Momentum investing is essentially the opposite of the tried-and-tested Wall Street adage -- "buy low and sell high." Investors following this investing style typically avoid betting on cheap stocks and waiting long for them to recover. They believe instead that one could make far more money in lesser time by "buying high and selling higher."Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth po ...

Market Overview - U.S. stock markets experienced a successful June, with the Dow, S&P 500, and Nasdaq Composite increasing by 4%, 5.7%, and 5.7% respectively, closing at record-high levels for the first half of 2025 [1] - Despite this success, the first half of 2025 marked the weakest performance for the indexes since 2022, with potential catalysts for the second half including a U.S.-China trade deal, anticipated interest rate cuts by the Fed, and reduced recession fears [2] Imaginary Portfolio - An imaginary diversified portfolio was created, consisting of five stocks that each gained over 50% in the first half of 2025, with further upside potential indicated by favorable Zacks Ranks [3][4] Company Highlights Jabil Inc. (JBL) - Jabil is benefiting from strong momentum in capital equipment, AI-powered data center infrastructure, and digital commerce, with a focus on product diversification [7] - Expected revenue and earnings growth rates for Jabil are 5.9% and 18.5% respectively for the next year, with a 9% improvement in the Zacks Consensus Estimate for next-year earnings over the last 30 days [9] Howmet Aerospace Inc. (HWM) - Howmet Aerospace is experiencing growth in the commercial aerospace market, supported by robust build rates and recovery in wide-body aircraft, along with strength in its defense aerospace business [10] - Expected revenue and earnings growth rates for Howmet are 8.5% and 29% respectively for the current year, with a 0.3% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [11] CVS Health Corp. (CVS) - CVS Health is investing in technology to reduce costs and enhance customer experience, with improved Medicare Advantage star ratings aiding its position [12] - Expected revenue and earnings growth rates for CVS are 3.5% and 12.6% respectively for the current year, with a 2.3% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [14] Carvana Co. (CVNA) - Carvana's acquisition of ADESA's U.S. operations has strengthened its logistics and auction capabilities, with expectations for year-over-year growth in retail unit sales [15][16] - Expected revenue and earnings growth rates for Carvana are 32.1% and over 100% respectively for the current year, with a 7.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [17] NRG Energy Inc. (NRG) - NRG Energy operates in the energy and home services sector, producing electricity from various sources and expanding operations through both organic and inorganic initiatives [18][19] - Expected revenue and earnings growth rates for NRG are 2.6% and 17% respectively for the current year, with a 2.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [20]

Core Insights - The stock market has experienced volatility in the first half of 2025, but several companies have shown impressive returns driven by AI momentum, energy sector strength, and bold corporate strategies [1] Company Performance - Palantir Technologies (PLTR) has achieved an 80.07% year-to-date return, significantly outperforming the broader market, driven by its growing role in AI and expanding government business [2][3] - NRG Energy (NRG) follows closely with a 77.99% gain, supported by strong Q1 earnings and the acquisition of natural gas power plants, which increased its generation capacity [6] - Howmet Aerospace (HWM) reported a 71.90% return, benefiting from the global rebound in air travel and rising demand for aircraft components [8] - Seagate Technology (STX) surged 66.20%, capitalizing on the growing need for data storage solutions for AI infrastructure [8] - Supermicro (SMCI) jumped 60.92%, driven by its role in building AI-optimized servers [8] - GE Vernova (GEV) climbed 60.87% amid increasing investor interest in renewables and grid modernization [10] - Newmont (NEM) gained 56.52%, driven by rising gold prices due to inflation concerns and a weaker dollar [10] - Uber (UBER) rose 54.71%, benefiting from strong performance in its mobility and delivery businesses [10] - GE Aerospace (GE) advanced 54.54% on strong demand in commercial and defense aviation [10] - CVS Health (CVS) increased by 53.00%, supported by restructuring efforts and a push into healthcare services [11] - Jabil (JBL) rose 51.47%, backed by steady demand in consumer electronics and automotive markets [11]

