers give the entire investment pitch real teeth. SpaceX generated a massive $18.674 billion in consolidated 2025 revenue, with its powerhouse Starlink Connectivity segment pulling in $11.4 billion of that total and printing a $4.4 billion operating profit. For Q1 2026, consolidated revenue held strong at $4.694 billion with Adjusted EBITDA tracking at $1.127 billion. Chamath Palihapitiya’s bullish take on the All-In Podcast has SpaceX setting the tone for a $2 trillion IPO valuation, which looks incredibly achievable once you bake in their exponential, multi-segment forward run rates.

The wild AI angle is what bridges pure science fiction directly to a Wall Street spreadsheet. SpaceX officially absorbed xAI back in February 2026, forming a heavy-hitting third operating segment alongside Space and Starlink. Their newly disclosed compute deal with Anthropic, paying a mind-boggling $1.25 billion every single month for access to the Colossus supercomputer clusters, validates this tech stack instantly, turning their AI division into a massive, multi-billion-dollar annual revenue machine.

Execution Edge: The 66-Day Data Center Baker noted SpaceX has compressed its data center build time from 122 days to 66 days, dramatically faster than competitors. Cursor’s Composer 2.5 model reportedly became “Pareto dominant” after just three to four weeks of reinforcement learning on SpaceX’s Colossus 2 cluster, with allegedly more tokens of coding data than exist on the public internet. SpaceX itself argues that “the key constraints in the continued growth of AI are physical” and that no other AI company has better control over the full physical stack.

The Tesla Bridge Tesla (NASDAQ:TSLA | TSLA Price Prediction) is the public-market proxy. Tesla disclosed a $2 billion investment in SpaceX equity and a partnership to build the largest chip fab for vertically integrated semiconductor manufacturing at the Gigafactory Texas campus, per the company’s Q1 FY2026 8-K filing. Tesla shares closed at $426.01 on May 22, up 25% over the past year, with Polymarket assigning a 92% probability that SpaceX will carry a higher valuation than Tesla by June 30, 2026.

What It Means For The AI Infrastructure Trade The hyperscaler CapEx race is the backdrop. NVIDIA (NASDAQ:NVDA) reported Q1 FY2027 revenue of $81.61 billion, up 85% year over year, with total supply-related commitments of $119.0 billion. Microsoft (NASDAQ:MSFT) posted Q3 FY2026 commercial RPO of $627 billion and an AI business at a $37 billion annualized run rate, up 123% year over year. Alphabet (NASDAQ:GOOGL) guided 2026 CapEx of $175 to $185 billion, with Google Cloud backlog above $460 billion.

If Musk’s orbital compute layer delivers on Friedberg’s framing, every dollar Big Tech is committing to terrestrial racks becomes more competitive, not less. Equinix (NASDAQ:EQIX) sits at the center of that terrestrial layer. Equinix carries a $105.5 billion market cap, trades at a forward PE of 61, and has 25 analyst Buy or Strong Buy ratings against six Holds or Sells. The stock is up 42% year to date through May 22.

Investor Takeaway If you’re looking to play this, remember that SpaceX is still private, so you have to look at the public markets for an indirect trade. Here is the big takeaway for investors: if that eye-popping $2 trillion valuation pitch is even halfway right, the massive AI infrastructure spending we’re seeing at NVIDIA, Microsoft, Alphabet, and Equinix isn’t the peak, it’s just the opening chapter of a massive buildout where space and ground tech supercharge each other.

Moving forward, you’ll want to watch three things closely: how deeply Tesla and SpaceX integrate their tech, how that massive Anthropic compute partnership plays out, and whether Elon Musk can actually maintain his wild 66-day construction cadence as the satellite constellation scales up.

As the tech sector hunts for reliable, carbon-free energy to power data centers, investors are looking at NuScale Power (SMR +5.43%) and Oklo (OKLO +0.04%) to see which stock is a better buy.

NuScale focuses on its certified reactor design to serve traditional utilities and industrial clients. Oklo takes a different route, planning to build and operate its own fast-fission plants with high-profile backing. Both firms are leading the shift toward modular nuclear power, but they carry very different financial profiles and development timelines.

The case for NuScale PowerNuScale Power is developing proprietary small modular reactor (SMR) technology and related plant services to generate carbon-free power. Its target markets include data centers, desalination plants, and commercial hydrogen production.

The company aims to be a leader among electric utility stocks by providing carbon-free electricity to industrial and commercial users. However, it has an exclusive commercialization partner, ENTRA1 Energy. That adds a layer of risk to the business because NuScale is obligated to make large milestone payments to ENTRA1 without guaranteed revenue contracts in return.

Nuscal hasn’t commercialized its technology, so it’s not generating any meaningful revenue yet and remains deep in losses. It doesn’t have any long-term debt, though, and ended the first quarter with $341 million in cash and cash equivalents and another $836 million in short-term investments. That’s nearly $1 billion that the company can bank on any time if it wants cash to run operations and fund growth.

The case for OkloOklo is developing fast-fission power plants, called Aurora powerhouses, and fuel recycling technology to produce carbon-free energy. It eventually aims to make money by selling electricity, targeting high-demand users like data centers and industrial facilities. It has already gained traction through a prepayment agreement with Meta Platforms (META 0.72%) and non-binding interest from Equinix (EQIX +0.87%). Oklo has also signed a master power agreement with Switch for 12 gigawatts (GW) of capacity. These agreements show strong interest from major technology companies looking for reliable energy.

