For Immediate ReleaseChicago, IL – January 29, 2026 – Stocks in this week’s article are Micron Technology, Inc. (MU) and NVIDIA Corp. (NVDA) .Up 30%+ in 2025, 2 Profitable Semiconductor Stocks to Buy in 2026Now that 2026 is underway, investors should focus on companies that generate solid returns after covering all operating and non-operating expenses. As a result, profitable businesses tend to be more attractive than the money-losing ones. To assess profitability, investors should rely on accounting ratios ...

Key Takeaways Profitable chip stocks are gaining attention in 2026 as investors prioritize a strong net income ratio.MU posted a 12-month net profit margin of 28.2%, underscoring its strong profitability among chipmakers.NVDA reported a 53% net profit margin, showing its strong ability to generate income from computing solutions.Now that 2026 is underway, investors should focus on companies that generate solid returns after covering all operating and non-operating expenses. As a result, profitable businesse ...

Core Insights - SGA's U.S. Large Cap Growth Strategy experienced a portfolio return of -1.3% (Gross) and -1.4% (Net) in Q3, underperforming against the Russell 1000 Growth Index's return of 10.5% and the S&P 500 Index's return of 8.1% [1] - The investment strategy focuses on high-quality growth businesses expected to achieve consistent mid-teens earnings growth, stable revenue, and cash flow [1] - In Q3, lower-quality stocks and cyclical industries outperformed, negatively impacting SGA's investment style [1] Company Highlights - NVIDIA Corporation (NASDAQ:NVDA) was highlighted as a key stock in SGA's portfolio, with a one-month return of 1.70% and a 34.84% increase over the last 52 weeks, closing at $186.50 per share on December 31, 2025, with a market capitalization of $4.53 trillion [2] - NVIDIA's performance in Q3 was driven by surging demand for accelerated computing and AI infrastructure, with management projecting total infrastructure spending of $3-4 trillion in the future [3] - The company announced a $5 billion investment into Intel for joint product development, aimed at strengthening its AI infrastructure platforms and mitigating competitive threats [3] - NVIDIA also entered a significant deal with OpenAI, although expectations regarding this partnership are cautious due to uncertainties in funding, business use cases, and revenue models [3]

Core Insights - BlackRock Science and Technology Term Trust reported a return of 10.1% on market price and 11.6% on net asset value (NAV) for Q3 2025, underperforming the MSCI Custom ACWI SMID Growth IT Call Overwrite Index which returned 15.2% [1] - The trust adjusted its investments in the technology sector to align with changing market conditions and emerging opportunities [1] Company Highlights - NVIDIA Corporation (NASDAQ:NVDA) was highlighted as a key stock, with a one-month return of 3.73% and a 52-week gain of 40.16%, closing at $188.22 per share with a market capitalization of $4.583 trillion on December 29, 2025 [2] - NVIDIA's strong performance was attributed to record quarterly revenue and growth in its Data Center segment, particularly driven by AI compute chips, reinforcing its leadership in AI acceleration and next-generation data-center infrastructure [3] Market Position - NVIDIA Corporation ranked 5th among the 30 Most Popular Stocks Among Hedge Funds, with 234 hedge fund portfolios holding its stock at the end of Q3 2025 [4] - The company reported $57 billion in revenues for Q3 2026, reflecting a 62% year-over-year growth [4]

分组1 - Bailard Technology Strategy generated a 9.36% net return in Q3 2025, underperforming compared to the S&P North American Technology Index's 13.14% return and the Morningstar U.S. Open-End Technology Categories' 11.64% return [1] - The quarter showed improved technology fundamentals driven by structural demand trends and evolving regulations across key verticals [1] - NVIDIA Corporation (NASDAQ:NVDA) was highlighted as a cornerstone holding, contributing +216 basis points to the strategy with an 18.10% return [3] 分组2 - NVIDIA Corporation reported $57 billion in revenues for Q3 2026, marking a 62% year-over-year growth [3] - NVIDIA's stock gained 38.58% over the last 52 weeks, closing at $190.53 per share on December 26, 2025, with a market capitalization of $4.639 trillion [2] - The company continues to lead in accelerated computing and datacenter networking, supported by its unmatched developer ecosystem and innovation cadence [3]

Core Insights - Investors should focus on companies that generate strong returns after covering all expenses, favoring profitable firms over those that are losing money [1] Company Selection - NVIDIA Corporation (NVDA), Micron Technology, Inc. (MU), and Seagate Technology Holdings plc (STX) are identified as top picks from the S&P 500 due to their high net income ratios [2][8] Net Income Ratio - The net income ratio measures a company's profitability by reflecting the percentage of net income to total sales revenues, indicating effectiveness in managing expenses [3] Screening Parameters - Additional criteria for selecting winning stocks include: - Zacks Rank equal to 1, indicating 'Strong Buys' [4] - Trailing 12-month sales and net income growth higher than the industry average [5] - Trailing 12-month net income ratio higher than the industry average [5] - Percentage of broker recommendations rated as Strong Buy greater than 70% [5] Qualified Stocks - The screening process narrowed down over 7,685 stocks to 26, with notable mentions: - NVIDIA has a 12-month net profit margin of 53% [6][8] - Micron has a 12-month net profit margin of 28.2% [7][8] - Seagate Technology has a 12-month net profit margin of 17.9% [9][8]