Market Overview - The U.S. stock market experienced a rally in 2023 and 2024, continuing into the first half of 2025, primarily driven by the technology sector and the adoption of generative AI technology [2][4] - The AI-driven rally faced setbacks in early 2025 due to the introduction of the low-cost Chinese DeepSeek AI platform, U.S. export restrictions on high-end AI processors to China, and geopolitical tensions [3][4] AI Infrastructure Investment - The AI infrastructure sector is gaining momentum, with fears related to DeepSeek being overblown [4] - Four major companies are projected to invest $325 billion in AI infrastructure in 2025, marking a 46% year-over-year increase in capital expenditure [7][9] - The total addressable global sovereign AI market is estimated to reach $1.5 trillion [8] Recommended AI Stocks - Five AI stocks are recommended for investment in the second half of the year, all showing strong performance and a Zacks Rank 1 (Strong Buy): Jabil Inc. (JBL), Twilio Inc. (TWLO), UiPath Inc. (PATH), Intuit Inc. (INTU), and Dell Technologies Inc. (DELL) [5][9] Company Insights Jabil Inc. (JBL) - Jabil is benefiting from growth in capital equipment and AI-powered data center infrastructure, with a focus on product diversification [10] - The company has an expected revenue growth rate of 5.9% and earnings growth rate of 18.5% for the next year [12] Twilio Inc. (TWLO) - Twilio is enhancing its cloud communications platform with generative AI, launching Customer AI technology to improve customer engagement [13][15] - The expected revenue growth rate for Twilio is 7.9% and earnings growth rate is 22.3% for the current year [18] UiPath Inc. (PATH) - UiPath offers a comprehensive automation platform with embedded AI capabilities, introducing new generative AI features to enhance automation [19][20] - The expected revenue growth rate for UiPath is 8.5% and earnings growth rate is 5.7% for the current year [21] Intuit Inc. (INTU) - Intuit is experiencing steady revenue growth from its Online Ecosystem and is integrating generative AI into its products to enhance customer insights [22][23] - The expected revenue growth rate for Intuit is 11.7% and earnings growth rate is 13.7% for the next year [25] Dell Technologies Inc. (DELL) - Dell is seeing strong demand for AI servers, securing $12.1 billion in AI server orders, and expanding its cloud services [26][28] - The expected revenue growth rate for Dell is 8.7% and earnings growth rate is 16% for the current year [29]