Oklo is a pre-revenue company, as its power plants are still in the early stages of permitting and construction. It’s a loss-making company as it is investing heavily in engineering and regulatory approvals. Like NuScale, Oklo also doesn’t carry any long-term debt but has a massive cash balance of over $2 billion, thanks mainly to recent stock sale.

Risk profile comparisonNuScale faces risks because it has not yet signed binding contracts to deliver its reactor modules, which leaves its future revenue uncertain. It must also compete against large, state-supported entities like China National Nuclear Corporation and other global players in the nuclear sector. There are also concerns that the cost of its electricity might not be competitive against other energy sources in the U.S. Delays in the design or manufacture of its first commercial units could also harm its reputation and financial health.

Oklo has not yet built any powerhouses or secured binding purchase agreements, making its future performance difficult for investors to predict. Building fuel recycling facilities is also a complex process that could face regulatory hurdles or cost overruns. Finally, any negative public perception of nuclear energy could severely limit the demand for its technology.

Valuation comparisonWhile Oklo is valued based on high future earnings estimates, NuScale is currently priced relative to its sales because it has not yet reached profitability.

MetricNuScale PowerOkloForward P/En/a141.6xP/S ratio98.5xn/aSector benchmark uses the SPDR XLU sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Both Oklo and NuScale Power are riding the massive tailwinds of artificial intelligence (AI) data center energy demand and the U.S. government’s backing of nuclear energy. The Trump administration aims to quadruple U.S. nuclear capacity to 400 GW by 2050 and is fast-tracking the development of new reactors.

Between the two stocks, though, I’d buy Oklo. That’s because of stronger collaborations and partnerships, as well as operational progress.

OKLO data by YCharts

Oklo is already part of multiple Department of Energy (DOE) nuclear pilot programs. It has a major July 4 target to achieve criticality (self-sustaining nuclear chain reaction) at its Groves Isotope Test Reactor in Texas.

It is also making progress in nuclear fuel recycling and is building facilities, since fast-fission plants can run on both fresh and used fuel. That’s a huge competitive advantage because the U.S. has a massive stockpile of unused energy such as plutonium left over from commercial nuclear waste , which the government wants to put to use. The DOE has just selected Oklo, along with a few other companies, for its Surplus Plutonium Utilization Program. 

Oklo also has major partnerships. For example, it is collaborating with Nvidia (NVDA +0.34%) to use the tech giant’s AI computing power and software for nuclear research and development.

NuScale is the first company to win design approval for its SMRs from the U.S. Nuclear Regulatory Commission (NRC). Through programs like ENTRA1 Energy’s 6 GW deal with the Tennessee Valley Authority (TVA), NuScale also has a strong project pipeline.

Yet, Oklo’s direct collaborations with the DOE and companies like Nvidia, and a massive cash balance, make it a tad “safer” than NuScale Power.

A month has gone by since the last earnings report for Equinix (EQIX - Free Report) . Shares have lost about 1.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Equinix due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Equinix, Inc. before we dive into how investors and analysts have reacted as of late.

Equinix Q1 AFFO & Revenues Miss Estimates on Higher ExpensesEquinix reported first-quarter 2026 AFFO per share of $10.79, up 11.6% from $9.67 a year ago but missing the Zacks Consensus Estimate of $10.89 by 0.9%.

Total revenues were $2.44 billion, up 9.8% year over year, but below the consensus mark of $2.51 billion by 2.6%. Results reflected solid demand for digital infrastructure, even as higher costs weighed modestly on consensus comparisons. Annualized gross bookings of $378 million stood out in the quarter.

Equinix Recurring Revenues Rise Across RegionsRecurring revenues were $2.33 billion in the first quarter of 2026, up from $2.09 billion a year ago, while non-recurring revenues were $113 million compared with $138 million in the prior-year quarter.

By geography, recurring revenues from the Americas, the EMEA and Asia Pacific rose 12.4%, 10.2% and 12.7%, respectively, year over year. Although non-recurring revenues from the EMEA increased 40.7%, they decreased 35.7% and 26.8% in the Americas and Asia Pacific, respectively.

Equinix Logs Record Bookings and Deepens AI MomentumEquinix delivered $378 million of annualized gross bookings in the quarter and cited the largest first-quarter bookings in the company’s history, leading to a record backlog. The company also reported record annualized presales of roughly $140 million, underscoring continued customer commitments even as deployments phase in over time.

Customer activity remained broad-based. Management noted that the company completed more than 3,800 transactions with over 3,100 unique customers and processed more than 20,000 self-service orders, indicating sustained engagement across its platform. About 60% of the company’s largest deals were described as AI-related, supporting high-density AI infrastructure demand.

Equinix Expands Operating Profit Despite High ExpensesEquinix generated operating income of $577 million in the first quarter of 2026, up from $458 million in the year-ago quarter, reflecting stronger underlying operating performance.

The company posted adjusted EBITDA of $1.25 billion, up 16.7% year over year, while adjusted EBITDA margin came in at 51%, marking a record margin level. The cost structure remained sizable, with cost of revenues rising 9.4% to $1.19 billion, sales and marketing expense increasing 5.2% to $241 million and general and administrative expense growing $4 million to $444 million.

Equinix Maintains Liquidity While Funding Heavy InvestmentEquinix ended the quarter with a sizable liquidity cushion and continued to invest for growth. The company cited roughly $7.1 billion of available liquidity and about $20 billion of total gross debt, with net leverage of 3.8x, reflecting a balance sheet positioned to support expansion while managing funding costs.

