Industry Overview - The artificial intelligence (AI) infrastructure sector is experiencing significant growth, with a bullish demand scenario and a projected capital expenditure increase of 46% year-over-year, reaching $325 billion by 2025 [3][4]. - The total addressable global sovereign AI market is estimated to be $1.5 trillion, indicating vast opportunities for investment and development in various fields such as healthcare, energy, and cybersecurity [4]. Company Highlights Credo Technology Group Holding Ltd. (CRDO) - Credo Technology is focused on high-performance serial connectivity solutions, particularly in AI server markets, with its Active Electrical Cables (AEC) gaining traction due to their reliability [9][10]. - The company has achieved significant milestones, including an 800-gig transceiver DSP design win and the introduction of ultra-low-power optical DSPs, which are expected to enhance industry standards [11][14]. - CRDO anticipates a revenue growth rate of 85.8% and earnings growth of over 100% for the current fiscal year, with a 37% improvement in earnings estimates over the last 60 days [14]. Jabil Inc. (JBL) - Jabil is benefiting from strong momentum in AI-powered data center infrastructure and has a diversified product portfolio that enhances its resilience against macroeconomic disruptions [15][16]. - The company has a projected revenue growth rate of 5.6% and earnings growth of 17.8% for the next fiscal year, with an 8.4% increase in earnings estimates over the past 30 days [17]. Lumentum Holdings Inc. (LITE) - Lumentum designs and manufactures optical technologies that support AI applications, with a focus on high-speed telecommunications and data centers [18][20]. - The company has a strong collaboration with NVIDIA in developing photonic solutions, which are crucial for AI infrastructure [21]. - LITE expects a revenue growth rate of 32.8% and earnings growth of over 100% for the current fiscal year, with a slight improvement in earnings estimates recently [21].

Core Industry Insights - The electronics manufacturing services (EMS) industry is highly competitive and rapidly evolving, driven by factors such as AI, data center expansion, consumer electronics growth, 5G adoption, IoT proliferation, and automotive innovation [4] - Both Celestica Inc. and Jabil Inc. are strategically positioned in this evolving EMS landscape, with domain-specific expertise in core areas [4] Jabil Inc. Highlights - Jabil is experiencing significant growth in AI-related revenues, projected to reach $8.5 billion by 2025, reflecting a 50% year-over-year growth [5] - The AI data center market is expected to grow from $15.02 billion in 2024 to $93.60 billion in 2032, with a compound annual growth rate of 26.8% [6] - Jabil plans to invest $500 million in the Southeast U.S. to expand manufacturing capabilities and workforce development for the cloud and AI data center infrastructure market [6] - The company generated $326 million in adjusted free cash flow in Q3 and anticipates over $1.2 billion in adjusted free cash flow for the full year 2025, indicating efficient working capital management [7] - Jabil faces challenges from weak demand in renewable energy and EV verticals, as well as competition from Celestica and others [8] Celestica Inc. Highlights - Celestica is witnessing growth in its Connectivity & Cloud Solutions (CCS) segment, driven by strong demand for 400G and 800G switches [9][10] - The company is focusing on product diversification and innovation, with strategic collaborations with industry leaders like AMD and Broadcom expected to yield long-term benefits [10] - Celestica's strong R&D capabilities allow it to produce high-volume electronic products and complex technology infrastructure products [11] - The introduction of innovative products, such as the ES1500 enterprise access switch, positions Celestica for long-term growth [12] - However, the company faces margin pressures due to intensifying competition and significant customer concentration risk [13] Financial Performance and Valuation - Jabil's 2025 sales are estimated to grow by 0.58%, with EPS growth of 10.13%, while Celestica's sales and EPS are expected to grow by 13.15% and 30.15%, respectively [14][16] - Over the past year, Celestica's stock has gained 152.6%, while Jabil's has increased by 85.2% [17] - Jabil's shares trade at a forward P/E ratio of 20.42, which is lower than Celestica's 28.98, making Jabil more attractive from a valuation standpoint [17] Investment Outlook - Jabil holds a Zacks Rank 1 (Strong Buy), while Celestica has a Zacks Rank 3 (Hold), indicating a stronger investment outlook for Jabil [19][21] - Both companies are expected to benefit from the growing AI proliferation across industries, but Jabil's broader portfolio, robust cash flow, and strategic investments provide it with a competitive edge [21]