Financial Performance - Net revenue for the three months ended May 31, 2025, was $7,828 million, a 15.7% increase from $6,765 million for the same period in 2024[117] - Gross profit for the three months ended May 31, 2025, was $681 million, representing 8.7% of net revenue, down from 9.0% in the same period in 2024[128] - Net income attributable to Jabil Inc. for the three months ended May 31, 2025, was $222 million, compared to $129 million for the same period in 2024[117] - Operating income for the three months ended May 31, 2025, was $403 million, up from $261 million in the same period last year, representing a 54% increase[152] - Core operating income (Non-GAAP) for the nine months ended May 31, 2025, was $1,101 million, compared to $1,187 million for the same period in 2024, reflecting a decrease of 7.2%[152] - Adjusted free cash flow (Non-GAAP) for the nine months ended May 31, 2025, was $813 million, an increase from $636 million in the prior year, marking a 27.8% growth[153] Segment Performance - Intelligent Infrastructure segment net revenue increased by 51%, driven by a 40% increase in cloud and data center infrastructure revenues and a 13% increase in capital equipment revenues[125] - The Connected Living and Digital Commerce segment net revenue decreased by 7% due to a 7% decrease in revenues from existing customers[125] - The Regulated Industries segment accounted for 39% of net revenue for the three months ended May 31, 2025, down from 45% in the same period in 2024[127] Expenses and Charges - Selling, general and administrative expenses for the three months ended May 31, 2025, increased to $274 million from $268 million in the same period in 2024[129] - Research and development expenses for the three months ended May 31, 2025, were $7 million, consistent with 0.1% of net revenue, compared to $9 million for the same period in 2024[131] - Amortization of intangibles increased to $17 million for the three months ended May 31, 2025, from $12 million in the same period of 2024, primarily due to acquisitions[132] - Restructuring, severance, and related charges decreased to $16 million for the three months ended May 31, 2025, from $55 million in the same period in 2024[134] - Other expense increased to $30 million for the three months ended May 31, 2025, compared to $22 million in the same period of 2024[144] Cash Flow and Capital Expenditures - Net cash provided by operating activities for the nine months ended May 31, 2025, was $1,052 million, compared to $1,181 million for the same period in 2024[178] - Net cash used in investing activities during the nine months ended May 31, 2025, was $(578) million, primarily due to acquisitions and capital expenditures[180] - The company anticipates net capital expenditures for Fiscal Year 2025 to be in the range of 1.5% to 2.0% of net revenue[182] Acquisitions and Divestitures - The acquisition of Pharmaceutics International, Inc. was completed for a cash consideration of $309 million, enhancing the company's service offerings in regulated industries[155] - The company signed a binding share purchase agreement for the acquisition of Rebound Technologies Group Holdings Limited, a global supply chain service provider, on June 2, 2025[154] - The divestiture of the Mobility Business resulted in a pre-tax gain of $942 million for the fiscal year ended August 31, 2024[163] - The company incurred transaction and disposal costs of approximately $67 million related to the sale of the Mobility Business during the fiscal year ended August 31, 2024[163] Debt and Financing - Total notes payable as of May 31, 2025, amounted to $2,884 million, reflecting a slight increase from $2,880 million as of August 31, 2024[167] - As of May 31, 2025, the company had $4.0 billion in available unused borrowing capacity under existing revolving credit facilities, with $3.2 billion available under the Existing Credit Facility[168] - The company entered into a new senior unsecured credit agreement on June 18, 2025, providing a five-year revolving credit facility of $3.2 billion, potentially increaseable by up to $1.0 billion[169] Share Repurchase and Warrants - The company repurchased 6.5 million shares for $975 million under the 2025 Share Repurchase Program as of May 31, 2025[184] - The company repurchased a total of 2,221,905 shares of common stock during the three months ended May 31, 2025, at an average price of $137.87 per share[196] - The Board of Directors authorized a share repurchase program of up to $1.0 billion in September 2024[196] - The company issued a warrant to Amazon.com NV Investment Holdings LLC for up to 1,158,539 ordinary shares at an initial exercise price of $137.77 per share, with 59,582 shares vested upon issuance[186] - As of May 31, 2025, there are 1,098,957 outstanding warrant shares, with 59,582 exercisable[189] Tax and Other Financial Metrics - Effective income tax rate for the three months ended May 31, 2025, was 23.7%, a decrease of 12.0% from 35.7% in the same period of 2024[148] - Interest expense, net decreased to $112 million for the nine months ended May 31, 2025, from $132 million in the same period of 2024, due to lower interest rates[146] - Loss on securities amounted to $46 million during the three months ended May 31, 2025, related to an impairment of an investment in Preferred Stock[143] Risk Management and Internal Controls - There were no material changes in the company's primary risk exposures or management of market risks since the last annual report[191] - The company did not identify any modifications to its internal control over financial reporting that materially affected its financial reporting for the fiscal quarter ended May 31, 2025[193] - The company’s disclosure controls and procedures were evaluated and deemed effective as of May 31, 2025[192] - The company has no material changes to its contractual obligations and commitments since August 31, 2024[190] - There were no defaults upon senior securities reported during the period[197]

Core Viewpoint - Jabil is experiencing significant growth driven by the rapid adoption of artificial intelligence (AI) technology, particularly in the data center sector [1][2][3]. Financial Performance - Jabil's fiscal 2025 third-quarter revenue increased by 16% year-over-year, while earnings rose by 35% [5]. - The company has raised its full-year revenue forecast to $29 billion from $27.9 billion [5]. - Fiscal 2025 earnings per share are now expected to be $9.33, up from the previous estimate of $8.95 [6]. AI Demand and Investment - Jabil's AI revenue is projected to grow by 50% this year, reaching $8.5 billion, which will account for nearly 30% of the company's total revenue in fiscal 2025 [7]. - The company plans to invest $500 million to enhance its cloud and AI data center infrastructure manufacturing services [7][8]. - This investment aims to improve the design and manufacturing of complex AI server racks to meet increasing power and cooling requirements [8]. Market Outlook - The AI server market is expected to grow at an annual rate of 34% through 2030, indicating a strong future demand for Jabil's offerings [9]. - Jabil's annual capital expenditures are not expected to increase due to the planned $500 million investment, which should enhance profitability [9]. Stock Performance and Valuation - Jabil's stock has gained 45% in 2025, outperforming the Nasdaq Composite index, which increased by only 1% [11]. - The stock has a forward price-to-earnings ratio of less than 20, which is lower than the Nasdaq-100 index's average of 29 [11]. - Future earnings growth could lead to a higher valuation, with projections suggesting a potential stock price of $314, representing a 50% increase from current levels [12][13].