Capital intensity remained high. Total capital expenditures were $1.26 billion in the quarter, including $32 million of recurring capital expenditures and $1.22 billion of non-recurring spend.

Equinix Raises 2026 Outlook After Strong Q1 ExecutionEquinix raised its full-year 2026 outlook across key metrics following the quarter. The company now expects full-year revenues of $10.144-$10.244 billion, compared to the prior guided range of $10,123-10,223. Management predicts an adjusted EBITDA of $5.165-$5.245 billion and an adjusted EBITDA margin of about 51%.

AFFO is projected at $4.198-$4.278 billion, with AFFO per share expected at $42.31-$43.11, up from $41.93-42.74 guided earlier.

For second-quarter 2026, management guided revenues to $2.571-$2.611 billion, implying a 9-10% increase over the prior quarter. Adjusted EBITDA is expected in the range of $1.349-$1.389 billion, with around a 52-53% margin.

How Have Estimates Been Moving Since Then?Estimates review followed a upward path over the past two months.

VGM ScoresAt this time, Equinix has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook Equinix has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

For some investors, start-up Oklo (OKLO +0.04%) has already been a millionaire maker. The nuclear energy stock has more than quadrupled since coming to the market two years ago. Indeed, at one point in 2025, Oklo stock had risen more than 700% year to date, enough to turn a six-figure investment into $1 million or more.

Since hitting an all-time high in mid-October of last year, Oklo has had more sobering market days. Its valuation had gotten absurdly high -- its market cap pushed above $30 billion with no revenue -- and anxiety around its future has brought the share price down to sub-$70 a pop.

That's still a lot for a company that doesn't have regulatory approval to operate its reactor commercially. Yet, the sell-off will likely make investors wonder whether Oklo's best days are still ahead or if its millionaire-making magic has vanished.

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Promising partnerships, but the company's economics are still unknown Oklo could be on the cusp of reinventing how nuclear power is generated and sold. That might be overstating it a bit -- the liquid-metal fast reactor technology has been around for decades -- but its business model has yet to be tried commercially.

In a nutshell, Oklo wants to deploy small nuclear reactors for on-site power generation. "Deploy" is the keyword there: It doesn't want to sell reactors to clients. It wants to set up the reactors itself and sell power under long-term agreements. This would create recurring revenue, similar to how a utility companies make money month after month. The difference, of course, is that Oklo wouldn't be servicing neighborhoods but large customers, potentially data centers, for reliable, always-on power.

A rendering of an Oklo powerhouse. Image source: Oklo.

It's unclear how much revenue Oklo's reactors could generate, but the company has offered some glimpses into its potential economics. In 2024, CEO Jacob DeWitte told Reuters that Oklo's 15-megawatt Aurora powerhouse could cost about $70 million, with a levelized cost of energy (LCOE) of between $80 and $130 per megawatt-hour (MWh), depending on location and use. In simplest terms, that is roughly the average price Oklo would need to make to cover the costs of construction and ongoing operation.

That range isn't dirt cheap (Reuters said financial services firm Lazard put utility-scale solar at roughly $38 to $78 per MWh), but if Oklo's pitch of always-on power is more valuable, clients might be willing to pay extra for the reliability.

To date, Oklo has secured important partnerships with Meta (META 0.72%), Switch, and Equinix (EQIX +0.87%) and has a potential customer pipeline of 14 gigawatts. Of course, revenue-wise, this means nothing until Oklo has an operating reactor in place. And it could be another two years before commercial operations can actually start.

Since Oklo is such a young company -- and in the nascent industry of microreactors -- it could be several years before it finds its footing. Even when it does have reactors operating, there's no telling how much it will cost -- or charge customers -- to generate power or whether its LCOE will be competitive enough to grow this company into a profitable enterprise.

In short, this company has a long way to go before those who buy in at its current share price will be millionaires, and there's no guarantee that will happen. At this point, investors seeking less risk might want to gain exposure to Oklo indirectly through a nuclear energy exchange-traded fund (ETF) rather than invest in the company outright.

The smartest technology analyst you’ve probably never heard of just published a presentation that reframes the entire AI investment thesis — and if you’re still thinking about this as a software story, you’re already behind.

That realization points to a specific set of companies — in power generation, grid infrastructure, semiconductors, data centers, and enterprise software — that are positioned to get paid no matter which AI model “wins.” The picks-and-shovels playbook has worked through every major technology transition in history. Here’s why it may work again now, and exactly where to look.

One of the most useful documents I’ve read on artificial intelligence this year doesn’t predict what’s going to happen. It explains what questions investors should be asking.

The presentation is called AI Eats the World, and it was put together by Benedict Evans.

If you’re not familiar with Evans, he spent years as a partner at Andreessen Horowitz after a career in equity research and telecommunications strategy. Unlike many technology commentators, Evans approaches technology as both an investor and an economist. He spends very little time making grand predictions and a great deal of time thinking about incentives, business models, capital allocation, and how value actually gets captured.

That last point is important.

The technology industry has a long history of creating enormous value while simultaneously destroying shareholder capital. Railroads changed America. Airlines changed the world. Telecommunications networks connected the globe. Investors who owned the wrong companies during those revolutions often discovered that being right about the future and making money are two very different things.

That may end up being the most important lesson from the current AI boom.

Right now, everyone is obsessed with artificial intelligence. Every earnings call mentions it. Every venture capitalist is funding it. Every corporate executive is trying to explain how it fits into their business model. Every stock promoter on social media has discovered that adding the letters “AI” to a company description is apparently worth an extra 20% on the share price.

