Core Insights - Nvidia is set to release its earnings report in one week, which is highly anticipated by investors and analysts [1] - Foxconn has reported strong sales in AI hardware, indicating a growing demand in the sector [1] Company Summary - Nvidia's upcoming earnings report is expected to provide insights into its performance and future outlook, particularly in the AI segment [1] - Foxconn's emphasis on strong AI hardware sales highlights its strategic focus on capitalizing on the increasing demand for AI technologies [1] Industry Summary - The AI hardware market is experiencing significant growth, as evidenced by Foxconn's sales performance, suggesting a robust trend in the industry [1] - Nvidia's earnings will likely reflect broader industry trends and the company's position within the competitive landscape of AI hardware [1]

Core Insights - Foxconn, the world's largest contract electronics manufacturer, reported a 17% increase in third-quarter profit, surpassing market expectations due to strong demand for artificial intelligence-related products [1] Financial Performance - The company's third-quarter profit rose by 17%, indicating robust financial health and effective management in a competitive market [1] Market Demand - The growth in profit is attributed to a significant demand for artificial intelligence products, highlighting a trend in the electronics manufacturing sector towards AI integration [1]

Core Insights - Cloud and networking products, including AI servers, represented 42% of total revenue, making it Foxconn's largest business segment [1] Group 1 - The significant contribution of cloud and networking products to overall revenue highlights the growing importance of this sector within Foxconn's business model [1] - The inclusion of AI servers in the product lineup indicates a strategic focus on emerging technologies and market trends [1] - The dominance of this segment suggests potential for future growth and investment opportunities in the cloud and networking industry [1]

Group 1: Government Shutdown and Market Impact - The Senate approved a bipartisan bill to end the 41-day government shutdown, the longest in U.S. history, which has positively impacted Wall Street and created a favorable environment for investing in momentum stocks [1] Group 2: Driehaus Strategy for Momentum Stocks - The Driehaus strategy, known as the "buy high and sell higher" approach, is highlighted as a proven investment method that has successfully identified momentum stocks [2][3] - Stocks selected using the Driehaus strategy include Insulet Corporation (PODD), Celestica Inc. (CLS), and Innodata Inc. (INOD), all of which meet key earnings and momentum criteria [8][10][11][12] Group 3: Key Criteria for Stock Selection - The strategy emphasizes strong earnings growth rates and impressive earnings projections, focusing on companies with a history of beating estimates [5] - Screening parameters include a Zacks Rank of 1 (Strong Buy), a Momentum Score of A or B, and specific EPS growth metrics, narrowing the stock universe to 13 candidates [6][9] Group 4: Company Profiles - **Insulet Corporation (PODD)**: Develops insulin delivery systems with a Momentum Score of A and a trailing four-quarter earnings surprise of 17.8% on average [10] - **Celestica Inc. (CLS)**: Provides global supply chain solutions, also with a Momentum Score of A and a trailing four-quarter earnings surprise of 6.9% on average [11] - **Innodata Inc. (INOD)**: A data engineering company with a Momentum Score of A and a trailing four-quarter earnings surprise of 55.9% on average [12]

Core Insights - Sanmina's third-quarter results exceeded Wall Street expectations, driven by strong revenue growth and improved non-GAAP earnings per share [1][3] - The company experienced heightened demand in communication networks and cloud and AI infrastructure segments, benefiting from a favorable product mix and operational efficiencies [1][3] - Ongoing investments in technology and capacity are positioning Sanmina for continued growth, as highlighted by CEO Jure Sola [1] Financial Performance - Revenue for Q3 was $2.10 billion, surpassing analyst estimates of $2.05 billion, reflecting a 3.9% year-on-year growth and a 2.2% beat [6] - Adjusted EPS was reported at $1.67, exceeding analyst expectations of $1.57, marking a 6.7% beat [6] - Adjusted EBITDA reached $154.9 million, with a margin of 7.4%, also beating analyst estimates of $151.5 million [6] Guidance and Market Outlook - Revenue guidance for Q4 is set at $3.05 billion at the midpoint, significantly above analyst estimates of $2.13 billion [6] - Adjusted EPS guidance for Q4 is projected at $2.10 at the midpoint, again above analyst expectations of $1.69 [6] - The operating margin for the quarter was 5.2%, consistent with the same quarter last year [6] Analyst Insights - CFO Jonathan Faust confirmed ZT Systems is operating at a $5–6 billion annual run rate with margins aligned with Sanmina's guidance [6] - Expectations for mid-single-digit growth in the legacy business are anticipated in the first quarter, with acceleration to high single digits later [6] - CEO Jure Sola indicated that Sanmina is expanding engineering and integrating teams to capitalize on opportunities in partnership with AMD [6] AI and Future Opportunities - Sanmina's pipeline for AI opportunities is strong, positioning the company to compete in data center AI for the coming years [6]

Core Insights - Celestica Inc. has been positively impacted by the ongoing AI and data center boom, leading to strong stock performance [1] Group 1: Company Performance - The stock of Celestica Inc. has been well rewarded due to its ability to capitalize on trends in AI and data centers [1]