Core Insights - Endeavour Energy LLC and Jabil Inc. have expanded their collaboration to deliver modular, just-in-time (JIT) AI-ready infrastructure, aiming to enhance scalability and efficiency in data center operations [1][5] - The new JIT model is designed to eliminate capacity bottlenecks, reduce the risk of overbuild, and significantly lower total capital expenditure, with potential upfront investment reductions of up to 90% [2][4] Company Collaboration - The partnership combines Endeavour's advanced data center technologies with Jabil's manufacturing and supply chain solutions, enabling a dynamic, demand-responsive delivery of infrastructure tailored for AI [3][6] - This collaboration is expected to provide up to 2 gigawatts per year of elastic AI infrastructure capacity, aligning infrastructure delivery with real-time demand [4][7] Strategic Initiative - The initiative represents a shift from traditional large capital investments to a more precise, incremental, and demand-driven approach, improving capital efficiency and reducing risk for customers [5][6] - Jabil's recent $500 million commitment to domestic cloud and AI infrastructure manufacturing is expected to be operational by mid-2026, further supporting this strategic initiative [5] Industry Impact - The new just-in-time platform is set to launch in the United States in Q1 2027, with over a dozen Edged data centers already operational or under construction across North America and Europe [7] - The initiative aims to address both technological and business challenges in the AI era, ensuring that critical infrastructure accelerates innovation rather than constraining it [6]

Core Insights - Wall Street continues its upward trend, primarily driven by the technology sector's adoption of generative AI, despite some challenges in early 2025 [2] - Three technology companies have seen significant earnings estimate revisions, indicating positive market expectations [3] Company Summaries Dell Technologies Inc. (DELL) - DELL has experienced strong demand for AI servers, securing $12.1 billion in AI server orders, which has created a robust backlog [5][9] - The company is expanding its cloud services and AI infrastructure through its APEX platform, which offers multi-cloud solutions [7] - DELL's expected revenue and earnings growth rates for the current year are 8.7% and 16%, respectively, with a recent 0.1% improvement in earnings estimates [8] Jabil Inc. (JBL) - JBL benefits from momentum in capital equipment and AI-powered data center infrastructure, with an 8.4% increase in next-year EPS estimates [9][12] - The company maintains high free cash flow, indicating efficient financial management and operational efficiency [11] - Expected revenue and earnings growth rates for JBL are 5.8% and 17.8%, respectively, for the next fiscal year [12] Credo Technology Group Holding Ltd. (CRDO) - CRDO specializes in high-performance serial connectivity solutions, with its Active Electrical Cables (AEC) gaining traction in the data center market [14] - The company has seen a 37% increase in earnings estimates over the last 60 days, with expected revenue and earnings growth rates of 85.8% and over 100% for the current year [19] - CRDO's product lines, including PCIe retimers and Ethernet retimers, are experiencing robust demand, particularly in AI server applications [17][18]

Core Insights - The drone technology sector is experiencing significant growth, with advancements making drones essential across various industries [1] Company Summaries Jabil Inc. (JBL) - Jabil holds a Zacks Rank 1 and has seen substantial benefits from strong momentum in capital equipment, AI-powered data center infrastructure, cloud, and digital commerce [5] - The company emphasizes product diversification, aiming for no single product or family to exceed 5% of operating income or cash flows in any fiscal year [5] - Jabil's expected revenue and earnings growth rates for the next year are 5.8% and 17.8%, respectively, with a recent 8.4% improvement in the Zacks Consensus Estimate for next-year earnings [7] HEICO Corp. (HEI) - HEICO also holds a Zacks Rank 1, benefiting from increased orders for aftermarket replacement parts and repair services due to rising air travel [8] - The company anticipates strong order flows for its defense products, supported by a projected 13% increase in the U.S. defense budget to $1.01 trillion for fiscal 2026 [9] - HEICO's expected revenue and earnings growth rates for the current year are 13.2% and 23.7%, respectively, with a slight 0.2% improvement in the Zacks Consensus Estimate for current-year earnings [10] L3Harris Technologies Inc. (LHX) - L3Harris has a Zacks Rank 2 and benefits from solid U.S. budget funding, which is expected to enhance its revenues [11] - The company is experiencing strong demand for its defensive solutions from various regions, including Asia-Pacific and Latin America, and is involved in the U.S. administration's Golden Dome initiative [11] - L3Harris's expected revenue and earnings growth rates for the current year are 1% and -20%, respectively, with a 0.1% improvement in the Zacks Consensus Estimate for current-year earnings [12]

