Track market-moving stories before they get noisy

Key Takeaways Humana targets insurance margins above 3% by 2028 through pricing and market exits.CenterWell revenues rose 19.7% year over year to $6.1 billion in Q1 2026 amid tech investments.Humana remains on track to serve 7.3 million Medicare Advantage members in 2026. Humana Inc. (HUM - Free Report) has spent the past two years dealing with higher medical costs as more seniors returned for treatments that were delayed during the pandemic. The pressure weighed heavily on Medicare Advantage margins and profitability. The company is now shifting its focus from membership growth to earnings improvement, with the goal of restoring insurance margins to above 3% by 2028.

We’re already seeing early signs of a turnaround. Humana’s first-quarter 2026 adjusted earnings were $10.31 per share, which topped the Zacks Consensus Estimate by 3.5% as medical cost trends began to moderate. Its vital insurance benefit ratio dropped to 89.4% under management’s 90% ceiling. Despite a turbulent industry landscape, HUM remains on track to achieve approximately 25% growth in individual Medicare Advantage membership this year, showing the resilience of its core business.

The company is pursuing disciplined pricing, exiting less profitable markets, and implementing streamlining initiatives, including the sale of its remaining stake in Gentiva, to free up cash. However, HUM’s real competitive advantage lies in its ability to integrate technology with patient care. A prime example is CenterWell, whose revenues increased 19.7% year over year to $6.1 billion in the first quarter of 2026. By investing in digital tools and automation, Humana is cutting out messy administrative overhead while keeping patient care highly efficient.

Headwinds like Medicare funding pressures aren't vanishing overnight. Humana's early progress suggests its turnaround strategy is genuinely gaining traction. With a sharper focus on profitability, operational efficiency, and integrated care, it finally looks well positioned to navigate the challenges ahead.

How Are Humana's Peers Positioned?Humana is not the only health insurer facing elevated medical costs. Peers like UnitedHealth Group Incorporated (UNH - Free Report) and Elevance Health, Inc. (ELV - Free Report) have also faced pressure from higher healthcare utilization in recent years.

UnitedHealth has been affected by rising Medicare Advantage costs, but its diversified business model provides some protection. UNH's Optum segment, which spans healthcare services, pharmacy benefits and technology solutions, helps offset pressure on its insurance operations and supports earnings stability.

Elevance Health has likewise reported elevated medical costs as members continue to seek healthcare services at higher rates. While insurance remains its core business, Elevance benefits from a diversified mix of commercial, Medicaid and Medicare plans, which helps reduce dependence on any single market.

HUM’s Price Performance, Valuation and EstimatesShares of HUM have gained 40.2% year to date, outperforming the broader industry’s 22.2% increase.

Image Source: Zacks Investment Research

From a valuation standpoint, HUM trades at a forward price-to-earnings ratio of 30.26X, up from the industry average of 17.69X. Humana carries a Value Score of B.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for HUM’s 2026 earnings implies a 47.4% deterioration year over year, followed by a 66.1% improvement next year.

Image Source: Zacks Investment Research

The stock 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 AJG acquired Cincinnati Benefit Solutions to expand its employee benefits consulting presence.AJG is enhancing its reach among small and mid-sized employers in the Cincinnati market.AJG sees employee benefits as a source of recurring revenue, retention and cross-selling opportunities. Arthur J. Gallagher & Co. (AJG - Free Report) has strengthened its employee benefits solutions through the acquisition of Cincinnati Benefit Solutions, LLC, an Ohio-based employee benefits consulting firm serving small businesses in Cincinnati and its nearby areas. The acquired firm's leadership and employees will remain in place and operate under Gallagher's Great Lakes employee benefits division.

Cincinnati Benefits Solutions specializes in employee benefits consulting for small businesses, adding to Gallagher's existing benefits advisory capabilities. This acquisition enhances Gallagher’s presence in the Cincinnati market and broadens its reach among small and mid-sized employers seeking benefits solutions.

The deal is relatively small compared to other Gallagher deals, but it aligns with the company's broader acquisition-led growth strategy to expand its service offerings and market presence. It should contribute incremental revenues, strengthen client retention and enhance Gallagher's employee benefits platform.

For Gallagher, employee benefits are an important growth and revenue stream that supports client-retention business, especially as healthcare costs rise. It also creates cross-selling opportunities across Gallagher's broader insurance brokerage and risk management operations. By expanding its employee benefits footprint, the company is strengthening a business line that offers recurring revenues, strong client retention and long-term growth potential.

The acquisition underscores AJG’s commitment to building scale in employee benefits consulting, complementing its broader insurance brokerage and risk management platform while supporting sustainable long-term growth.

How Are Competitors Faring?Peers like Brown & Brown, Inc. (BRO - Free Report) and Aon plc (AON - Free Report) are also expanding their employee benefits solutions through acquisitions.

BRO has also expanded its employee benefits platform through acquisitions of regional benefits agencies and consulting firms. The company views employee benefits as a recurring revenue business that complements its broader insurance brokerage operations while creating opportunities for deeper client relationships and cross-selling.

Aon significantly expanded its employee benefits, retirement and wealth advisory capabilities through its acquisition of NFP, including Salus Group, Anchor Group and Pilot Benefits Group. The acquisitions strengthened AON's position in the middle-market benefits space and enhanced its small-business benefits capabilities.

AJG’s Price Performance, Valuation & EstimatesShares of AJG have dropped 32% compared with the industry’s decline of 39.8%.

Image Source: Zacks Investment Research

From a valuation standpoint, AJG trades at a forward price-to- earnings ratio of 15.43X, higher than the industry average of 14.5X.

Image Source: Zacks Investment Research

The consensus estimate for 2026 earnings per share (EPS) and revenues indicates a year-over-year increase of 23.9% and 21.6%, respectively.

The consensus estimates for AJG’s 2027 EPS and revenues indicate a year-over-year increase.

The Zacks Consensus Estimates for 2026 and 2027 earnings moved 0.4% and 0.5% north, respectively, in the last 60 days.

Image Source: Zacks Investment Research

AJG 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 Acuity Brands is expected to post modest sales growth, driven by double-digit expansion in the AIS segment.QSC integration, cross-selling opportunities and building-automation offerings are supporting AIS momentum.Margin gains from cost discipline and business mix may help offset lighting weakness & tariff pressures. Acuity Brands, Inc. (AYI - Free Report) is scheduled to announce third-quarter fiscal 2026 results on June 25, before the opening bell.

In the last reported quarter, the company’s adjusted earnings surpassed the Zacks Consensus Estimate by 3.4% while the net sales missed the same by 1.9%. On a year-over-year basis, both metrics increased 11% and 4.9%, respectively.

Acuity Brands beat earnings estimates in each of the trailing four quarters, with an average surprise of 8.4%.

How are Estimates Placed for AYI Stock?For the fiscal third quarter, AYI’s Zacks Consensus Estimate for earnings per share (EPS) has increased to $5.20 from $5.16 in the past seven days. The estimated figure indicates an increase of 1.6% from $5.12 per share reported in the year-ago quarter.

The consensus mark for net sales is pegged at $1.18 billion, indicating a 0.4% increase from the year-ago reported figure.

Factors to Shape Acuity Brands’ Q3 ResultsSales

During the fiscal third quarter, Acuity Brands' top-line performance is expected to have inched up year over year, as the Acuity Intelligent Spaces (AIS) segment continues to be a key growth engine. The AIS segment is likely to have been sailing the ship forward through enhanced building intelligence, efficiency and user experience through platforms Atrius and Distech Controls. The acquisition and integration of QSC, LLC in January 2025 into the AIS segment is expected to have boosted the growth further. The integration of QSC continues to progress well, enabling cross-selling opportunities and expanding capabilities through the Q-SYS platform. Besides, recent innovations, including scalable AV solutions for smaller collaboration spaces and enhanced building automation offerings, further strengthen the segment’s value proposition.

This growth trajectory is likely to have been subdued to some extent during the fiscal third quarter by the weak performance of the Acuity Brands Lighting (ABL) segment. The segment’s poor contribution to Acuity Brands’ sales performance is expected to have been due to lower net sales within the direct sales network.

Segment-wise, for the to-be-reported quarter, our Zacks model predicts total ABL segment (contributed 77.4% to the second quarter of fiscal 2026 net sales) revenues to decline 0.3% year over year to $920.1 million. Within the ABL segment, we expect Independent Sales Network and Retail revenues to increase 1.8% and 0.7%, respectively, while Corporate Accounts, Direct Sales Network and Other revenues are anticipated to decrease 4.1%, 11.6% and 3.6%, respectively, year over year.

Our model predicts the AIS segment’s (contributed 23.5% to the second quarter of fiscal 2026 net sales) revenues in the fiscal third quarter to climb 13.1% year over year to $298.8 million.

Margins

The bottom line is likely to have been supported by continued cost discipline, productivity improvements and a favorable business mix, with the higher-margin AIS segment contributing meaningfully to overall profitability. Strategic pricing actions and ongoing operational efficiencies are likely to have helped mitigate external pressures, including tariffs, while strong cash flow generation and disciplined capital allocation are expected to have further supported earnings growth.

We expect the company’s adjusted EBITDA margin to increase 40 basis points (bps) year over year in the fiscal third quarter to 20.4%. We project adjusted operating margin to inch up 20 bps to 19% year over year.

However, these tailwinds are expected to have been partially offset by persistent softness in the lighting market, tariff-related cost volatility and the normalization of previously elevated backlog levels, which are likely to have weighed on near-term growth momentum.

What Our Model Indicates for AYIOur proven model does predict an earnings beat for Acuity Brands this time around. The company has the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the odds of an earnings beat.

AYI’s Earnings ESP: The company has an earnings ESP of +0.63%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

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

Other Stocks With the Favorable CombinationHere are some other companies in the Zacks Business Services sector that, according to our model, have the right combination of elements to post earnings beats in the quarter to be reported.