Core Viewpoint - Investors are encouraged to consider Sanmina (SANM) due to solid improvements in earnings estimates and positive short-term price momentum [1][10] Earnings Estimates - Analysts have shown growing optimism regarding Sanmina's earnings prospects, leading to higher estimates that are expected to positively impact the stock price [2] - The consensus earnings estimate for the current quarter is $2.15 per share, reflecting a year-over-year increase of +49.3% [6] - Over the past 30 days, the Zacks Consensus Estimate for Sanmina has risen by 22.76%, with no negative revisions reported [6] - For the full year, the expected earnings per share is $9.64, indicating a change of +59.6% from the previous year [7] - The consensus estimate for the current year has increased by 32.42% over the same time frame [8] Zacks Rank - Sanmina has achieved a Zacks Rank 1 (Strong Buy) due to favorable estimate revisions, which is a strong indicator for potential stock performance [9] - The Zacks Rank system has a proven track record, with Zacks 1 Ranked stocks averaging an annual return of +25% since 2008 [3] Stock Performance - Sanmina's stock has gained 32.3% over the past four weeks, driven by solid estimate revisions and positive earnings growth prospects [10]

Core View - Key Tronic Corporation's shares have declined significantly, losing 12.2% since the first quarter of fiscal 2026 results, compared to a 1.3% decline in the S&P 500 index during the same period [1] - The company reported a substantial revenue drop of 24.9% year-over-year, leading to a net loss, contrasting with a profit in the previous year [2][3] Financial Performance - Revenues for the first quarter of fiscal 2026 were $98.8 million, down from $131.6 million a year ago [2] - The net loss was $2.3 million, or 21 cents per share, compared to a net income of $1.1 million, or 10 cents per share, in the prior-year quarter [2] - On a non-GAAP basis, the adjusted net loss was $1.1 million, or 10 cents per share, versus an adjusted profit of $2.8 million, or 26 cents per share, a year earlier [3] - Gross margin decreased to 8.4% from 10.1% a year earlier but improved from 6.2% in the prior quarter [4] - Operating margin turned negative at (0.6%), down from 3.4% last year [5] - Cash flow from operations was $7.6 million, down from $9.9 million in the same period last year [6] Operational Insights - Management noted that the decline in earnings was primarily due to weaker customer demand, delays in program launches, and a significant customer's bankruptcy, which led to a $1.6 million provision [10] - The company is expanding its manufacturing presence in the U.S. and Vietnam while rightsizing operations in Mexico to address ongoing uncertainties [7] - Key Tronic secured new programs in medical technology and industrial equipment, indicating diversification across end markets [8] Future Outlook - Management expects a gradual improvement in operating efficiency and a return to profitability by the end of fiscal 2026, contingent on the ramp-up of new programs [8][12] - Revenue growth for the second quarter is projected to remain unchanged sequentially, but ongoing efficiency initiatives are expected to bolster margins [13] - The company anticipates benefiting from the global shift toward nearshoring and supply-chain diversification [13] Strategic Developments - Key Tronic opened a new manufacturing facility in Springdale, AR, aimed at enhancing its U.S. footprint and technological capabilities [14] - In Vietnam, the company doubled its manufacturing capacity and obtained certification to produce medical devices, with initial production expected later in the fiscal year [14] - These expansions are part of a strategy to strengthen tariff mitigation and capture growing demand for localized manufacturing [15]

Financial Performance - Net sales for the company were $366 million, a 2% decrease compared to Q1 fiscal 2025[11, 13] - Gross margin rate in the first quarter was 7.9%, a 160 bps increase compared to the same period of fiscal 2025[27, 29] - Adjusted operating income was $17.5 million, or 4.8% of net sales, compared to $12.6 million, or 3.4% of net sales last year[37] - Borrowings at September 30, 2025, were $138 million, down $108 million, or 44%, from a year ago[51, 53] Segment Performance - Medical sales were $102 million, up 13% compared to the same period last year, representing 28% of total company revenue[14] - Automotive sales were $164 million, down 10% compared to the first quarter of last year, representing 45% of total company sales[16, 18] - Industrial sales totaled $100 million, a 1% decrease compared to Q1 last year, representing 27% of total company sales[19, 22] Fiscal Year 2026 Guidance - The company is reiterating its guidance for fiscal 2026, with net sales of $1.35 - $1.45 billion[55] - Adjusted operating income is expected to be 4.0% - 4.25% of net sales[55] - Capital expenditures are projected to be $50 - $60 million[55]

Core Viewpoint - Growth investors are attracted to stocks with above-average financial growth, but identifying such stocks can be challenging due to their inherent risks and volatility [1] Group 1: Company Overview - Fabrinet (FN) is identified as a promising growth stock, supported by a favorable Growth Score and a top Zacks Rank [2] - The company specializes in assembling optical, electro-mechanical, and electronic devices for other companies [3] Group 2: Earnings Growth - Fabrinet has a historical EPS growth rate of 24.6%, with projected EPS growth of 21.2% this year, surpassing the industry average of 18.9% [5] Group 3: Cash Flow Growth - The year-over-year cash flow growth for Fabrinet is 12.6%, significantly higher than the industry average of -14.2% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 20.6%, compared to the industry average of 5.1% [7] Group 4: Earnings Estimate Revisions - Current-year earnings estimates for Fabrinet have been revised upward, with the Zacks Consensus Estimate increasing by 0.7% over the past month [8] Group 5: Investment Potential - Fabrinet has achieved a Growth Score of B and a Zacks Rank 2, indicating it is a potential outperformer and a solid choice for growth investors [10]