Market Overview - The S&P 500 rose by 5% in June, driven by optimism regarding trade deals, a ceasefire in the Middle East, and potential interest rate cuts in 2025 [1] - Positive economic indicators, including strong manufacturing data, increased factory orders, and a favorable jobs report for June, alleviated recession fears [1] July Market Conditions - As July begins, the job market remains robust, inflation is cooling, and companies are set to announce earnings [2] - Trade disagreements may cause short-term market fluctuations, but new trade agreements could provide additional momentum [2] Stock Recommendations - Recommended stocks based on relative price strength include Dell Technologies Inc. (DELL), Jabil Inc. (JBL), Phibro Animal Health Corporation (PAHC), and Hudbay Minerals Inc. (HBM) [3][9] Relative Price Strength Strategy - Investors should assess stocks based on earnings growth and valuation multiples, while also considering their performance relative to industry peers [4] - Underperforming stocks should be avoided, while those outperforming their sectors in price should be prioritized for potential returns [5] Investment Criteria - Stocks that have outperformed the S&P 500 over the past 1, 4, and 12 weeks, along with positive earnings estimate revisions, indicate growth potential [6][8] - A focus on analyst optimism regarding upcoming earnings is crucial, as upward revisions can lead to price gains [7] Screening Parameters - Stocks must show positive relative price changes over 1, 4, and 12 weeks, and have positive current-quarter estimate revisions [8] - Stocks must have a minimum price of $5 and an average 20-day volume of at least 50,000 for adequate liquidity [10] Company Profiles - **Dell Technologies Inc. (DELL)**: Market cap of $84.7 billion, expected EPS growth of 16% year-over-year for fiscal 2026, with a trailing earnings surprise of 2.3% [11][12] - **Jabil Inc. (JBL)**: Expected EPS growth rate of 16.6% over three to five years, with a 102% share price increase in the past year [13][14] - **Phibro Animal Health Corporation (PAHC)**: Market cap of $1.2 billion, expected EPS growth of 71.4% for fiscal 2025, with a 75.7% share price increase in the past year [14][15] - **Hudbay Minerals Inc. (HBM)**: Expected EPS growth rate of 51.7% over three to five years, with a 43.8% year-over-year growth estimate for 2025 and a 17.6% share price increase in the past year [16][17]

Group 1 - Allegro MicroSystems, Inc. (ALGM) is a notable stock within the Computer and Technology sector, which ranks 5 among 16 sector groups according to the Zacks Sector Rank [2] - The Zacks Rank for ALGM is currently 2 (Buy), indicating a positive analyst sentiment with a 21.8% increase in the full-year earnings estimate over the past quarter [3] - Year-to-date, ALGM has achieved a return of approximately 64.4%, significantly outperforming the average gain of 8.2% for the Computer and Technology sector [4] Group 2 - ALGM is part of the Electronics - Semiconductors industry, which consists of 44 companies and currently ranks 143 in the Zacks Industry Rank, with the industry gaining about 14.9% year-to-date [5] - Another stock in the Computer and Technology sector, Jabil (JBL), has also outperformed the sector with a year-to-date increase of 57.1% and holds a Zacks Rank of 1 (Strong Buy) [4][5] - The Electronics - Manufacturing Services industry, to which Jabil belongs, has seen a year-to-date increase of 47.6% and is currently ranked 47 [6]

Core Viewpoint - Jabil (JBL) has shown strong stock performance, increasing by 30.9% over the past month and reaching a 52-week high of $227.54, with a year-to-date gain of 57.1% compared to sector averages [1][2]. Financial Performance - Jabil has consistently exceeded earnings expectations, reporting an EPS of $2.55 against a consensus estimate of $2.33 in its last earnings report [2]. - For the current fiscal year, Jabil is projected to achieve earnings of $9.36 per share on revenues of $29.05 billion, reflecting a 10.25% increase in EPS and a 0.58% increase in revenues. The next fiscal year forecasts an EPS of $11.09 on revenues of $30.72 billion, indicating year-over-year changes of 18.45% and 5.75%, respectively [3]. Valuation Metrics - Jabil's stock trades at 24.2 times the current fiscal year EPS estimates, which is above the peer industry average of 22.2 times. On a trailing cash flow basis, it trades at 14.6 times compared to the peer group's average of 15.3 times. The stock has a PEG ratio of 1.46, which does not place it among the top value stocks [7]. Style Scores - Jabil has a Value Score of B, a Growth Score of B, and a Momentum Score of C, resulting in a combined VGM Score of A, indicating a favorable investment profile [6]. Zacks Rank - Jabil holds a Zacks Rank of 1 (Strong Buy) due to positive earnings estimate revisions from analysts, suggesting strong future performance potential [8][9].