V2X, Inc. (VVX - Free Report) has an Earnings ESP of +0.41% and currently carries a Zacks Rank of 2.

V2X’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 22.8%. V2X’s earnings for the third quarter of 2026 are expected to increase 9%.

Insperity, Inc. (NSP - Free Report) presently has an Earnings ESP of +6.06% and a Zacks Rank of 3.

Insperity’s earnings beat estimates in one of the trailing four quarters and missed on the other three occasions, with an average negative surprise of 61.1%. Insperity’s earnings for the third quarter of 2026 are expected to increase 26.9%.

WEX Inc. (WEX - Free Report) currently has an Earnings ESP of +4.82% and a Zacks Rank of 3.

WEX’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 4.8%. WEX’s earnings for the third quarter of 2026 are expected to increase 28.1%.

Artificial intelligence is reshaping the semiconductor industry in ways few investors anticipated just a few years ago. The early winners were obvious: Nvidia (NASDAQ:NVDA | NVDA Price Prediction) dominated AI accelerators, while memory makers like Micron Technology (NASDAQ:MU) are benefiting from soaring demand for high-bandwidth memory. 

Now the battle is shifting toward a less glamorous but equally important component of AI infrastructure — the CPU. That shift helps explain why SoftBank CEO Masayoshi Son believes Arm Holdings (NASDAQ:ARM) could increase its value tenfold from its current market capitalization of roughly $390 billion. It is an ambitious prediction, but unlike many bold technology forecasts, there is a tangible roadmap behind it.

Arm Is Expanding Beyond Its Traditional Business For decades, Arm operated one of the most profitable business models in technology. The company designed processor architectures and licensed them to companies such as Apple (NASDAQ:AAPL), Qualcomm (NASDAQ:QCOM), and Samsung. Last year, royalty and licensing revenue generated over $4 billion without Arm needing to manufacture a single chip. That model may be changing.

Arm is moving into supplying complete processors rather than simply licensing intellectual property. Instead of collecting a royalty on every chip sold, Arm could capture a much larger share of the economics by selling finished products.

The strategy mirrors what Nvidia accomplished when it evolved from a graphics chip designer into a full-stack AI infrastructure provider. For Arm, the opportunity is even larger because CPUs remain the central nervous system of every computing platform.

SoftBank has also invested heavily in Intel‘s (NASDAQ:INTC) foundry business, creating a potential manufacturing partner outside of Taiwan Semiconductor Manufacturing (NASDAQ:TSM). While Arm has no plans to build fabrication plants itself, access to multiple manufacturing partners could support a direct-chip strategy.

AI Is Turning CPUs Into Critical Infrastructure Again Son’s thesis depends on one major assumption: AI becomes increasingly CPU-intensive. That sounds counterintuitive because Nvidia’s GPUs currently dominate AI training. Yet GPUs cannot operate independently. CPUs manage memory, route data, coordinate workloads, and keep AI systems running efficiently.

As AI increasingly shifts toward inference — the process of running trained models in real-world applications — CPU performance and power efficiency become increasingly important. This trend is already visible across the industry:

Company ARM-Based CPU Platform Amazon (NASDAQ:AMZN) AWS Graviton Microsoft (NASDAQ:MSFT) Azure Cobalt Google Cloud Axion Nvidia Grace According to Amazon, Graviton-powered instances now account for more than half of newly added server capacity. Meanwhile, Nvidia pairs its Grace CPU with Blackwell AI systems, making ARM architecture a core component of its AI infrastructure strategy.

The result is mounting pressure on Advanced Micro Devices‘ (NASDAQ:AMD) EPYC processors and Intel’s Xeon lineup. UBS estimates ARM-based chips could capture 40% to 45% of server CPU shipments by 2030.

Can Arm Really Challenge AMD and Intel? The answer increasingly appears to be yes. For decades, AMD and Intel benefited from the dominance of x86 architecture. However, AI data centers face a new constraint: power consumption.

ARM’s architecture was originally designed for smartphones, where energy efficiency is paramount. As a result, ARM-based processors often deliver higher performance per watt than competing x86 chips. That is important when hyperscalers are spending tens of billions of dollars annually on power, cooling, and data center expansion.

The advantage is not merely theoretical. Amazon, Microsoft, Google, and Nvidia are all deploying custom ARM silicon instead of relying exclusively on AMD or Intel. In effect, the largest cloud companies are creating their own alternatives to the traditional CPU vendors.

At the same time, ARM benefits regardless of which customer wins because it sits in the middle collecting licensing fees — and potentially much larger hardware profits if its direct-chip strategy succeeds.

Key Takeaway In short, Masayoshi Son’s prediction is aggressive, but it is not built on fantasy. Arm is benefiting from two powerful trends simultaneously: the rise of custom AI silicon and growing demand for energy-efficient CPUs.

Granted, a jump from roughly $390 billion to $4 trillion would require flawless execution, broader adoption of ARM servers, and success in selling its own processors. That is a tall order. Yet the company is no longer competing solely in smartphone chips. It is positioning itself at the center of AI infrastructure, cloud computing, and next-generation PCs.

For investors, the key question is not whether Arm will 10X tomorrow. It is whether ARM architecture becomes the foundation of the AI era. If that happens, Son’s forecast may look less outrageous than it does today.

Key Takeaways Encore Capital is benefiting from strong U.S. supply, elevated lending and near-peak charge-offs.ECPG's global collections rose 19% to a record $718.4 million in the first quarter of 2026.Tech gains are lifting collections, but legal costs, funding pressure and Cabot weakness remain risks. Encore Capital Group (ECPG - Free Report) is showing how the debt-recovery cycle is shifting. Strong U.S. supply and better collection tools are lifting results, while costs and funding remain pressure points.

The next phase depends on whether technology-driven collection gains can offset legal expense growth, Europe’s slower backdrop and higher interest costs.

How ECPG Reflects a Stronger U.S. Recovery CycleEncore’s U.S. business is benefiting from elevated lending activity, near-peak charge-off levels and stable delinquency trends. Those conditions are supporting a steady flow of receivable portfolios.

The U.S. cycle matters because debt buyers need both supply and capital to scale profitably. Encore’s size and funding flexibility help it compete as smaller buyers face regulatory and financing constraints.

The first quarter of 2026 showed that backdrop in action. Midland Credit Management, Encore’s U.S. platform, posted portfolio purchases of $315.8 million, one of its strongest U.S. purchasing quarters.

PRA Group, Inc. (PRAA - Free Report) gives investors a direct peer reference because it also acquires and collects nonperforming loans. For both companies, portfolio supply and collection efficiency are central to earnings.

How Encore Capital Uses Tech to Lift CollectionsTechnology is becoming more than an efficiency project. New tools, digital capabilities and operating innovation are helping Encore reach more consumers and expand its payer base.

That showed up in collections. Global collections rose 19% year over year to a record $718.4 million in the first quarter of 2026, while U.S. collections increased 23% to $556 million.

The company also collected $46 million more than forecast in the quarter. Changes in expected future recoveries were positive by $16.7 million, showing that outperformance is starting to affect future expectations.

Management expects the benefit to shift over time from cash overs to stronger portfolio revenue as Estimated Remaining Collections curves adjust upward. That would make the technology impact more visible in revenues.

The Zacks Consensus Estimate for ECPG’s sales suggests growth of 5.5% for 2026 and 2.7% for 2027.

Image Source: Zacks Investment Research

Why ECPG Faces a Cost and Margin TestThe same collection environment that supports recoveries can also raise costs. Legal collection activity has increased, and those expenses have been rising faster than overall expenses.

That matters because legal collections can carry a higher fixed and semi-variable cost base. If collection growth slows, the expense structure could weigh on operating leverage and reduce cash efficiency margins.

Encore’s first-quarter cash efficiency margin improved to 60.9% from 58.3% a year earlier. Maintaining that margin profile will require collections growth to stay ahead of cost pressure.

Funding is another test. Borrowings totaled $4.03 billion as of March 31, 2026, and interest expense and other income are projected at about $300 million in 2026.

Why Encore Capital Shows a Split Global BackdropEncore’s geographic story is uneven. The United States remains the growth engine, helped by portfolio supply and stable consumer payment behavior.

Cabot, the company’s European business, remains in a slower market. The U.K. faces subdued consumer lending, low delinquencies and robust competition, limiting purchase growth.

Cabot still delivered collections of $161 million in the first quarter, up 7% year over year. The business is focused on cost control and operational execution.

Disciplined capital deployment in Europe protects returns but leaves ECPG more dependent on U.S. conditions. FirstCash Holdings, Inc. (FCFS - Free Report) offers a different consumer-finance comparison because its business centers on pawn operations rather than charged-off receivable purchases, giving investors another view of consumer-credit exposure.

How ECPG’s Ratings Frame These TrendsThe bottom line is that ECPG enters 2026 with better collection momentum, but margin durability remains the key test. Legal costs, borrowing costs and Europe’s slower backdrop could limit the benefit if U.S. collections cool.

Encore Capital has rallied sharply, with shares up 58.1% year to date. The move reflects stronger collections, favorable U.S. purchasing conditions and improving earnings expectations.

Image Source: Zacks Investment Research

The ECPG stock currently sports a Zacks Rank #1 (Strong Buy). That supports the view that earnings estimate direction remains favorable. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Style Scores add nuance. ECPG has a Value Score of B, which supports the relative value case, but its VGM Score of C is less forceful.

The Growth Score of D and Momentum Score of F suggest investors should watch execution rather than treat the stock as an all-clear growth or momentum play. The central question is whether digital gains can keep outpacing margin and funding headwinds.