Market Overview - Wall Street is optimistic about reduced tensions in the Middle East, particularly following a cease-fire agreement between Israel and Iran announced by President Trump, which is expected to foster peace [1] - The Nasdaq index increased by 1.5% on Tuesday morning, continuing a strong performance from Monday, while oil prices have been declining [1] - Investors are focusing on avoiding major conflicts, which allows them to concentrate on cooling inflation, trade agreements, and the potential for robust second-quarter earnings [1][2] Investment Strategy - The market is approaching all-time highs as it enters July and the Q2 earnings season, with bullish sentiment prevailing despite potential short-term volatility [2] - Investors are encouraged to utilize a Zacks screen to identify top-performing Zacks Rank 1 (Strong Buy) stocks to enhance their portfolios [2][3] Zacks Rank 1 Stocks - Zacks Rank 1 stocks have historically outperformed the market, averaging an annual return of approximately 24.4% since 1988 [5] - There are over 200 stocks that hold a Zacks Rank 1 at any time, necessitating the use of filters to narrow down the list to more manageable options [3] Jabil Inc. (JBL) Highlights - Jabil Inc. is identified as a strong long-term buy, particularly due to its recent strong Q3 FY25 earnings report, which exceeded estimates by 10% and led to an upward revision of guidance [9][10] - The company plans to invest around $500 million to enhance its manufacturing capabilities in the Southeast, supporting cloud and AI data center infrastructure [9] - Jabil's Intelligent Infrastructure segment is a key growth driver, benefiting from increasing demand driven by AI [9][10] Financial Performance - Jabil is projected to grow adjusted earnings by 10% in FY25 and 19% in FY26, with revenue expected to increase by 1% in FY25 and 6% in FY26 [10] - The stock has appreciated 860% over the past decade, significantly outperforming the tech sector, and has seen an 85% increase in the last 12 months compared to the tech sector's 8% [11] - Despite its strong performance, Jabil trades at a 15% discount to the tech sector, with a forward P/E ratio of 22.4X [11]

Group 1: Jabil (JBL) - Jabil is one of the largest global suppliers of electronic manufacturing services with a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for Jabil's current year earnings increased by 2.1% over the last 60 days [1] - Jabil's shares gained 39% over the last three months compared to the S&P 500's gain of 4.6%, and it has a Momentum Score of A [1] Group 2: Wheaton Precious Metals (WPM) - Wheaton Precious Metals is one of the largest precious metal streaming companies globally, also holding a Zacks Rank 1 [2] - The Zacks Consensus Estimate for Wheaton's current year earnings increased by 5.5% over the last 60 days [2] - Wheaton's shares gained 20.9% over the last three months compared to the S&P 500's gain of 4.6%, and it has a Momentum Score of A [2] Group 3: Triple Flag Precious Metals Corp. (TFPM) - Triple Flag Precious Metals is a gold-focused streaming and royalty company with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for Triple Flag's current year earnings increased by 4% over the last 60 days [3] - Triple Flag's shares gained 29.7% over the last three months compared to the S&P 500's gain of 4.6%, and it has a Momentum Score of A [3]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps identify stocks with strong momentum characteristics, with Jabil (JBL) currently holding a Momentum Style Score of A [2][3] Group 2: Jabil's Performance Metrics - Jabil's shares have increased by 17.27% over the past week, significantly outperforming the Zacks Electronics - Manufacturing Services industry, which rose by 4.08% during the same period [5] - Over the past quarter, Jabil's shares have surged by 51.63%, and over the last year, they have gained 82.17%, while the S&P 500 only increased by 5.61% and 10.35%, respectively [6] - The average 20-day trading volume for Jabil is 1,570,197 shares, indicating a bullish trend as the stock is rising with above-average volume [7] Group 3: Earnings Outlook - In the past two months, two earnings estimates for Jabil have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $8.93 to $9.12 [9] - For the next fiscal year, two estimates have also moved upwards, with no downward revisions, indicating positive earnings momentum [9] Group 4: Conclusion - Jabil is rated as a 2 (Buy) stock with a Momentum Score of A, making it a strong candidate for investors looking for potential short-term gains [10]

Core Insights - Jabil Inc. (JBL) demonstrated year-over-year improvements in most of its financial metrics, indicating positive short-term performance [1] - However, the company underperformed over a longer nine-month period and in the latest trailing results, suggesting potential challenges in sustaining growth [1] Financial Performance - The latest financial results showed improvements in both top and bottom lines year-over-year [1] - Despite the positive short-term results, the longer-term performance over nine months indicates a decline or stagnation [1]