Market Overview - Wall Street reached record-high levels, with the Dow, S&P 500, and Nasdaq Composite increasing by 5%, 10.6%, and 17.8% respectively in Q2 2025, marking it as the best quarter for U.S. stocks in the past year [1] - The small-cap benchmark, Russell 2000, also saw an 8.3% gain [1] - Positive market sentiment was driven by expectations of key trade deals and reduced fears of a near-term recession in the U.S. economy [2] Investment Opportunities - Recommended stocks with favorable Zacks Rank and momentum for Q3 include Jabil Inc. (JBL), Newmont Corp. (NEM), HEICO Corp. (HEI), Rockwell Automation Inc. (ROK), and The Estée Lauder Companies Inc. (EL), all holding a Zacks Rank 1 (Strong Buy) [3] Jabil Inc. (JBL) - Jabil is experiencing strong momentum in capital equipment, AI-powered data centers, cloud, and digital commerce sectors, with a focus on product diversification [6] - The company has a high free cash flow, indicating efficient financial management and operational efficiency [7] - Expected revenue and earnings growth rates for the next year are 5.9% and 18.5% respectively, with a 9% improvement in the Zacks Consensus Estimate for next-year earnings over the last 30 days [8] Newmont Corp. (NEM) - Newmont is progressing with growth projects, including the Tanami expansion and the Ahafo North project, with a commitment of $950 million to $1,050 million in development capital [10][11] - Expected revenue and earnings growth rates for the current year are 2% and 24.1% respectively, with a 3.3% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [11] HEICO Corp. (HEI) - HEICO is benefiting from increased orders for aftermarket replacement parts and repair services due to rising air travel and solid U.S. defense funding [12][13] - Expected revenue and earnings growth rates for the current year are 13.2% and 23.4% respectively, with a 1.1% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [14] Rockwell Automation Inc. (ROK) - Rockwell Automation is expanding its portfolio of hardware and software products, with investments in cloud technology supporting future growth [15] - Expected revenue and earnings growth rates for the next year are 6.7% and 16.1% respectively, with a 0.3% improvement in the Zacks Consensus Estimate for next-year earnings over the last seven days [17] The Estée Lauder Companies Inc. (EL) - The Estée Lauder Companies is focused on profitability through its Profit Recovery and Growth Plan, emphasizing innovation and digital expansion [18] - Expected revenue and earnings growth rates for the current year are 1.2% and 45.4% respectively, with a 0.5% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [20]

Market Overview - The S&P 500 reached new all-time highs, surpassing levels last seen in February, indicating strong investor confidence as summer approaches [1] - The market's strength is attributed to robust corporate earnings in Q1, with upcoming Q2 earnings being crucial for sustaining the rally [1] Company Highlights Advanced Micro Devices Inc. (AMD) - AMD reported Q1 2025 earnings of $7.44 billion, exceeding expectations of $7.1 billion, with a year-over-year growth of over 35% [4] - The company raised Q2 revenue guidance to a range of $7.1 billion to $7.7 billion, with a consensus expectation of $7.2 billion [4] - Analyst upgrades and strong earnings have led to a resurgence in AMD's stock, which has broken above key moving averages [6] Ulta Beauty Inc. (ULTA) - ULTA reported Q1 earnings with an EPS of $6.70, beating expectations by $0.97, and a quarterly revenue growth of 4.5% year-over-year [7] - The company raised its full-year 2025 sales guidance to $11.7 billion, with EPS projections increased to a range of $22.65 to $23.20 [7] - Following the earnings report, ULTA's stock jumped 11%, supported by a bullish technical signal known as the Golden Cross [9] Adobe Inc. (ADBE) - Adobe announced Q1 earnings of $5.06 EPS and revenue of $5.87 billion, representing over 10% year-over-year growth [10] - The company maintained its full-year 2025 revenue estimates but raised EPS projections to a range of $20.50 to $20.70 [12] - Despite strong earnings, Adobe's stock remains undervalued compared to tech peers, trading at 23 times forward earnings [10] Amer Sports Inc. - Amer Sports reported Q1 earnings with an EPS of $0.27, surpassing expectations of $0.12, and quarterly revenue of $1.47 billion, reflecting over 24% growth year-over-year [13] - The company raised guidance for full-year EPS and revenue, leading to new all-time highs for the stock [15] Jabil Inc. (JBL) - Jabil reported fiscal Q3 2025 net revenue of $7.8 billion, exceeding analyst expectations and internal projections by over $800 million [16] - EPS for the quarter was $2.55, a 35% year-over-year increase, with full-year revenue guidance raised to $29 billion [16] - The stock reached new all-time highs, supported by strong fundamentals and analyst backing, including a price target increase to $245 [18]