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CoreWeave’s purpose-built AI cloud delivers further immediate capacity for European customers

STOCKHOLM--(BUSINESS WIRE)--CoreWeave, Inc. (Nasdaq: CRWV), The Essential Cloud for AI™, today announced a co-location agreement with Conapto, a provider of scalable, secure, and sustainable data centers. The arrangement encompasses two campuses in Stockholm, with initial capacity already online at Stockholm 4 South. Both campuses will be powered by renewable energy sources. The Stockholm deployment will provide AI innovators with access to CoreWeave’s AI cloud platform, designed specifically for the demands of modern AI workloads. CoreWeave Cloud combines high-performance compute, networking, storage and software orchestration to help customers scale AI development and deployment. The partnership extends CoreWeave’s ability to serve customers across Europe and reflects the disciplined approach the business is taking as it expands its international footprint.

This capacity, powered by NVIDIA Blackwell Architecture and NVIDIA Vera Rubin Platforms connected with NVIDIA Quantum-X800 InfiniBand, further expands CoreWeave’s European footprint, as demand from AI labs, enterprises, and developers building at scale across the continent continues to accelerate. As AI moves from experimentation to production, customers across Europe require high-performance infrastructure that is readily available and can match the pace of their workloads. This announcement also continues CoreWeave’s track record of servicing its European customers with the latest available technology.

“Sweden has been central to CoreWeave’s European strategy since our first continental investment,” said Sachin Jain, chief operating officer, CoreWeave. “Conapto’s local expertise and sustainable energy profile allows us to provide our customers what they need: urgent high performance AI compute with the reliability and environmental credentials that enterprise AI deployments demand.”

"We're excited to partner with CoreWeave to support the rapidly growing demand for their AI cloud platform," says Håkan Björklund, CEO, Conapto. "CoreWeave is at the forefront of AI innovation, and we're proud to provide the resilient, high-density infrastructure needed to power their next phase of growth. Combined with our commitment to 100 percent renewable energy and heat recovery to Stockholm's district heating network, this partnership demonstrates how advanced AI infrastructure and sustainability can go hand in hand."

CoreWeave and Conapto will participate at the Tech Arena at Almedalen on 25 June, contributing to discussions on Sweden’s growing role in AI infrastructure and Europe’s evolving AI capacity requirements.

Nine of the 10 leading foundation model providers are leveraging CoreWeave to stay at the frontier of AI. As of March 31, 2026, CoreWeave operates 49 data centres globally, with more than 1GW of active power and over 3.5GW of contracted power supporting AI workloads at scale. The Conapto agreement brings CoreWeave’s sites in Europe to eight.

CoreWeave's AI cloud delivers performance at every stage of the AI lifecycle, demonstrated by record-breaking MLPerf benchmark results in inference and training, its position as the only AI cloud to earn the top Platinum ranking in both SemiAnalysis ClusterMAX™ 1.0 and 2.0, and its #1 ranking for inference speed and price-performance for Moonshot AI’s Kimi K2.6 and Kimi K2.7 Code in independent inference benchmarking conducted by Artificial Analysis.

About CoreWeave

CoreWeave is The Essential Cloud for AI™. Built for pioneers by pioneers, CoreWeave delivers a platform of technology, tools, and teams that enables innovators to move at the pace of innovation, building and scaling AI with confidence. Trusted by leading AI labs, startups, and global enterprises, CoreWeave serves as a force multiplier by combining superior infrastructure performance with deep technical expertise to accelerate breakthroughs. Established in 2017, CoreWeave completed its public listing on Nasdaq (CRWV) in March 2025. Learn more at www.coreweave.com.

About Conapto

Conapto provides scalable, secure and sustainable data center colocation for companies to produce and deliver digital services. With four data centers and its headquarters in Stockholm, Conapto delivers reliable hybrid IT infrastructure designed for high performance, energy efficiency and long-term scalability – enabling the next generation of digital services. Learn more at www.conapto.com.

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Key Takeaways Ondas secured $40M in June orders, bringing Q2 orders and awards to more than $150M.Rotron's SkyLance completed UK MOD Project Brakestop tests, validating strike capabilities.Ondas is expanding beyond defense into precision-strike systems, widening its market reach. As governments race to modernize their military capabilities, companies capable of delivering integrated autonomous defense platforms are becoming beneficiaries. Among these emerging players, Ondas Inc. (ONDS - Free Report) recently announced more than $40 million in new orders in June. The deal highlights accelerating demand for the company's Counter-UAS, Loitering Munition Systems (LMS), robotic platforms and AI-enabled defense technologies. These awards follow more than $30 million of orders secured in May, resulting in over $150 million in second-quarter orders and awards.

A key part of Ondas' LMS strategy is Rotron Aerospace, its wholly owned U.K. subsidiary. Rotron recently completed successful flight tests of its SkyLance system under the UK Ministry of Defence's Project Brakestop, confirming the platform's long-range precision strike capabilities. Rotron's U.K. manufacturing facility positions Ondas well for future European procurement opportunities. Rather than relying only on defensive products, Ondas is expanding into offensive autonomous capabilities, offering customers both defensive and precision-strike options. This dual-market approach significantly broadens the company's total addressable market.

Ondas is also benefiting from broader structural trends in global defense markets. Governments across Europe, North America and allied nations continue increasing military budgets in response to shifting geopolitical risks. Although order announcements do not immediately generate revenue, they serve as key indicators of future business performance. A growing backlog improves revenue visibility, manufacturing efficiency, customer confidence, operating leverage and eligibility for larger defense contracts. If Ondas continues converting its pipeline into repeat orders while maintaining operational discipline, growing LMS demand could drive its next phase of revenue growth.

ONDS Navigating a Crowded Defense MarketDraganfly (DPRO - Free Report) and F4 Defense International secured an initial DEVCOM Army Research Laboratory contract to develop a modular, rapidly deployable counter-drone system that integrates tethered aerial platforms with drone detection, tracking, targeting and defeat capabilities for enhanced situational awareness and defense in contested environments. First-quarter revenue rose 49.4% to $2.3 million, driven by a 44.8% increase in product sales to $2.2 million. Quarterly sales were aided by strong demand from military customers, including an FPV drone order from the U.S. Army, reflecting its growing relationship with an existing defense customer. DPRO expanded its defense portfolio through the acquisition of Skip Dynamix's drone technology assets.

Unusual Machines (UMAC - Free Report) reported healthy first-quarter growth, with strong enterprise demand driving revenue gains, a 32.8% gross margin, expanded production capacity and a strengthened balance sheet following a $150 million equity raise. UMAC also advanced its integrated powertrain strategy through the $52 million Upgrade Energy deal and sees potential drone-delivery expansion by 2027. Per management, demand continues to exceed supply and is expected to remain strong through 2027, driven by rising defense drone procurement and emerging counter-drone programs. It is expanding production and securing raw materials to capitalize on growing demand, supported by increasing U.S. defense spending and a preference for domestic supply chains.

ONDS’ Price Performance, Valuation and EstimatesShares of ONDS have gained a whopping 433.1% in the past year against the Zacks Wireless-National industry’s decline of 14.2%

Image Source: Zacks Investment Research

ONDS seems overvalued, as suggested by the Value Score of F. In terms of the forward 12-month Price/Sales ratio, ONDS is trading at 8.03, considerably higher than the industry’s multiple of 1.65.

Image Source: Zacks Investment Research

For ONDS, earnings estimates for the current year have remained unchanged in the past 30 days.

Image Source: Zacks Investment Research

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

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Cerebras Systems CEO Andrew Feldman said Wednesday that investors "misunderstood" the artificial intelligence chipmaker's margin guidance, as shares slid 17% after the company reported results for the first time since going public.

Analysts at Mizuho and Wedbush raised their estimates following Cerebras' earnings call. But the company forecasted a narrower gross margin in its core business, excluding impact from customer warrants and data center pass-through revenues. The number was 47% for the first quarter, and it should be between 38% and 41% for the full year.

"It is misunderstood," Feldman said on CNBC's Squawk on the Street. "You know, we laid out a plan at the start of '26. We shared that plan as we went public a few months ago, and we're beating that plan."

He said management made clear that Cerebras will need to rent back some equipment from one of its largest clients.

"I think it's not going to be a straight line," he said.

Read more CNBC tech newsGoogle's online dominance is showing signs of cracking in AI eraOracle has cut 21,000 roles over the past year, adding to wave of tech AI layoffsTesla faces federal probe after Model 3 slams into Texas home, killing 76-year-oldSpaceX signs computing power deal with open-source AI startup Reflection worth up to $6.3 billionInvestors also must contend with Cerebras insiders being subject to a staggered timeline for lock-up restrictions. That includes about 28 million Class A Cerebras shares that directors, officers and non-employee shareholders can trade on the second trading day after Tuesday's earnings announcement, according to the company's prospectus.

The point was to smooth out the schedule, which typically comes after a set number of months after an initial public offering, Feldman said.

"Whether that's a success or not, we'll have to see," he told CNBC's Carl Quintanilla and Leslie Picker.

Rivals such as Nvidia are confronting supply shortages in high-bandwidth memory and a cutting-edge process from Taiwan Semiconductor Manufacturing Co., but Cerebras doesn't need either of those, Feldman said.

Cerebras is, however, facing pressure to open more data centers, as are cloud infrastructure providers, while public opposition mounts and permitting processes can drag on.

"We're trying to move at the speed of AI, and data centers move with the speed of real estate," Feldman said.

Cerebras stock chart.

Amazon's Zoox unveiled the "next evolution" of its toaster-shaped self-driving vehicle on Wednesday, adding more rider-friendly features ahead of a wider U.S. rollout this year.

The company said it's equipping the vehicles with higher-quality touchscreens, more comfortable seats and headrests, and small interior tweaks that will make it easier for passengers to spot forgotten items like keys and phones.

Zoox is also enlarging and relocating the robotaxi's "bidirectional reflectors," which help riders and others such as law enforcement distinguish the vehicle's front from its rear, so that they're easier to spot.