Evans takes a step back and asks a simple question: What if AI is not primarily a software story? What if it’s a capital spending story?

The numbers are staggering. Microsoft, Amazon, Alphabet, and Meta are expected to spend roughly $700 billion on capital expenditures in 2026. The four largest technology companies are planning to spend nearly three-quarters of a trillion dollars in a single year building infrastructure — more than double what they were spending only a few years ago.

For perspective, Evans notes that global telecommunications capital spending runs roughly $300 billion annually. Global oil and gas capital spending is around $1 trillion. Artificial intelligence has become one of the largest infrastructure construction projects in human history.

Everyone focuses on Nvidia (NVDA) because the stock has become the poster child of the AI era. Evans points out that Nvidia can’t get enough capacity from Taiwan Semiconductor Manufacturing (TSM) fast enough to satisfy demand. Semiconductor manufacturers are scrambling. Memory suppliers are scrambling. Data center developers are scrambling. Electric utilities are scrambling. Construction companies are scrambling.

That observation leads to the first investment conclusion: if AI really does transform the economy, the biggest winners may not be software companies. They may be the businesses selling picks, shovels, and electricity.

The Power Story Everyone Is Still Underestimating

Every AI query requires electricity. Every inference requires electricity. Every data center requires electricity. The more you study the AI boom, the clearer it becomes that power generation and transmission are among the most overlooked investment themes in the market.

The Bottleneck Nobody Is Talking About

One of Evans’ most important observations is that the bottleneck isn’t just power generation. It’s transmission. You can build all the generation capacity you want — if you can’t move electricity from where it’s produced to where it’s needed, the entire system breaks down.

Data Centers Are the New Office Buildings

Evans highlights another data point that deserves more attention: data center construction spending has now surpassed office construction spending in the United States. For decades, office buildings were the physical infrastructure of the knowledge economy. Today, the knowledge economy is building server farms instead.

That shift is bullish for data center REITs.

The Commodity Risk Nobody Wants to Admit

Here is where Evans makes his most controversial argument, and it’s one worth taking seriously.

Large language models are increasingly starting to look similar. Performance differences exist, but they appear to be narrowing. There are no obvious network effects. There are no obvious switching costs. There is no guarantee that today’s AI leaders will maintain pricing power.

That should sound familiar. Telecommunications companies spent trillions building networks. Consumers captured most of the benefit. Application developers captured much of the profit. Network operators often earned mediocre returns.

If AI models become commodities, the real winners will be the businesses built on top of those models. History provides a useful guide. The internet created enormous fortunes — and most of those fortunes were not made by fiber-optic cable manufacturers. They were made by Amazon, Google, Netflix, Meta, and thousands of software businesses that used the infrastructure to solve specific customer problems.

Evans believes the same dynamic may play out in AI. The real opportunities may emerge in vertical software, workflow automation, healthcare administration, legal technology, customer service automation, and business process management.

The Consultants and the Equipment Makers

One chart in the presentation is worth pausing on: despite all the excitement surrounding ChatGPT, only a small percentage of users actually pay for the service. Many people use it. Far fewer depend on it.

Technology adoption typically follows a predictable path. People experiment. Businesses test. Consultants get hired. Pilot programs proliferate. Years later, mission-critical applications emerge. We are still early in that process — and that creates real opportunity.

The Only Honest Conclusion

The final lesson from Evans’ presentation may be the most valuable: nobody knows how this ends. Nobody.

Every platform shift looks obvious in hindsight. Personal computers, the internet, smartphones — each seemed inevitable after the fact. At the time, each transition was filled with failed business models, bankruptcies, false starts, and wildly incorrect predictions. Artificial intelligence will be no different. Some of today’s stars will disappear. Some of today’s forgotten companies will become tomorrow’s giants.

As investors, the job isn’t to predict the future with certainty. It’s to identify situations where the payoff is attractive if you’re right and the downside is manageable if you’re wrong.

That’s why power infrastructure, data centers, semiconductor equipment, and software businesses with real customers and real cash flow keep coming back as the most defensible positions. The AI future may be uncertain. The need for electricity, computing capacity, and business productivity improvements is not.

Evans closes his presentation by suggesting that every AI question ultimately has one of two answers: “Nobody knows,” or “What happened the last time everything changed?”

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Equinix (EQIX - Free Report) closed the most recent trading day at $1,089.15, moving +1.13% from the previous trading session. This change outpaced the S&P 500's 0.41% gain on the day. At the same time, the Dow added 1.73%, and the tech-heavy Nasdaq lost 0.09%.

The stock of data center operator has fallen by 1.01% in the past month, lagging the Finance sector's gain of 0.2% and the S&P 500's gain of 4.59%.

Market participants will be closely following the financial results of Equinix in its upcoming release. The company is expected to report EPS of $10.68, up 7.77% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $2.59 billion, indicating a 14.82% upward movement from the same quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $42.52 per share and a revenue of $10.24 billion, indicating changes of +10.93% and +11.09%, respectively, from the former year.

Investors should also take note of any recent adjustments to analyst estimates for Equinix. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Currently, Equinix is carrying a Zacks Rank of #2 (Buy).

Digging into valuation, Equinix currently has a Forward P/E ratio of 25.33. This expresses a premium compared to the average Forward P/E of 14.61 of its industry.

Meanwhile, EQIX's PEG ratio is currently 1.8. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The REIT and Equity Trust - Retail industry had an average PEG ratio of 2.36 as trading concluded yesterday.

