Core Insights - Three stocks are highlighted with strong buy rankings and positive momentum characteristics for investors to consider on October 28th Company Summaries Medpace (MEDP) - Medpace is a global, full-service clinical contract research organization providing Phase I-IV clinical development services to the biotechnology, pharmaceutical, and medical device industries - The company has a Zacks Rank of 1 (Strong Buy) and the Zacks Consensus Estimate for its current year earnings has increased by 3.6% over the last 60 days - Medpace's shares have gained 31.7% over the last three months, significantly outperforming the S&P 500's gain of 7.6%, and it possesses a Momentum Score of A [1][2] Vertiv (VRT) - Vertiv is a leading global provider of critical digital infrastructure and services for data centers, communication networks, and commercial and industrial environments - The company also holds a Zacks Rank of 1 and has seen the Zacks Consensus Estimate for its current year earnings increase by 7.6% over the last 60 days - Vertiv's shares have increased by 35.4% over the last three months, again outperforming the S&P 500's gain of 7.6%, and it has a Momentum Score of A [2][3] TakeTwo Interactive Software (TTWO) - TakeTwo Interactive Software is a leading developer and publisher of video games - The company has a Zacks Rank of 1, with the Zacks Consensus Estimate for its current year earnings rising by 0.7% over the last 60 days - TakeTwo's shares have gained 12.4% over the last three months, surpassing the S&P 500's gain of 7.6%, and it has a Momentum Score of B [3][4]

Economic Overview - The U.S. inflation rate has reached 3% in September, the highest level since January, with consumer prices rising by 0.3% in that month, up from an annual rate of 2.9% [1][9]. Investment Opportunities - Amid rising inflation, dividend growth stocks present a favorable investment option as their increasing payouts can help maintain purchasing power [2][9]. - Companies with a strong history of dividend growth tend to have robust financial health, providing a defensive hedge against economic uncertainty [4][5]. Selected Dividend Growth Stocks - Five dividend growth stocks identified as solid investment choices include: - **Vertiv (VRT)**: Expected revenue growth of 27.5% for 2025, long-term earnings growth rate of 30%, and an annual dividend yield of 0.08% [10][11]. - **Taiwan Semiconductor (TSM)**: Projected revenue growth of 33.8% for 2025, long-term earnings growth rate of 29.2%, and an annual dividend yield of 0.88% [11]. - **Oracle (ORCL)**: Anticipated revenue growth of 16.5% for fiscal 2026, long-term earnings growth rate of 17.2%, and an annual dividend yield of 0.71% [12]. - **Lam Research (LRCX)**: Expected revenue growth of 11.9% for fiscal 2026, long-term earnings growth rate of 19.6%, and an annual dividend yield of 0.69% [13]. - **Elbit Systems (ESLT)**: Projected revenue growth of 16.4% for 2025, long-term earnings growth rate of 23.3%, and an annual dividend yield of 0.51% [14]. Investment Criteria - Stocks selected for their strong fundamentals include criteria such as: - Positive 5-Year Historical Dividend Growth, Sales Growth, and EPS Growth [6][7]. - Price/Cash Flow ratio less than the industry average, indicating undervaluation [8]. - 52-Week Price Change greater than the S&P 500, ensuring better performance over the past year [8].

Core Insights - Riot Platforms, Inc. (NASDAQ:RIOT) is recognized as one of the 12 most promising blockchain and crypto mining stocks by hedge funds [1] - Piper Sandler has raised its price target for Riot Platforms from $18 to $25 while maintaining a "Neutral" rating [2] - The firm anticipates potential partnerships in AI and high-performance computing (HPC) at Riot's facilities in Corsicana and Rockdale, Texas, due to their significant power access and proximity to major metro areas [3] Company Overview - Riot Platforms operates large-scale Bitcoin mining and engineering facilities across Texas and Kentucky, providing power infrastructure, custom electrical solutions, and data center services to industrial and governmental clients [5] Strategic Outlook - Piper Sandler believes that Riot Platforms is positioned to explore discussions for transitioning part of its Bitcoin mining operations towards high-performance computing applications, indicating potential long-term strategic diversification [4]

Core Insights - Digerati Technologies, Inc. has appointed Mr. Robert DelVecchio as Chairman and CEO, bringing over 30 years of capital markets and business experience [2][3] - The company aims to expand its recurring revenue through its subsidiary WaivCloud, which provides co-location data center services [3] - DelVecchio has a successful track record, having previously led Assured Pharmacy to $20 million in annual revenue and a successful sale to a private equity firm [3] Company Overview - Digerati Technologies operates through its subsidiary WaivCloud, providing co-location and related technology infrastructure solutions across the United States [4] - The mission of WaivCloud is to deliver secure, reliable, and scalable data center solutions, focusing on exceptional customer service and building lasting relationships [4]