The updates come as Zoox is plotting expansion in additional markets and preparing to charge for rides later this year. The company, which Amazon acquired for $1.3 billion in 2020, is way behind Alphabet's Waymo, the U.S. robotaxi leader.

Waymo recently surpassed 500,000 weekly paid rides across 10 U.S. cities. It also plans to bring commercial service to several new cities this year, including London and Tokyo, the first international markets. By comparison, Zoox said Wednesday it has served more than 500,000 riders since it opened service in Las Vegas last September.

Zoox currently offers free rides in parts of Las Vegas and San Francisco, and it's allowing select users to hail its robotaxis in small areas in Miami and Austin, Texas. It's also testing in six other U.S. cities.

In March, Zoox struck a partnership with Uber to make its robotaxis available through its ride-hailing app in Las Vegas, enabling it to reach a wider potential customer base.

The Zoox robotaxis have been nicknamed "toasters" due to their shape. The vehicles have no steering wheel or pedals, and feature four carriage-style seats that face inward, giving them a shuttle-like atmosphere.

Zoox's biggest hurdle remains launching a paid service. The company is awaiting approval from the National Highway Traffic Safety Administration to operate as many as 2,500 of its self-driving cars on public roads for commercial purposes.

Zoox's petition is currently under review by NHTSA after public comments closed in early April.

Zoox said Wednesday that the redesigned robotaxi is its "production intent vehicle," and the company expects to introduce the model to its existing fleet later this year.

The company added that it will soon begin large-scale production of its robotaxis at its manufacturing facility in the San Francisco Bay Area that opened last June. The facility will help Zoox grow its robotaxi fleet, eventually producing 10,000 vehicles a year once it's at full scale.

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Read more CNBC tech newsGoogle's online dominance is showing signs of cracking in AI eraOracle has cut 21,000 roles over the past year, adding to wave of tech AI layoffsTesla faces federal probe after Model 3 slams into Texas home, killing 76-year-oldSpaceX signs computing power deal with open-source AI startup Reflection worth up to $6.3 billion

Key Takeaways Amazon expanded Bedrock with OpenAI models and managed agents to support enterprise AI deployments.AMZN's Bedrock spending rose 170% sequentially in Q1 2026, serving 125,000 customers.Nearly 80% of Fortune 100 companies are leveraging Bedrock for AI initiatives. Amazon (AMZN - Free Report) continues to build out the Bedrock ecosystem as enterprises move from AI experimentation toward larger-scale deployments. As companies look to integrate generative AI into customer engagement, software development and business operations, Bedrock is positioned as one of the platforms within Amazon Web Services (AWS) supporting this transition.

The company's approach centers on offering enterprises model choice, scalable infrastructure and tools intended to simplify the deployment of AI applications. Additions to Bedrock, including OpenAI models and managed agent capabilities, have strengthened the platform's capacity to support a wider range of enterprise workloads. These additions are intended to help organizations build and deploy AI applications while addressing security, reliability and operational requirements at scale.

Customer adoption trends suggest that enterprise demand is strengthening. Bedrock customer spending increased 170% sequentially in the first quarter of 2026, while token processing volumes during the quarter exceeded the cumulative total from all prior years. The platform is being used by over 125,000 customers, with nearly 80% of Fortune 100 companies leveraging Bedrock. These figures suggest a shift from initial testing toward broader integration into business workflows for at least some enterprise customers.

The growing adoption of Bedrock is expected to have broader implications for AWS. As enterprises scale AI deployments, demand often extends beyond AI models to include compute, storage, databases and analytics services. This creates opportunities for AWS to benefit from both AI-related spending and the expanding consumption of its core cloud offerings. AWS revenues increased 28% year over year to $37.6 billion in the first quarter. As enterprise AI adoption continues to mature, Bedrock's expanding ecosystem is likely to remain an important catalyst for AWS growth and the broader enterprise AI landscape.

AMZN Faces Stiff CompetitionAmazon is competing aggressively with Microsoft (MSFT - Free Report) and Alphabet (GOOGL - Free Report) for enterprise AI workloads. Microsoft has benefited from its close OpenAI relationship, integrating advanced models across Azure AI services and enterprise software offerings. Alphabet has been expanding Gemini and Vertex AI to help enterprises build and deploy AI applications on Google Cloud.

While Microsoft and Alphabet emphasize proprietary model ecosystems, Amazon's Bedrock strategy is centered on offering enterprises access to multiple leading foundation models through a single managed platform. This model choice, combined with AWS' broad cloud infrastructure portfolio, could help Amazon attract organizations seeking flexibility as enterprise AI adoption moves from experimentation to large-scale production deployments.

AMZN’s Share Price Performance, Valuation & EstimatesAmazon shares have jumped 1.4% in the year to date (YTD) period compared with the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s decline of 6.3% and 2.3%, respectively.

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

From a valuation standpoint, AMZN stock appears overvalued, trading at a forward 12-month price/earnings ratio of 24.88X, higher than the industry’s 20.71X. Amazon has a Value Score of D.

AMZN’s Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for AMZN’s 2026 earnings is pegged at $8.85 per share, indicating a 23.43% increase from the figure reported in the year-ago quarter.

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

Impact of coding artefacts on transport based topological gap detection. Credit: Nature (2026). DOI: 10.1038/s41586-026-10567-8 A critique from the University of St Andrews published in the journal Nature provides evidence that Microsoft's claimed quantum computing "breakthrough" was built on flawed foundations.

The critique, a comment on Microsoft's Nature paper from February 2025, comes after Microsoft's announcement of quantum chips that it claims will allow practical quantum computing within "years not decades." In contrast, the analysis by Dr. Henry Legg, from the St Andrews School of Physics and Astronomy, reveals that Microsoft's claim rested on coding errors and a flawed tuneup protocol and was seemingly contradicted by data not presented by Microsoft.

Dr. Legg said, "Last year Microsoft claimed it had built the equivalent of a precision Swiss watch. However, when I opened the case to examine the mechanism, I found what looked like a chaotic jumble of mismatched parts. Something was making noise, but it didn't look like the breakthrough Microsoft had claimed. Despite the headlines, the vast majority of scientists in the field were skeptical of Microsoft's claim from the start; my critique simply backs up that skepticism in the scientific record."

Quantum computers are predicted to solve complex problems that are impossible for current computers. It is claimed that they can discover new drugs, optimize global logistics and crack encryption. However, quantum states are incredibly fragile, prone to collapsing at the slightest interference from the outside world. To solve this, Microsoft bet heavily on a unique approach called "topological quantum computing." It aims to harness elusive particles called Majoranas to create qubits that are supposed to be immune to outside interference.

However, the existence of Majoranas remains unproven, and Microsoft's pursuit of this technology has faced major credibility issues before. In 2021, researchers funded by the company were forced to retract a previous Nature paper that claimed to have found evidence of Majoranas. The authors of that paper apologized for "insufficient scientific rigor."

The Topological Gap Protocol (TGP) was supposedly Microsoft's answer to these past failures—an automated software test designed to eliminate human bias and prevent false positives. Yet today's peer-reviewed critique provides evidence that this protocol is itself flawed. Legg's analysis reveals severe issues with how Microsoft used the TGP to validate its devices:

Simply shifting measurement windows can alter the protocol's outcome. This causes Microsoft's software to classify the exact same device region as either suitable for quantum computing ("gapped") or not suitable ("gapless") simply because of arbitrary measurement choices. Microsoft presented only the favorable outcomes of the protocol in its Nature publication. Contradictory results, where the TGP classified the purportedly successful regions as not suitable for quantum computing, were not shown. Coding errors in Microsoft's data processing caused it to omit and completely miss exploring other critical regions of the device's phase space, despite the explicit requests of peer reviewers for these checks. The raw conductance data, which Microsoft did not present in its original paper, reveals a highly disordered system. Instead of the pristine topological gap required for quantum computing, the data appears to show signatures of disorder and non-topological "quantum dots" that could explain Microsoft's measurements. This case highlights how rigorous scientific analysis can challenge even the largest technology corporations.

Legg concluded, "I am simply reflecting what most in the field felt from the initial announcement. I felt that I needed to put these concerns into a formal scientific critique. It is good that it has now been peer-reviewed and published."

Publication details Henry Legg, On the robustness of topological gap detection via transport, Nature (2026). DOI: 10.1038/s41586-026-10567-8. www.nature.com/articles/s41586-026-10567-8

Journal information: Nature

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In a research note released Wednesday, Bank of America Securities (BofA) maintained its Neutral rating on the footwear giant with a price forecast of $55.

Analyst Lorraine Hutchinson said investors are expected to focus more on Nike’s forward guidance than on its fourth-quarter performance.

The firm maintained a Neutral rating, saying earnings estimates appear to be nearing a bottom, but the timing of a sustained sales recovery remains uncertain amid China’s reset, sportswear category normalization, and volatile macroeconomic conditions.

While product innovation and North America remain bright spots, BofA said visibility on a sales rebound in China and stabilization in Europe is less clear.

Leadership Transition and Tariff BoostsNike announced David Denton will join the company as chief financial officer, effective August 17, bringing public company expertise from prior CFO roles at Pfizer, Lowe’s and CVS Health. Matt Friend will step down concurrently with Denton’s appointment.

The analyst noted that fourth-quarter results will benefit from a one-time tariff refund. Excluding this benefit, projected performance remains broadly in line with prior company guidance.

BofA models fourth-quarter earnings per share at 11 cents, matching consensus expectations, based on an estimated 3% decline in quarterly revenue.

Wholesale Performance Under MonitoringBofA indicators suggest that slower-than-expected wholesale sell-through continues to warrant caution following management commentary during the third-quarter conference call.

Analysts look for updates on wholesale trends, citing risks that prolonged weakness could lead to elevated discounting, product buybacks, or reduced reorders.