The REIT and Equity Trust - Retail industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 102, which puts it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

LOS ANGELES--(BUSINESS WIRE)-- #aiinfrastructure--Zenlayer and Equinix expand their global collaboration to support distributed AI infrastructure worldwide.

Vanguard Global ex-U.S. Real Estate ETF (VNQI +0.53%) offers low-cost, broad international diversification, while iShares Select U.S. REIT ETF (ICF +1.12%) provides concentrated exposure to dominant domestic real estate investment trusts (REITs).

Investing in real estate offers a path to diversification and income, but the geography of those assets matters. The iShares ETF focuses on the heavyweights of the American market, while the Vanguard fund looks abroad to more than 30 different countries. This analysis compares these two strategies to see how concentration, international exposure, and cost impact investors.

Snapshot (cost & size)MetricVNQIICFIssuerVanguardiSharesExpense ratio0.12%0.32%1-yr return (as of Jun. 8, 2026)-0.75%12.2%Dividend yield4.7%2.4%Beta0.921.0AUM$3.9 billion$2.1 billionBeta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The Vanguard fund is significantly more affordable for long-term holders, sporting an expense ratio of 0.12% compared to the 0.32% charged by the iShares ETF. Income-focused investors may also find the international approach more appealing, as VNQI provides a higher payout with a dividend yield of 4.7%. This represents a yield gap of 2.3 percentage points over the iShares fund's 2.4% yield.

Performance & risk comparisonMetricVNQIICFMax drawdown (5 yr)(35.80%)(34.70%)Growth of $1,000 over 5 years (total return)$895$1,152What's insideThe iShares Select U.S. REIT ETF focuses on a narrow portfolio of 30 holdings, providing concentrated exposure to the largest and most dominant U.S. real estate investment trusts. Its largest positions include Prologis (PLD +1.50%) at 8.09%, Equinix (EQIX +0.87%) at 7.85%, and American Tower (AMT +1.10%) at 7.77%. Realty Income (O +1.32%), a REIT popular among income investors for its monthly payouts, also earns a spot in the top 10.

This fund, which launched in 2001, manages $2.1 billion in assets under management (AUM). ICF paid out $1.65 per share over the trailing 12 months.

In contrast, the Vanguard Global ex-U.S. Real Estate ETF offers a much broader reach with more than 700 holdings across international markets. Top positions include the Australian firm Goodman Group (GMG +2.24%) at 3.94%, alongside Japanese companies Mitsubishi Estate at 3.09% and Mitsui Fudosan at 2.71%. Launched in 2010, Vanguard’s fund tracks the S&P Global ex-U.S. Property Index. VNQI paid out $2.16 per share over the trailing 12 months.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investorsThe Vanguard and iShares ETFs both hold a basket of REITs, but that's basically where the similarities end. VNQI is nearly twice the size in AUM, is considerably cheaper, has a significantly higher yield, and is far more diversified. Sign me up, right? But as smart investors know, sometimes a stock is cheap for a reason.

If you'd bought Vanguard's ETF five years ago, you'd be sitting on a loss now. This is partly reflected in the elevated dividend -- a stock's price and its dividend have an inverse relationship, all things equal. So when the price goes down, the dividend yield rises.

In contrast, an investment in iShares' fund would have made you money. Past performance is no guarantee of future results, of course. But I would opt for an ETF with a better track record and lower yield than a fund with a history of losing money.

Erin Kennedy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Tower, Equinix, Goodman Group, and Prologis. The Motley Fool has a disclosure policy.

Key Takeaways TT posted Q1 adjusted EPS of $2.63 on $4.97B revenues, beating consensus estimates.Organic bookings surged 24% and backlog reached a record $10.7B, boosting visibility for 2026.TT lifted 2026 guidance to ~9.5% reported revenue growth and $14.75-$14.95 EPS. Trane Technologies plc (TT - Free Report) delivered a solid first quarter of 2026, with adjusted earnings of $2.63 per share, beating the Zacks Consensus Estimate of $2.53 by 4%. Revenues came in at $4.97 billion, topping the consensus mark of $4.79 billion by 3.8%, while both metrics improved year over year.

Demand was a key tailwind. Organic bookings rose 24%, and the company exited the quarter with a record backlog of $10.7 billion, up more than 30% versus year-end 2025, underscoring strong visibility for the balance of the year.

TT Shows Revenue Gains Despite Margin HeadwindsTT’s reported revenues increased 6% year over year, while organic revenues grew 3%. The company benefited from volume growth and positive prices, though these positives were offset by inflationary pressures and elevated reinvestment levels across the business.

Profitability was mixed. GAAP operating income declined to $776.1 million from $818.9 million a year ago, and GAAP operating margin compressed to 15.6% from 17.5%. On an adjusted basis, operating income improved to $794.7 million, and adjusted operating margin was 16.0%, reflecting the impact of certain non-GAAP items on comparability.

Trane Technologies Rides Commercial HVAC StrengthCommercial HVAC demand stood out again, helping push enterprise book-to-bill to 135% for the quarter. Management highlighted exceptional momentum in Americas Commercial HVAC, where bookings increased approximately 40%, supported by strength in applied equipment.

That momentum is translating into backlog growth and improved forward visibility. The company pointed to a robust project environment and sustained services strength, with global services revenues growing at a double-digit rate, reinforcing the longer-cycle, higher-value opportunity tied to the installed base.

TT’s Regional Results Highlight Uneven Profit TrendsThe Americas segment remained the largest contributor, generating revenues of $4.00 billion, up 5% year over year on a reported basis and up 4% organically. Adjusted operating margin in the region improved 10 basis points to 17.9%, supported by operating execution, even as residential results created some offsetting pressure.