Core Insights - Supermicro is launching a new business line called Data Center Building Block Solutions to assist customers in building complete data centers, which includes GPUs, servers, networking, cooling, and electrical systems from a single vendor [1] - The new offering aims to reduce the time-to-online for data centers, which is critical for customers to start generating revenue [2] - Supermicro's CEO, Charles Liang, emphasized that the new services will expedite data center construction and highlighted the efficiency of their liquid-cooling options, which are optimized for modern hardware [3][4] Industry Context - The demand for data center construction has surged due to the AI boom, with major companies like Amazon, Google, Microsoft, Meta, and xAI investing heavily in building large data centers [5] - Supermicro's liquid-cooling technology can reduce power consumption by up to 40% compared to traditional air-cooled data centers, making it a competitive offering in the market [4] Company Performance - Supermicro's shares have increased by approximately 81% year-to-date, although they are up only 15% over the past year, indicating volatility [6] - The company faced challenges due to accusations of accounting irregularities and auditor resignation, which previously led to a significant drop in share price [6] - An independent committee found no evidence of misconduct by Supermicro's executives or board, which may help restore investor confidence [7]

Applied Digital reported much stronger-than-expected revenue on growing demand for its artificial intelligence data center services. https://t.co/YNIqqq6xrP ...

Core Insights - Applied Digital's shares increased by 26% following the announcement of first-quarter revenue that exceeded analysts' expectations, driven by the growing adoption of artificial intelligence applications [1] Group 1: Company Performance - The company reported first-quarter revenue that surpassed analysts' estimates, indicating strong financial performance [1] - The surge in share price reflects positive market sentiment towards the company's growth prospects in the AI sector [1] Group 2: Industry Trends - The rising adoption of artificial intelligence applications is a key factor contributing to the company's revenue growth, highlighting a broader trend in the data center service industry [1]

Core Insights - Applied Digital (APLD.US) shares surged over 32% to $38.8 following the release of its first fiscal quarter results, which exceeded Wall Street expectations despite a net loss [1] Financial Performance - The company reported a revenue increase of 84% year-over-year, reaching $64.2 million, surpassing analysts' expectations of $50 million [1] - Adjusted earnings per share showed a loss of $0.03, which was better than the anticipated loss of $0.13 [1] - Revenue from the data center hosting segment amounted to $37.9 million during the quarter [1] Cost Analysis - The company's cost of revenue rose by 144% to $55.6 million [1] - Approximately $25 million of the costs were associated with the construction of facilities and customer preparation for the high-performance computing hosting segment [1]

Core Insights - Applied Digital exceeded Wall Street revenue estimates for the first quarter, driven by increased demand for its data center services as customers expand their computing capabilities to support rapid growth in various sectors [1] Group 1: Financial Performance - The company reported first-quarter revenue that surpassed analyst expectations, indicating strong market performance [1] - The surge in demand for data center services reflects a broader trend in the industry as businesses scale up their computing resources [1] Group 2: Market Demand - There is a notable increase in customer demand for data center services, which is a key driver of the company's revenue growth [1] - The trend of scaling up computing resources is likely to continue as industries adapt to fast-growing technological needs [1]

Financial Data and Key Metrics Changes - Underlying EBIT earnings increased by 78% from 2023 to 2025, moving from $8 million to $32 million [20] - Revenue grew from $325 million to $427 million, driven by a $100 million increase in hyperscaler revenue over the two-year period [21][22] - Operating costs increased by only 15% over the same period, resulting in a 7% decrease in operating costs as a percentage of overall revenue [22][23] Business Line Data and Key Metrics Changes - Revenue streams are categorized into resale revenue, service fees, and commodity recovery, with hyperscalers now contributing 47% of total revenue, up from 31% in 2023 [27] - Repurposed units have doubled, indicating robust market growth beyond just price increases [23] Market Data and Key Metrics Changes - The company serves hyperscalers, enterprises, and OEMs, with long-term contracts in place for most clients [17] - The investment in AI data centers is projected to remain strong, with significant growth expected in both new builds and upgrades of existing facilities [57] Company Strategy and Development Direction - The company aims to remain capital light, focusing on automation and geographic expansion to capture market share [30][31] - Strategic positioning in the AI sector is emphasized, with a focus on providing tech services to hyperscalers [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the AI sector and the company's ability to capture a meaningful share of the market [30][31] - The competitive landscape is characterized by a mix of local providers and a few global competitors, with the company positioned to leverage its unique capabilities [11][12] Other Important Information - The company has invested significantly in growth capacity, with over 50% of capital expenditures directed towards this goal [13] - The integration of systems with clients is crucial for maintaining competitive advantage and ensuring service delivery [72][80] Q&A Session Summary Question: How should we think about the growth in hyperscalers influencing margins? - Management expects margins to increase alongside hyperscaler growth due to cost control and efficiency [32][33] Question: Is the hyperscaler customer segment higher margin? - The growth in hyperscalers touches all three revenue streams, with expectations of increased service revenue contributing to higher margins [35][37] Question: How does the company scale its operations? - Scaling involves adding shifts and automating processes where feasible, allowing for flexibility in response to demand [43][44] Question: What drives the four-year delay in revenue recognition? - The four-year cycle is based on typical refresh rates for technology, which are currently accelerating due to AI demands [82] Question: Why do clients choose this company over competitors? - The company’s ability to move quickly, integrate systems, and provide a high level of service are key differentiators [58][60]