Additional headwind exposure remains for North American sales trends heading into the second quarter of fiscal 2027, as Nike laps a prior 24% wholesale growth period driven by off-price channel inventory.

Near-Term Softness Expected in ChinaThe research firm projects a sharper slowdown in the Greater China region, modeling a 20% decline in fourth-quarter sales. According to the note, Nike continues to pull back on digital promotions and reduce wholesale sell-in within the region.

Valuation and Outlook Inflection TimelineNike trades at a forward price-to-earnings multiple of 22.6 times, down from 31 times prior to the previous quarterly earnings release.

While BofA acknowledged encouraging early indicators within the running category and stable North American demand, the firm anticipates a definitive sales inflection remains several quarters away, limiting immediate opportunities for multiple expansion.

Gross margin improvements are projected to begin expanding in the second quarter of fiscal 2027 as tariff impacts subside.

Nike Earnings EstimatesNike is scheduled to report its fourth-quarter earnings on June 30. Analysts expect earnings per share of 12 cents and revenue of $10.85 billion, according to Benzinga.

In the third quarter, Nike reported earnings per share of 35 cents, surpassing analyst estimates of 28 cents. Revenue came in at $11.28 billion, ahead of the consensus estimate of $11.23 billion.

Nike has exceeded earnings-per-share estimates in each of the past eight consecutive quarters.

NKE Stock Price Activity: Nike shares were down 0.99% at $41.96 at the time of publication on Wednesday, according to Benzinga Pro data.

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Nvidia NVDA shares edged higher on Wednesday as the chipmaker stabilized following a broader semiconductor-sector selloff, with market participants assessing whether the stock is establishing a new trading range.

Despite recent volatility, the stock has largely held above the psychologically important $200 level since breaking out of its previous range in April.

The move comes as investors weigh Nvidia’s relative underperformance against the broader semiconductor sector.

The stock is up 7.3% so far this year, compared with a roughly 90% gain for the PHLX Semiconductor Index over the same period.

Still, technical and valuation signals suggest some support for the stock at current levels.

Nvidia has only briefly fallen below $200 in recent months and has tended to rebound on dips around that level.

The company is trading at a forward price-to-earnings ratio of 19.34 times, according to FactSet, slightly below the S&P 500 average of 20.77 times.

Analysts suggest this valuation could attract investors looking for relative value, potentially limiting further downside.

Nvidia is also returning significant capital to shareholders through dividends and buybacks, distributing about 50% of free cash flow.

Based on expected free cash flow of $195.35 billion in 2026, the company could return more than $97 billion to investors.

However, expectations for a sustained breakout remain tied to product cycle developments.

Investors are watching the rollout of Nvidia’s next-generation Vera Rubin chips, which are expected to enter the market in the second half of the year.

Market participants say the company will need to demonstrate continued dominance in artificial intelligence hardware to drive the next leg higher.

Nvidia’s AI chips have seen sharply higher prices on China’s black market, more than doubling over the past six months, according to a Financial Times report.

The increase comes amid tighter US enforcement of export controls restricting access to advanced semiconductors.

The DGX B300 server, which contains eight Blackwell graphics processing units, has risen in price to more than 8 million yuan ($1.1 million), up from around 4 million yuan, based on interviews with Chinese chip traders.

The system typically sells for about $400,000 in the United States.

Similarly, the RTX 6000 Pro workstation chip, used in large language model development, has increased from roughly 50,000 yuan at the start of the year to as much as 130,000 yuan, according to the report.

Both products are subject to US export restrictions on sales to China.

The surge in unofficial pricing follows a series of enforcement actions.

In March, a Supermicro co-founder, along with a Taiwan-based employee and a contractor, was charged with allegedly smuggling $2.5 billion worth of Nvidia AI servers to Chinese customers in what is described as the largest US enforcement case related to AI chip exports.

© wellesenterprises / iStock Editorial via Getty Images

Qualcomm (NASDAQ:QCOM | QCOM Price Prediction) shares have whipsawed into the chipmaker’s Investor Day, and our model says the post-selloff setup looks compelling on the data.

With the stock at $204.13 after a 8.01% single-day drop, our 24/7 Wall St. price target for Qualcomm is $278.13, implying 36.25% upside over the next 12 months. Our model frames this as a high-conviction setup with 90% confidence.

Metric Value Current Price $204.13 24/7 Wall St. Price Target $278.13 Upside 36.25% Model Stance Bullish (research view) Confidence Level 90% A Brutal Setup Into Investor Day Qualcomm has been the most volatile large-cap semi. Shares are down 4.64% over the past week and 13.96% over the past month, yet still up 20.57% year to date and 36.11% over the past year. Tuesday’s 8% slide was driven by SK Hynix HBM capacity slowdown, a Bank of America Underperform reiteration, and balance-sheet concerns around a reported $4 billion deal for AI software startup Modular and a rumored $8 to $10 billion bid for Tenstorrent.

Fundamentals remain solid. Q2 FY26 revenue of $10.60 billion and non-GAAP EPS of $2.65 both beat consensus, marking eight straight quarters of EPS beats. Automotive hit a record $1.33 billion (+38% YoY) and IoT grew 9%, while CEO Cristiano Amon confirmed the “leading hyperscaler custom silicon engagement is on track for initial shipments later this calendar year.”

Why Bulls See a Breakout Above $280 The bull case is straightforward: Qualcomm is no longer just a handset company. Combined Automotive plus IoT grew 20% YoY in Q2, the Alphawave Semi acquisition closed in Q1, and the pending Modular deal would hand Qualcomm a credible CUDA alternative via the MAX inference framework and Mojo programming language.

JPMorgan recently raised its target to $265, citing expectations that today’s Investor Day will reveal “significant data center revenue targets for 2027 and beyond.” Our bull-case scenario points to $288.34, a 41.25% return, with capital return cushioning downside via a fresh $20 billion buyback authorization.

The Risks Worth Watching Several headwinds warrant attention. Handsets fell 13% YoY in Q2, operating income dropped 26% YoY, and Q3 guidance of $9.2 to $10 billion revenue with EPS of $2.10 to $2.30 implies further sequential softness. Bank of America argues Qualcomm faces “hyper-competition in the AI data center market” with much upside already priced in, and the consensus analyst target sits at $183.83, below current levels.

GuruFocus flagged the stock as modestly overvalued versus a GF Value of $175.34, and net insider selling adds caution. The counterfactual: operating income compression reflects acquisition integration costs and heavy data center investment, and management still expects Chinese handsets to bottom in Q3 and grow sequentially in Q4. Our bear-case scenario lands at $222.75.

Qualcomm Price Prediction 2026 to 2030 Our 24/7 Wall St. price target of $278.13 reflects a buy rating with 90% confidence. At a PEG ratio of 0.958 and 21x forward earnings, Qualcomm trades at a discount to peers despite eight consecutive beats and entering two new multi-billion-dollar markets.

The thesis strengthens if today’s Investor Day confirms a concrete 2027 data center revenue ramp. The thesis weakens if management defers specifics and handset weakness extends past Q3.

Looking ahead, here is where our model projects Qualcomm could trade, assuming the data center ramp executes and Automotive growth holds.

Year 24/7 Wall St. Price Target 2026 $278 2027 $330 2028 $385 2029 $430 2030 $487 These projections assume Qualcomm executes on fiscal 2029 revenue goals and the hyperscaler silicon program scales. Significant upside or downside could result from Modular and Tenstorrent integrations, China policy shifts, or Apple modem insourcing accelerating faster than expected.

Adobe (ADBE +0.67%) shares have plunged by more than 40% year to date. The stock trades below $200, a far cry from when the stock nearly touched $700 per share.

Artificial intelligence is on most investors' minds, especially with how easy it is to create images with AI tools. However, this fear has resulted in an unreasonably low valuation for a company that is still growing.

Image source: Getty Images.

Addressing the AI concern Software stocks sold off broadly amid concerns that artificial intelligence would replace software businesses, rendering them obsolete. Claude's Cowork demonstrated that its generative AI could replace software. While it's a major AI innovation, it's easy for investors to overestimate how quickly new technology will move and whether existing software businesses will become obsolete.

Adobe isn't the only software stock that has tumbled amid fears that SaaS companies may no longer be needed. Salesforce and Workday were both hit hard. Those two stocks have also lost more than 40% year to date.

While the surrounding narrative about Adobe and AI is that advanced technology can make Adobe obsolete, that is an extreme exaggeration that has driven the company's attractive 11 P/E ratio. Adobe's P/E ratio was in the mid-20s less than a year ago and comfortably held that position. Adobe can more than double in valuation alone.

Even the concerns about images are overblown. Getty Images proved there's little to worry about by securing a long-term deal with OpenAI. While AI is changing the digital landscape, investors are trading Adobe stock as if it were doomed to fail and wouldn't adapt.

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Adobe's fundamentals point to long-term growth Looking at Q1 results and the press release commentary makes the AI-fueled panic even more bizarre. Adobe delivered 12% year-over-year revenue growth in Q1, raised its full-year guidance, and cited "strong AI-driven demand across customer groups" as a major catalyst.

The company has a solid foundation, including $27.1 billion in annual recurring revenue. The company also generates over $500 million in annual recurring revenue from its AI segment, a figure that has more than doubled year over year.

Adobe continues to post net profit margins in the mid-20s. Its business is gaining market share despite the stock's year-to-date losses. That mismatch suggests Adobe can be a compelling long-term opportunity at current levels. Continued success with its AI products can strengthen the bullish narrative and reward investors who wait for the comeback story.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe, Salesforce, and Workday. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.