Results were less favorable in Europe, the Middle East, and Africa. EMEA revenues rose 12% to $639.5 million, aided by foreign exchange and acquisitions, but organic revenues dipped 1%. Adjusted operating margin fell to 11.9% from 14.5%, reflecting a tougher profitability backdrop. Asia Pacific revenues increased 5% to $331.5 million, while GAAP and adjusted operating margin improved to 22.1%, pointing to better incremental performance in the region.

Trane Technologies Delivers Stronger Cash GenerationCash generation strengthened meaningfully. Cash from continuing operating activities rose to $636.2 million through March 31, 2026, compared with $345.5 million in the prior-year period. Free cash flow increased to $573.3 million from $230.2 million, supported by improved working-capital performance.

Capital deployment stayed active. Year to date through April, the company deployed or committed about $0.9 billion, including dividends, share repurchases and M&A. On the balance sheet, cash ended March at $1.07 billion, and total debt was $4.62 billion, reflecting a continued focus on liquidity and balance-sheet flexibility.

TT Raises 2026 Guidance on Demand VisibilityManagement raised its full-year 2026 outlook, now calling for reported revenue growth of roughly 9.5% and organic revenue growth of about 7% versus 2025. The company also guided to GAAP and adjusted continuing earnings of approximately $14.75 to $14.95 per share for the year, signaling confidence in execution and demand carryover.

The earnings presentation added modeling detail, including expectations for second-quarter organic revenue growth of around 5% and adjusted earnings of roughly $4.20-$4.25 per share. Other framework items include about $235 million of interest expense, an adjusted effective tax rate near 20%, roughly 222 million diluted shares, and higher capital spending expectations of 2%-3% of 2026 revenues, reflecting stepped-up investment levels.

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

Recent Earnings SnapshotsEquifax Inc. (EFX - Free Report) reported better-than-expected first-quarter 2026 results. EFX’s adjusted earnings per share of $1.86 beat the Zacks Consensus Estimate by 10.1% and increased 21.6% from the year-ago quarter. EFX’s revenues of $1.6 billion surpassed the consensus estimate by 2.3% and improved 14.4% year over year.

Rollins, Inc. (ROL - Free Report) posted impressive first-quarter 2026 results. ROL’s adjusted earnings of 24 cents per share matched the consensus mark and rose 9.1% from the year-ago quarter. ROL’s total revenues of $906.4 million surpassed the consensus mark by 1.3% and increased 10.2% year over year.

SWORDS, Ireland--(BUSINESS WIRE)--Trane Technologies plc (NYSE: TT) a global climate innovator, today announced that company leadership will participate in a fireside chat at the Wolfe Research Global Transportation & Industrials Conference. They will speak at 9:15 a.m. ET on Wednesday, May 20, 2026. The live webcast will be accessible on the Trane Technologies website at www.tranetechnologies.com under the investor relations section. An archive of the webcast will be available for 30 days.

I reiterate my buy rating on Trane Technologies (TT) as commercial HVAC demand and order momentum continue to strengthen, supporting future topline growth. Q1 saw Americas orders accelerate to 29%, with Commercial HVAC up >40% and Applied orders up >160%, boosting growth visibility into 2H26 and beyond. TT's strong domestic manufacturing footprint minimizes tariff risks, enhancing its competitive position and pricing power amid recent Section 232 tariff updates.

Trane Technologies plc (TT) Presents at Bank of America 33rd Annual Industrials, Transportation and Airlines Key Leaders Conference Transcript

Trane Technologies plc (TT) Presents at Wolfe Research 19th Annual Global Transportation & Industrials Conference Transcript

Key Takeaways Trane Technologies' shares have risen 11.6% over the past six months against the industry's 3.3% decline.TT recently reported a record backlog of $10.7B, with Americas commercial HVAC bookings up 40% year over year.TT sees strong demand for AI & cloud infrastructure cooling systems, boosted by the Stellar Energy buyout. Trane Technologies plc (TT - Free Report) , a designer, manufacturer, seller and servicer of climate control products for heating, ventilation and air conditioning ("HVAC") and transport solutions, has delivered an impressive performance over the past few months and shows potential to sustain its momentum in the near term. Therefore, if you have not taken advantage of the share price appreciation yet, you should add the stock to your portfolio.

What Makes TT an Attractive Pick?An Outperformer: A glimpse at the company’s price trend reveals that the stock has had a decent run over the past six months. Shares of Trane Technologies have risen 11.6% against 3.3% decline in the industry it belongs to.

Solid Rank: TT currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities for investors. 

Northward Estimate Revisions: Over the past 60 days, five earnings estimates for 2026 have moved northward, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2026 earnings has increased 0.5% during this period.

Impressive Earnings Surprise History: TT has an impressive earnings surprise history. The company's earnings have outpaced the Zacks Consensus Estimate in each of the past four quarters, delivering an average surprise of 2.7%.

Strong Growth Prospects: The Zacks Consensus Estimate for Trane Technologies’ second-quarter 2026 earnings is pegged at $4.27 per share, indicating 10.1% year-over-year growth. For 2026, the consensus estimate is pegged at $14.83 per share, implying 13.6% year-over-year growth.

Growth Factors: Trane Technologies’ growth is primarily driven by the strong demand for its commercial HVAC, energy-efficient solutions and data center cooling infrastructure. Rising global energy demand, sustainability trends and digitalization further support long-term growth. Robust demand in the commercial HVAC business, particularly in the Americas, is accelerating revenue generation. TT reported Enterprise organic bookings growth of 24% year over year in the first quarter of 2026, while total backlog climbed to a record $10.7 billion, up more than 30% from year-end 2025. Commercial HVAC bookings in the Americas rose approximately 40% year over year during the same period.