A Pfizer logo is shown at a research facility in the La Jolla neighborhood of San Diego, California, U.S., September 30, 2025. REUTERS/Mike Blake/File Photo Purchase Licensing Rights, opens new tab

SummaryCompaniesNo proof of Pfizer's direct conspiracy to fix prices45 U.S. states, others sued over 80 generic drugsStates unavailable to commentJune 24 (Reuters) - Pfizer (PFE.N), opens new tab has been dismissed as a defendant in ​a sweeping antitrust lawsuit in which most U.S. states accused dozens of drugmakers ‌and executives of fixing generic drug prices.

In a decision on Tuesday, Chief Judge Michael Shea of the federal district court in Connecticut said the states failed to show that Pfizer and its former Greenstone unit ​conspired with rivals between 2010 and 2014 to rig bids and allocate customers for ​six drug products.

Jumpstart your morning with the latest legal news delivered straight to your inbox from The Daily Docket newsletter. Sign up here.

These included generic versions of Eplerenone tablets for high blood ⁠pressure, Latanoprost drops for glaucoma, and four versions of Clindamycin phosphate for acne.

The states alleged ​that Greenstone executives exchanged more than 360 phone calls and text messages with the Swiss drugmaker ​Sandoz (SDZ.S), opens new tab to coordinate anticompetitive activity.

But the judge said no reasonable jury could find that New York-based Pfizer directly conspired to fix prices, knew of collusion by Greenstone when asked to approve price changes, or was ​liable because Greenstone — the authorized generic manufacturer of Pfizer-branded drugs — acted as its agent.

"Greenstone existed ​for the purpose of selling generic drugs for profit in addition to the strategic value that it provided ‌to ⁠its parent company," Shea wrote. "The states’ contention that it existed for the sole purpose of acting on its parent company’s behalf falls short."

LAWSUIT COVERS 80 GENERIC DRUGSThe dismissal came in a lawsuit brought by 45 U.S. states, the District of Columbia and four U.S. territories, accusing 36 defendants ​of conspiring to fix ​prices of 80 generic ⁠drugs, primarily for skin ailments.

Connecticut Attorney General William Tong has led the litigation, and New York Attorney General Letitia James filed papers opposing ​Pfizer's dismissal motion.

Tong's office had no immediate comment on Wednesday. James' ​office declined ⁠to comment.

Pfizer spun off Greenstone in a 2020 transaction that created Viatris (VTRS.O), opens new tab.

In a statement, Pfizer said it was pleased with the dismissal. It also said Greenstone was a "reliable and trusted supplier of affordable ⁠generic ​medicines for decades, and we will continue to vigorously defend ​against these claims."

Shea oversees two other antitrust lawsuits by state attorneys general related to generic drugs. Pfizer is a ​defendant in one of those cases.

Reporting by Jonathan Stempel in New York, Editing by Louise Heavens

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

After falling to $255 per share in late March, UnitedHealth Group (UNH 0.69%) stock has been on a heater. The leading health insurer has skyrocketed some 57% since March 30 and is currently trading at $408 per share. It went from being down 22% year to date as of March 30 to being up 24% year to date as of June 22.

The major catalyst for the recent spike is a move by the Centers for Medicare & Medicaid Services (CMS) to raise Medicare Advantage insurers' rates by 2.48% in 2027.

And Jim Cramer, host of CNBC's Mad Money, thinks it has more room to run. He said on his show recently:

Finally, we have UnitedHealth. It's another managed care play that's up for the same reason as Humana. The stock pulled back this afternoon, but the legendary CEO, Steve Hemsley, is back, and he's so good. A brutal stint of bad management before he got there. He's turning it around. UnitedHealth, buy it.

Image source: Getty Images.

Cramer also called UnitedHealth a "textbook safety stock." Is he right?

UNH is still a bargain The Mad Money host is absolutely on the money with this call. UnitedHealth stock is still a bargain, even after its recent surge.

While its valuation has crept up, it is still trading at just 21 times forward earnings. That's because it's still down considerably from the near-$600-per-share price it hit just over a year ago in April 2025, before the tariff crash.

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It may not return to $600 anytime soon, but 77% of Wall Street analysts rate it a buy, with a median price target of $420 per share.

Here are four quick reasons why UnitedHealth stock is a buy:

It smashed earnings estimates last quarter. It raised its 2026 earnings guidance. It's got a high yield and a consistent dividend. As a major healthcare stock, it tends to perform well in market downturns, making it a great defensive play. Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.

Phillips 66 CEO Mark Lashier speaks at the Reuters Global Energy Forum in New York City, U.S., June 24, 2026. Julian Guideras/Handout via REUTERS Purchase Licensing Rights, opens new tab

CompaniesJune 24 (Reuters) - Phillips 66 (PSX.N), opens new tab CEO Mark Lashier said at the Reuters Global Energy Forum ​in New York on Wednesday that ‌refining and petrochemical earnings face greater volatility due to uncertainty from disruptions in the Strait ​of Hormuz.

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

Lashier added that the company ​has taken about $1 per barrel of cost ⁠out of its refining business and ​is targeting $5.50 per barrel, while costs in California ​are around $15 a barrel.

"We actually have improved our yield of high-value products for our refineries, and ​we've enhanced our utilization, running our ​refiners at higher rates as we've lowered the cost," ‌he ⁠added.

Lashier noted that the company's significant investment in integration has paid off, allowing it to capitalize on market opportunities.

The company ​capitalized on ​high prices ⁠in California by moving refined products there when the state ​was dependent on costly Asian-linked supplies ​and ⁠also delivered North American crude to its East Coast refineries, which rely on ⁠the ​Atlantic basin, during a period ​of elevated oil prices.

Reporting by Pooja Menon in Bengaluru ​and Liz Hampton; Editing by Mark Porter

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

Key Takeaways PKX completed a 2.5-million-ton EAF at Gwangyang Steelworks as part of its decarbonization roadmap. POSCO estimates the new EAF can reduce carbon emissions by up to 75% versus blast furnaces. PKX is developing Haptang technology to produce premium low-carbon steel products by 2030. POSCO Holdings Inc. (PKX - Free Report) is accelerating its transition toward low-carbon steelmaking with the completion of South Korea’s largest electric arc furnace (EAF) at its Gwangyang Steelworks. The newly completed facility represents a major milestone in the company’s decarbonization strategy and its long-term goal of achieving carbon neutrality by 2050. 

The new EAF has an annual production capacity of 2.5 million tons of steel and was built with an investment of approximately KRW 600 billion (roughly $397 million). Construction began in February 2024 and took more than two years to complete. The facility will now serve as a cornerstone of POSCO’s low-carbon steel production system. 

Unlike traditional blast furnaces that depend on iron ore and coking coal, EAFs mainly use recycled steel scrap, reducing energy use and emissions. POSCO estimates the Gwangyang EAF can cut carbon emissions by up to 75% versus conventional steelmaking. 

POSCO is going beyond scrap-based steelmaking by developing its proprietary “Haptang” (hot metal mixing) technology, which blends molten iron from blast furnaces with steel produced in electric arc furnaces. The process is designed to maintain the quality standards required for premium steel products while reducing carbon emissions. Through this hybrid approach, PKX aims to mass-produce high-value products, including automotive steel sheets and electrical steel, by 2030. 

The EAF project forms part of POSCO’s broader decarbonization roadmap. The company views electric arc furnace technology as an important intermediate step toward its next-generation HyREX hydrogen-reduction steelmaking process, which is expected to play a central role in its long-term carbon-neutral production system. POSCO ultimately plans to transition from coal-based steelmaking toward hydrogen-based ironmaking and establish a fully decarbonized production structure by 2050. 

Per POSCO, the completion of the Gwangyang EAF represents a key milestone in advancing low-carbon steel production and reflects POSCO’s commitment to a decarbonized manufacturing model. The company noted that the facility will help meet rising global demand for sustainable steel products while enhancing its competitive position in the transition to a low-carbon economy. 

Shares of PKX have gained 8.5% in the past year against the industry’s 2.4% decline. 

Image Source: Zacks Investment Research

PKX Zacks Rank & Other Key PicksPKX currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the Conglomerates space include 3M Company (MMM - Free Report) , Marubeni Corporation (MARUY - Free Report)  and Griffon Corporation (GFF - Free Report) . ITT, MARUY and GFF carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for MMM’s current-year earnings is pegged at $8.71 per share, indicating an 8.1% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average earnings surprise being 4.6%. 

The Zacks Consensus Estimate for MARUY’s current-year earnings is pegged at $23.86 per share, indicating an 8.8% year-over-year decrease. Shares of MARUY have gained 48.7% over the past year. 

The Zacks Consensus Estimate for GFF’s current fiscal-year earnings is pegged at $5.17 per share. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average earnings surprise being 3.3%. 

Key Takeaways AbbVie gets EU approval for Skyrizi in children aged six and older with moderate-to-severe plaque psoriasis.Skyrizi's approval includes a new 55 mg pre-filled syringe for patients weighing under 40 kg.EU clears Maviret in acute HCV, making it the only treatment cleared for acute & chronic HCV in the region. AbbVie (ABBV - Free Report) announced that the European Commission (EC) has approved its blockbuster immunology drug, Skyrizi (risankizumab), for treating children and adolescents aged six years and above with moderate-to-severe plaque psoriasis who are candidates for systemic therapy.

The latest approval in the EU includes a new 55 mg pre-filled syringe designed for patients who weigh less than 40 kg, helping ensure appropriate dosing based on body weight.

The approval was based on data from the phase III OptIMMize-1 pediatric psoriasis program, which included data from two lead-in pharmacokinetic cohorts as well as data from the phase III OptIMMize-2 open-label extension study.

Skyrizi is currently approved for the treatment of adult patients with plaque psoriasis, psoriatic arthritis, Crohn's disease and ulcerative colitis, both in the United States and in Europe.

Skyrizi remains a key growth driver for AbbVie. Sales of the drug soared 29.2% year over year on an operational basis to $4.48 billion in the first quarter of 2026, accounting for nearly 30% of the company’s total revenues. The drug is seeing strong performance across all its approved indications.