TT also highlighted strong demand from data centers, where customers require advanced cooling technologies and highly engineered systems designed to support rapidly expanding artificial intelligence ("AI") and cloud infrastructure. During the latest quarterly earnings conference, management stated that the acquisition of Stellar Energy Americas, Inc. in February 2026 added nearly $1 billion to the backlog and further strengthened Trane Technologies’ position in the fast-growing modular cooling market.

Past acquisitions, such as Brainbox AI, have enabled TT to achieve measurable reductions in energy consumption and improvements in sustainability by lowering carbon emissions, thereby adding considerable value to HVAC services provided to buildings.

The company’s operational excellence offsets inflation and tariff pressures. Trane Technologies reported 3% year-over-year Enterprise organic revenue growth in the last quarter, while adjusted earnings per share rose 7%. TT expects to further mitigate tariff and inflationary pressures through operational excellence initiatives, productivity improvements and pricing actions.

Trane Technologies had a current ratio (a measure of liquidity) of 1.1 in the first quarter of 2026, which improved marginally from the preceding quarter's 1.09 due to an increase in cash reserves. A current ratio of above 1 enables the company to pay off short-term obligations efficiently.

Other Stocks to ConsiderSome other top-ranked stocks in the broader Zacks  Business Services sector are FactSet Research Systems Inc. (FDS - Free Report) and TransUnion (TRU - Free Report) .

FactSet Research Systems carries a Zacks Rank #2 at present. It has a long-term earnings growth expectation of 6.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

FDS' earnings beat estimates in two of the last four reported quarters and missed twice, delivering an average surprise of 0.4%.

TransUnion also holds a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 13.5%.

TRU's earnings beat estimates in each of the last four quarters, with the surprise being 6.3%, on average.

SWORDS, Ireland--(BUSINESS WIRE)--Trane Technologies (NYSE:TT), a global climate innovator, has been recognized for continued leadership in sustainability and climate innovation through inclusion on the Dow Jones Best-in-Class World and North American Indices and the Financial Times Europe's Climate Leaders 2026 list. The Dow Jones Best-in-Class Indices are among the longest-running global benchmarks for corporate sustainability performance. Trane Technologies has been named to the World Index.

SWORDS, Ireland--(BUSINESS WIRE)--The Board of Directors of Trane Technologies plc (NYSE:TT), a global climate innovator, declared a quarterly dividend of $1.05 per ordinary share, or $4.20 per share annualized. The dividend is payable on September 30, 2026, to shareholders of record as of September 4, 2026. Since March of 2020, Trane Technologies has raised the quarterly dividend by more than 98 percent. Trane Technologies has paid consecutive quarterly cash dividends on its common shares sinc.

SWORDS, Ireland--(BUSINESS WIRE)--Trane Technologies (NYSE: TT), a global climate innovator, today announced the appointment of Donny Simmons as Chief Operating Officer (COO), reporting to Chair and CEO Dave Regnery, effective July 1, 2026. In this expanded role, Simmons will oversee the company's regional business units and operations, driving tighter business and operational alignment and accelerating execution of the company's growth strategy. Since launching as a pure-play climate innovatio.

AutoZone, Inc. remains a long-term compounder despite recent margin pressure, slower EPS growth, and a pullback to $3,000. AZO's Q3 saw record sales of $4.84 billion (+8.5% YoY), positive comps, and EPS of $38.07, but gross margin fell 57 bps to 52.2%. Buybacks remain a key value driver, with 164,000 shares repurchased this quarter and only 16.4 million shares outstanding.

AutoZone NYSE: AZO is a buy-and-hold quality stock nearly beyond compare. The company’s management, strategy, market position, market trends, operational quality, cash flow, and capital returns are a recipe for ever-growing value, as reflected in the long-term price action. AZO’s stock price advanced approximately 500% from the pandemic low to the 2025 peak, and additional highs are still likely in 2026.

AutoZone Today

$3,070.69 -10.93 (-0.35%)

As of 10:26 AM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$2,928.11▼

$4,388.11P/E Ratio21.13

Price Target$4,040.87

The takeaway in 2026 is that the AZO market is experiencing a much-needed price correction and setting up a buying opportunity of generational proportions. It may take some time for AZO’s market to regain traction and resume its uptrend, but it will, and when it does, the gains could be explosive. Catalysts include international expansion, market share gains, business optimization, and aggressive share buybacks.

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The company is expanding aggressively in Latin America, specifically in Mexico and Brazil, where middle-class expansion is fastest. Meanwhile, the company also focuses on capturing the fragmented commercial auto parts markets and driving supply chain efficiency through digitization. The critical factors are earnings growth, cash flow, and aggressive share buybacks. The company is well regarded as an efficient steward of capital, reducing its share count significantly on both a quarterly and an annual basis. Q1 activity amounted to $586 million, about 92% of operating profits, reducing the count by an average of 2% on a trailing 12-month (TTM) basis.

Mixed Results Favor AutoZone InvestorsAutoZone reported a mixed quarter with revenue for its fiscal Q3 2026 falling short of the consensus estimate. However, the $20 million miss was slim and easily overlooked in light of the 8.5% growth and margin strength. Revenue growth was underpinned by increases in store count in the U.S., Mexico, and Brazil, compounded by a 3.9% systemwide comp. Comps rose by 4.1% domestically and 1.6% internationally, below expectations but still a healthy gain.