ABBV’s Price PerformanceYear to date, shares of AbbVie have risen 4.4% compared with the industry’s growth of 4.5%.

Image Source: Zacks Investment Research

ABBV Wins EU Nod for Maviret in Acute HCVIn a separate press release, AbbVie announced that the European Commission has approved Maviret (glecaprevir/pibrentasvir) for the treatment of acute hepatitis C virus (HCV) infection with compensated liver disease (with or without cirrhosis) in adults and children aged three years and above.

Following the latest nod, Maviret became the only treatment to be approved for both acute and chronic HCV infection in the European Union. The broader indication could simplify treatment decisions and support ongoing efforts to eliminate HCV across the region.

The latest nod was based on data from the phase III study, which demonstrated Maviret to be a highly efficacious treatment for patients with acute HCV infection.

Maviret is approved in the United States under the trade name Mavyret for the treatment of acute and chronic HCV infection in adults and children aged three years and older.

Mavyret sales increased 8.6% on an operational basis year over year to $351 million in the first quarter of 2026.

ABBV’s Zacks Rank & Stocks to ConsiderAbbVie currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Kiniksa Pharmaceuticals (KNSA - Free Report) , Immunocore (IMCR - Free Report) and Liquidia Corporation (LQDA - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, estimates for Kiniksa Pharmaceuticals’ 2026 EPS have increased from $1.09 to $1.24. Over the same period, EPS estimates for 2027 have risen from $1.54 to $1.70. KNSA shares have surged 44.2% year to date.

Kiniksa Pharmaceuticals’ earnings beat estimates in two of the trailing four quarters and missed in the remaining two quarters, with the average surprise being 1.53%.

Over the past 60 days, estimates for Immunocore’s 2026 bottom line have improved from a loss of 88 cents per share to earnings of 6 cents. Over the same period, EPS estimates for 2027 have risen from 24 cents to 87 cents. IMCR stock has lost 15.8% year to date.

Immunocore’s earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with the average surprise being 46.66%.

Over the past 60 days, estimates for Liquidia’s 2026 earnings per share have risen from $1.50 to $2.97, while estimates for 2027 have increased from $2.91 to $4.81 during the same time. LQDA shares have surged 114.7% year to date.

Liquidia’s earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with the average surprise being 54.40%.

The artificial intelligence boom has created winners across the semiconductor industry, but few areas have benefited more recently than memory chips. Every AI server needs vast amounts of high-bandwidth memory (HBM) and DRAM to feed increasingly powerful processors from Nvidia (NASDAQ:NVDA | NVDA Price Prediction), Advanced Micro Devices (NASDAQ:AMD), and others. Without memory, even the fastest AI chip becomes a bottleneck.

That demand has transformed memory manufacturers into some of the market’s biggest winners. In the U.S., no company has benefited more than Micron Technology (NASDAQ:MU). The stock has surged roughly 270% year-to-date and 726% over the past year, even after suffering a 13% pullback during yesterday’s selloff. 

Yet a new development could alter where investors put their next dollar. South Korean memory giant SK hynix plans to begin trading American depositary receipts (ADRs) on the Nasdaq on July 10.

The question isn’t whether Micron remains a strong investment. It does. The real question is whether SK hynix now deserves a larger share of new capital.

The AI Memory Shortage Remains Intact The investment case for memory stocks remains straightforward. AI infrastructure spending continues to accelerate.

The world’s four largest hyperscalers are expected to spend hundreds of billions of dollars on AI infrastructure this year, and memory remains one of the industry’s tightest supply constraints. According to industry market-share data, three companies effectively control the entire HBM market:

Company HBM Market Share SK hynix 57% Samsung Electronics 22% Micron Technology 21% Those numbers tell investors something important. While Micron has become the primary U.S. beneficiary of the AI memory boom, SK hynix remains the industry’s dominant supplier.

The story looks similar in DRAM.

Company DRAM Market Share Samsung Electronics 38% SK hynix 29% Micron Technology 22% Others 11% In both critical memory categories, three companies control nearly the entire market. That’s a powerful position when demand continues to exceed supply.

Micron Is Still Winning Let’s be clear: nothing about SK hynix’s Nasdaq listing weakens Micron’s business. The memory chipmaker remains my favorite stock to own in 2026. The company has successfully moved up the value chain, becoming a major supplier of HBM used in AI accelerators. Revenue, margins, and earnings have all benefited from rising memory prices and persistent shortages.

Perhaps most importantly, Micron remains the only major U.S.-based producer competing at the highest levels of the memory market. That strategic position has become increasingly valuable as governments and customers seek supply-chain diversification.

Granted, Micron’s stock has delivered enormous gains. After a 726% run over the past year, expectations are far higher today than they were 12 months ago. That doesn’t make the stock unattractive, but it does raise the hurdle for future returns.

Why SK hynix Changes the Investment Equation SK hynix’s Nasdaq arrival gives U.S. investors something they haven’t had before: easy access to the memory industry’s market-share leader.

Surprisingly, many American investors have owned Micron simply because it was the most accessible pure-play memory stock available in U.S. markets. Beginning July 10, they’ll be able to buy shares in the company controlling 57% of the HBM market and holding the No. 2 position in DRAM.

That changes the calculus. If investors are looking to deploy fresh capital into the AI memory theme, SK hynix may offer the stronger opportunity because it leads the most important segment of the AI memory market. HBM has become the fuel powering modern AI systems, and SK hynix currently occupies the driver’s seat.

That said, this doesn’t create a sell signal for Micron. Far from it. The memory shortage remains intact, AI spending continues rising, and Micron still controls 21% of the HBM market and 22% of the DRAM market.

Key Takeaway In short, investors don’t need to dump Micron because SK hynix is joining the Nasdaq. Micron remains one of the strongest ways to invest in the AI infrastructure buildout and continues to benefit from robust demand for HBM and DRAM.

However, SK hynix’s July 10 ADR listing introduces a compelling new option, as it holds stronger competitive positions in the two memory categories driving AI growth. For investors putting new money to work after the recent selloff, SK hynix may deserve a larger allocation.

Ultimately, the smartest move may not be choosing one over the other. The AI memory shortage appears likely to persist for years, and owning the companies that dominate the market could prove far more important than trying to pick a single winner.

Micron Technology Inc will release its third-quarter earnings after the markets close on Wednesday. 

Despite fears of an AI bubble, Wall Street predicts positive results. Micron could report $35.5 billion in revenue—a 281% jump year-over-year (YOY), according to a Bloomberg analyst consensus cited by Yahoo Finance. 

Its DRAM (memory) and NAND (storage) revenues are expected to grow 288% and 256% YOY, respectively. 

Micron is also predicted by Bloomberg’s analysts to have earnings per share of $20.39, about a 967% increase YOY. However, consensus estimates cited by CNBC expect EPS to range from $20.17 to $20.42.

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Micron had a successful yearThe earnings report will come just two days after Micron’s shares (Nasdaq: MU) reached a new all-time high of $1,213.56. The stock price is up over 722% YOY and $268 year-to-date (YTD).

Shares of Micron have occasionally dropped alongside those of other chip manufacturers due to fears about over-investment in AI and the infrastructure that powers it.

Just yesterday, shares dropped more than 13% in response to concerns about a stock bubble in South Korea, following a large selloff and losses for both Samsung’s and SK Hynik’s shares. 

Explore Topicschipsmarketssemiconductor chipsstocksTaiwan Semiconductor Manufacturing Company

Ryan Cohen is the CEO of GameStop. GameStop GameStop CEO Ryan Cohen is so determined to buy eBay that he's taken his own $35 billion pay deal off the table.

Cohen has withdrawn the proposed compensation package because he wants to fully focus on revitalizing GameStop's business and acquiring eBay, GameStop said in a press release on Tuesday.

Cohen has reiterated his intention to acquire the online marketplace in recent days, despite the target being more than five times larger than GameStop, with a market value of $48 billion, and eBay rejecting Cohen's cash-and-stock offer in May.

Chewy's billionaire cofounder explained his interest in the tie-up during an episode of the "All-In" podcast released on Tuesday.

He highlighted the opportunity to cut eBay's bloated costs; to make it a big player in live commerce by using GameStop's roughly 1,600 US stores to fulfill orders and serve as studios for content creators; and to expand into digital collectibles by creating a marketplace for digital items in video games.

Cohen also said he'll put $500 million of his own money into the deal to demonstrate his conviction.

"When you look at how much the businesses together make sense, and then you look at the fact that it's within my circle of competence, I can't stop thinking about it," Cohen said.

In a June 19 interview with Piers Morgan, Cohen declined to rule out a hostile takeover, meaning he might attempt to buy the business against the board's wishes.

At Cohen's request, GameStop has removed the proposed CEO Performance Award from its proxy statement, it said in Tuesday's press release.

The video-game retailer's shareholders were poised to vote on the pay package ahead of the company's annual meeting on July 7.

Cohen stood to secure a total of 171.5 million share options if he grew GameStop's market value to $100 billion, and its adjusted profits to $10 billion. Those shares would be worth in excess of $35 billion

He's faced backlash over his proposed pay package. Michael Burry of "The Big Short" fame revealed in early May that he'd sold his GameStop stake because he was skeptical of the eBay deal, and suggested Cohen was pursuing the heavily dilutive transaction because it would help him hit his market cap and profit milestones, generating a huge payout for him.

GameStop noted in a filing that Cohen wouldn't have received a windfall purely for acquiring eBay, as his performance hurdles stood to be adjusted to reflect a stock-based acquisition.

In its press release, GameStop said it would provide fresh details about its plans to purchase eBay this week, including its strategic rationale and how it plans to run the combined company.

GameStop and eBay did not immediately respond to requests for comment.

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Theron Mohamed You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.