Margin news was also mixed, which was central to the stock price decline. However, the gross margin reduction and overall impact are less than feared, leaving operating profit up approximately 6.5% year over year and GAAP earnings per share well ahead of the consensus forecast. At $38.07, GAAP earnings were nearly $2 above expectations and 5.5% better than expectations, sufficient to sustain operations and capital returns while enabling strategy execution.

AutoZone’s balance sheet provides no red flags. The company’s cash balance held relatively steady despite the increased investment and robust capital return. Other highlights include increased inventory and total assets, and a reduction in deficit. Normally a problem, the shareholder deficit results from share buybacks and is likely to persist over time. AutoZone has returned more than $12.5 billion to investors over the past decade, approximately 25% of its late-May market cap.

AutoZone Market Over Reacts to Results: Deepens Value OpportunityAutoZone Stock Forecast Today12-Month Stock Price Forecast:
$4,040.87
30.92% Upside

Moderate Buy
Based on 27 Analyst Ratings

Current Price$3,086.55High Forecast$4,800.00Average Forecast$4,040.87Low Forecast$3,200.00AutoZone Stock Forecast Details

Analyst trends have contributed to AutoZone’s 2026 stock price weakness, as some price targets were reduced early in the year. The caveat is that this market overreacted to the adjustment, compounding the move in late May after the fiscal Q3 release.

Trading near $3,000, AZO stock is 20% below the lowest price target tracked, while analyst consensus forecasts more than 40% upside. The likely result is that AZO reaches bottom sometime in late Q2 or early Q3, and begins to regain traction later in the year.

Institutional trends are among the reasons why the AZO stock price is nearing its bottom. The institutional group owns approximately 93% of the shares and has accumulated on a TTM basis.

Price action in late May has entered the range where institutional buying was strongest, suggesting a robust response from this group is forthcoming. If not, AZO’s stock price could enter a sustained downtrend, but that is not indicated by the results, analysts' trends, or chart price action.

The chart price action reveals a mid-term downtrend, with an increasingly strong chance of a rebound. While price action moves lower, the MACD is diverging, and the stochastic is deeply oversold, suggesting bears have lost control and all the bulls need is a trigger to start buying. That could be as simple as the valuation, which suggests a 50% discount to the five-year outlook, but may require more tangible news, which may not be revealed until the company's fiscal Q4 earnings results are released.

The biggest risk for AutoZone this year is margin compression. While the impacts of aggressive expansion are manageable, produce results, and will slow over time, rising costs are more of a concern and may continue eroding results. The question is whether efficiencies gained from the “Mega Hub” strategy will be enough to support margin recovery over time.

Should You Invest $1,000 in AutoZone Right Now?Before you consider AutoZone, you'll want to hear this.

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AutoZone (AZO 0.40%) stock is getting hit with a big sell-off in Tuesday's trading. The company's share price was down 9.6% as of 2:45 p.m. ET.

Before the market opened this morning, AutoZone published results for the third quarter of its current fiscal year -- a period that ended May 9. While the company posted a significant earnings beat in the quarter, sales fell short of the average analyst estimate.

Image source: Getty Images.

AutoZone's Q3 earnings beat wasn't enough for investors AutoZone posted earnings per share of $38.07 on revenue of $4.84 billion in fiscal Q3. While the company's per-share profit topped the average analyst forecast by roughly $1.90, sales for the period came in $20 million below the average forecast.

Despite the overall earnings beat, there were some concerning elements when it came to the broader margins picture. AutoZone recorded a gross margin of 52.2% in the quarter -- down 57 basis points from the margin it posted in last year's quarter.

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What's next for AutoZone? AutoZone is guiding for the opening of roughly 160 new stores this quarter -- up from 121 openings in last year's quarter. The performance is projected to bring total new global store openings to roughly 365 for the fiscal year, and expansion momentum continues to look encouraging. On the other hand, the company is facing some near-term earnings pressures that extend beyond location expansion.

In its fiscal Q3 report, AutoZone said it expected last-in, first-out accounting dynamics to create a roughly $30 million headwind to earnings before interest and taxes and a roughly $1.40 headwind to earnings per share. While overall momentum for the business continues to look solid, investors are bristling in response to some margin declines and a softer near-term earnings outlook.

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

AutoZone, Inc. reported strong EPS but missed on revenue and experienced gross margin contraction, prompting a cautious Hold rating despite the recent price drop. AZO benefits from the aging U.S. vehicle fleet and ongoing store expansion but faces weak DIY traffic and inflation-driven margin pressures. Commercial sales growth is robust, yet this segment carries lower margins, contributing to recent profitability headwinds and a mixed outlook.

AutoZone, Inc. (NYSE:AZO) on Tuesday reported stronger third-quarter revenue growth.

The automotive-parts retailer, which serves both do-it-yourself customers and professional mechanics through its stores and online platforms, reported third-quarter earnings of $38.07 per share, beating analyst estimates of $36.10. Revenue increased 8.4% year over year to $4.84 billion, ahead of Wall Street expectations of $4.83 billion.

AutoZone shares dipped 24.8% to $138.98 in pre-market trading.

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

Baird analyst Justin Kleber maintained the stock with a Neutral and lowered the price target from $3,900 to $3,600. BMO Capital analyst Tristan Thomas-Martin maintained AutoZone with an Outperform rating and lowered the price target from $4,300 to $4,000. Considering buying AZO stock? Here’s what analysts think:

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