Theron Mohamed is a London-based correspondent on the Trending team at Business Insider. His coverage spans finance, investing, wealth, markets, and the economy.Theron joined BI in 2019 as a reporter at Markets Insider and rose to the rank of correspondent before moving to the Trending team in 2024. He previously covered tech, media, and telecom stocks for Investors Chronicle magazine and had a brief stint on the Financial Times' Data team. He interned at the Wall Street Journal in New York where he primarily wrote for Heard on the Street.Theron has freelanced for The Independent, The Telegraph, WIRED, and several smaller publications. He holds an undergraduate degree in geography from the London School of Economics, and a master's degree in journalism from Columbia University.Theron often covers Warren Buffett, Michael Burry, Jeremy Grantham and other top-flight investors. He also writes about the world's wealthiest people and shares financial advice from all manner of rich and successful people.Email Theron at [email protected] and follow him on X @theron_mohamed.Expertise

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A scientist looks at hypometabolic and hypoperfusion patterns at the single-subject level from a patient suffering from Alzheimer's disease at the Memory Centre at the Department of... Purchase Licensing Rights, opens new tab Read more

CompaniesJune 24 (Reuters) - ALZpath said on Wednesday it had signed a global licensing agreement with Abbott Laboratories (ABT.N), opens new tab to help advance blood-based ​testing for Alzheimer's disease, as companies race to offer ‌easier-to-use diagnostic options for the brain-wasting disease.

Here are some more details:

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Abbott will incorporate ALZpath's antibody into a test designed to run on its Alinity ​laboratory systems.

Blood tests offer an alternative to diagnosing Alzheimer's, ​which has been traditionally diagnosed through expensive and invasive ⁠PET imaging and cerebrospinal fluid analysis.

The California-based company has previously ​partnered with Roche, Beckman Coulter and Siemens Healthineers.

ALZpath CEO Mike Banville ​told Reuters exclusively that the company has opted to partner with firms through licensing agreements, as this approach enables it to reach patients more ​quickly with its blood-based test.

"With Abbott on board... we will ​now have 80% of the in-vitro diagnostic market, roughly, using the ALZpath antibody," ‌Banville ⁠added.

The test targets pTau217, a blood marker linked to changes seen in Alzheimer's disease.

ALZpath scientific adviser Henrik Zetterberg said that pTau217 is a "bit of a revolution in detecting Alzheimer's disease early." ​The marker can ​reveal changes years ⁠before dementia sets in, and help assess patients with memory symptoms.

Regulatory progress is expected in the ​coming months, with U.S. approvals for some partners ​anticipated ⁠in the back half of the year, Banville said.

Blood tests, including one developed by Japan-based Fujirebio, have already received U.S. regulatory clearance, opens new tab for ⁠Alzheimer's ​diagnosis.

ALZpath did not disclose the financial terms ​of the deal with Abbott, but Banville said the partnership follows a royalty-based ​licensing model.

Reporting by Sahil Pandey in Bengaluru; Editing by Shinjini Ganguli

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Built from the ground up for current and future LLMs across the industry

Developed from design to production in nine months, accelerated by OpenAI’s models

Will deliver performance per watt better than current state-of-the-art, based on early testing

Expands OpenAI’s full-stack platform, from products to models and now to chips

To be deployed at gigawatt scale with data center partners, over multiple generations

SAN FRANCISCO and PALO ALTO, Calif., June 24, 2026 (GLOBE NEWSWIRE) -- OpenAI and Broadcom (NASDAQ: AVGO) today unveiled Jalapeño, OpenAI’s first Intelligence Processor: an accelerator architected around OpenAI’s vision for the future of LLM inference, and the first AI accelerator in a multi-generation compute platform the companies are building together to make advanced AI faster, more reliable, and more accessible to more people.

Jalapeño was delivered to OpenAI CEO Sam Altman and President Greg Brockman by Broadcom President and CEO Hock Tan and Semiconductor Solutions President Charlie Kawwas, marking an important step in OpenAI’s strategy to build the full stack behind its models and products.

OpenAI designed the chip from scratch around its deep understanding of LLM fundamentals, informed by its roadmap of models, kernels, serving systems, and product needs, with partners Broadcom and Celestica, helping industrialize the platform through chip implementation, board, rack system integration, high-performance networking, and scalable production systems. Jalapeño is designed with flexibility to work with all LLMs guided by OpenAI's insights into the inference needs of current and future AI models across the industry. Engineering samples of the Jalapeño chip are running ML workloads in the lab at production target frequency and power, including GPT-5.3-Codex-Spark.

While OpenAI is still measuring final performance, early testing shows that Jalapeño will deliver performance per watt substantially better than current state-of-the-art. A detailed technical report on performance will be presented in the coming months. The architecture reduces data movement and balances compute, memory, and networking resources to achieve realized utilization much closer to theoretical peak performance. Broadcom’s silicon implementation and networking technologies, including Tomahawk networking silicon, help bring the platform to large-scale production.

“The world is moving to a compute-powered economy,” said Greg Brockman, President and Co-Founder, OpenAI. “Jalapeño is part of our long-term full-stack infrastructure strategy to make compute more abundant, resulting in AI which is faster, more reliable, more affordable for people and businesses, and can be used to solve more important problems. By designing more of the stack ourselves, we can serve more intelligence with greater efficiency and keep pushing advanced AI toward broader access.”

“Jalapeño was designed from the ground up for LLM inference using detailed insights from our close collaboration with OpenAI researchers,” said Richard Ho, who leads OpenAI’s hardware program. “We optimized the architecture around the kernels, memory movement, networking, and serving patterns that matter most for frontier AI models. Based on early testing, Jalapeño will efficiently execute our most important workloads close to the hardware’s theoretical limits.”

“Our collaboration with OpenAI represents a fundamental commitment to scaling the physical infrastructure required for the next decade of AI,” said Hock Tan, President and CEO, Broadcom. “This is just the beginning of a multi-generation roadmap. By co-developing our industry-leading silicon directly with OpenAI, we are enabling the deployment of gigawatt scale data centers with Microsoft and other partners beginning in 2026.”

Designed to be the best inference platform for LLMs

Jalapeño is a blank-slate design for modern LLM inference, not a general-purpose accelerator adapted from earlier AI workloads. It is informed by the systems OpenAI runs every day across ChatGPT, Codex, the API, and future agentic products, while also being designed for current and future LLMs across the industry. The goal is to combine the power and throughput of today’s leading AI accelerators with latency closer to the fastest specialized inference systems, making Jalapeño well suited for interactive LLM products at scale.

Nine-month tape-out, accelerated by OpenAI models

Jalapeño was co-developed from initial design to manufacturing tape-out in just nine months, and the custom AI accelerator program represents what may be the fastest ASIC development cycle ever achieved in high-performance advanced semiconductors. That speed reflects deep software-hardware co-development with OpenAI’s engineering teams, Broadcom’s silicon implementation expertise, and the use of OpenAI models to accelerate parts of the design and optimization process.

The same models served to users are helping improve the infrastructure used to run future models. If AI can help engineers design better chips faster, it can lower the cost of compute across the industry and help democratize access to advanced AI.

Building a multi-generation platform with partners

Jalapeño is the first step in a multi-generation compute platform designed for initial deployment by the end of 2026, and expanding in the years ahead, combining OpenAI-designed accelerators with Broadcom silicon implementation, networking, and connectivity technologies; and Celestica’s board, rack and system expertise.

Additional Resource

Read the OpenAI blog post

About OpenAI

OpenAI is an AI research and deployment company. Our mission is to ensure that artificial general intelligence benefits all of humanity.

About Broadcom

Broadcom Inc. (NASDAQ: AVGO) is a technology leader that designs, develops, and supplies semiconductors and infrastructure software for global organizations' complex, mission-critical needs. Broadcom combines long-term R&D investment with superb execution to deliver the best technology, at scale. Broadcom is a Delaware corporation headquartered in Palo Alto, CA. For more information, visit www.broadcom.com.

Press Contacts

OpenAI: [email protected]

Broadcom: [email protected]

Cautionary Note Regarding Forward-Looking Statements

This announcement contains forward-looking statements (including within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended) concerning Broadcom. These statements include, but are not limited to, statements regarding Broadcom’s collaboration with OpenAI in delivering Jalapeño to OpenAI and Broadcom helping bring OpenAI’s full-stack platform to large-scale production to enable the deployment of gigawatt scale datacenters. These forward-looking statements are based on current expectations and beliefs of Broadcom’s management, current information available to Broadcom’s management, and current market trends and market conditions, and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Accordingly, undue reliance should not be placed on such statements.

Particular uncertainties that could materially affect future results include risks associated with: global political and economic conditions and uncertainty; government regulations, trade restrictions and trade tensions; fluctuations in the timing and volume of significant customer demand; ability to make successful investments in research and development and successfully expand Broadcom’s business strategy or adopt Broadcom’s business models; ability to continue winning business and the timing of such wins; dependence on contract manufacturing and outsourced supply chain; dependency on a limited number of suppliers; dependence on senior management and the ability to attract and retain qualified personnel; ability to protect against cybersecurity threats and a breach of security systems;
ability to accurately estimate customers’ demand and adjust the manufacturing and supply chain accordingly; ability to improve manufacturing capacity and quality; involvement in legal proceedings; quarterly and annual fluctuations in operating results; Broadcom’s competitive performance; ability to maintain or improve gross margin; ability to protect Broadcom’s intellectual property and the unpredictability of any associated litigation expenses; significant indebtedness and the need to generate sufficient cash flows to service and repay such debt; and other events and trends on a national, regional, industry-specific and global scale, including those of a political, economic, business, competitive and
regulatory nature.

Broadcom’s filings with the Securities and Exchange Commission (SEC) are available without charge at the SEC’s website at https://www.sec.gov and include some important risk factors that may affect future results. Broadcom undertakes no intent or obligation to publicly update or revise the forward-looking statements made in this announcement, except as required by law.