Market Overview - The market entered Q4 2025 with equities near all-time highs and monetary policy easing, indicating potential for continued momentum despite signs of a capital expenditure bubble [1] - Brasada Capital Management continues to invest selectively in companies with strong moats and cash flows while avoiding balance-sheet risks [1] Company Focus: NVIDIA Corporation - NVIDIA Corporation (NASDAQ:NVDA) is highlighted as a key investment, offering graphics, compute, and networking solutions [2] - The one-month return for NVIDIA was -3.29%, while its shares gained 32.59% over the last 52 weeks, closing at $175.76 per share with a market capitalization of $4.279 trillion on December 15, 2025 [2] Industry Analysis: OpenAI and AI Ecosystem - OpenAI's current position is compared to Microsoft Windows in the PC era, emphasizing its leverage through ChatGPT to build a massive user base [3] - This user base allows OpenAI to influence the entire AI value chain, from chipmakers to cloud providers, orchestrating the development of the AI ecosystem on its terms [3]

Core Insights - Investors are encouraged to focus on companies that generate strong returns after all expenses are paid, emphasizing the importance of profitability over loss-making businesses [1] - The global AI market is expected to grow significantly, from $371.71 billion in 2025 to $2,407.02 billion by 2032, indicating a compound annual growth rate (CAGR) of 30.6% [2] - NVIDIA Corporation, Micron Technology, and Vertiv Holdings are highlighted as top AI investment picks due to their high net income ratios [3] Company Analysis - **NVIDIA Corporation (NVDA)**: - Recognized for its computing infrastructure, NVDA has a 12-month net profit margin of 53%, showcasing strong AI-driven profitability [7][9] - **Micron Technology, Inc. (MU)**: - Engaged in memory and storage products, MU has a 12-month net profit margin of 22.9%, supported by higher-than-industry sales and income growth [10][9] - **Vertiv Holdings Co. (VRT)**: - Provides critical digital infrastructure and lifecycle services, with a 12-month net profit margin of 10.7%, benefiting from increased demand for digital infrastructure [11][9] Investment Screening Criteria - The net income ratio is a key indicator of profitability, reflecting the percentage of net income to total sales revenues [4] - Additional screening parameters include: - Zacks Rank of 1 (Strong Buy) indicating a history of outperformance [5] - Trailing 12-month sales and net income growth higher than the industry average [6] - A strong buy percentage rating greater than 70% from current broker recommendations [6] - These criteria have narrowed the stock universe from over 7,685 to only 11 qualifying stocks [6]

Core Viewpoint - Nvidia's stock performance is being closely monitored as demand for AI fuels growth, but there are significant risks that could impact its valuation and market position [2][4]. Financial Performance - Nvidia's revenue has increased by 65% over the last 12 months, rising from $113 billion to $187 billion, with quarterly revenues up 62.5% to $57 billion from $35 billion a year prior [9]. - The company's operating income for the past 12 months was $110 billion, resulting in an operating margin of 58.8% and a cash flow margin of 44.4%, generating nearly $83 billion in operating cash flow [10]. Market Position and Valuation - Nvidia has a market capitalization of $4.5 trillion and is a key player in providing graphics, computation, and networking solutions across various sectors, including gaming and data centers [6]. - The stock is currently viewed as having a very high valuation, with a potential target price of $133, indicating a general negative outlook despite strong operating efficacy and financial health [3][7]. Risks and Challenges - Nvidia's heavy reliance on data-center GPU demand poses a risk, as any slowdown in AI spending by major customers could significantly impact revenue [4]. - Competition is intensifying from companies like AMD, Intel, and custom chips from Amazon and Google, which could reduce Nvidia's market share in high-margin GPUs [4]. - Regulatory risks are increasing, particularly due to U.S. export restrictions affecting sales to China, a historically significant market for Nvidia [4]. Historical Stock Performance - Nvidia's stock has shown volatility, with a decline of 66.4% from a peak of $33.38 on November 29, 2021, to $11.23 on October 14, 2022, compared to a 25.4% drop for the S&P 500 [14]. - The stock recovered to its pre-crisis high by May 25, 2023, and reached a peak of $207.04 on October 29, 2025, currently trading at $185.55 [14].

Core Insights - Brown Advisory's Large-Cap Growth Strategy reported a net return of -0.88% in Q3 2025, underperforming the Russell 1000 Growth Index due to underweighting speculative momentum-driven stocks despite significant AI exposure [1] - NVIDIA Corporation (NASDAQ: NVDA) was highlighted as a key stock, experiencing a one-month return of -4.52% but a 52-week gain of 23.80%, with a market capitalization of $4.37 trillion as of December 3, 2025 [2] - NVIDIA's stock rebounded over 90% from April lows, driven by earnings exceeding expectations and improved gross margin guidance, alongside strategic partnerships and recovery from earlier demand concerns [3] Company Performance - NVIDIA reported $57 billion in revenues for Q3 2026, reflecting a 62% year-over-year growth, maintaining its position as a popular stock among hedge funds with 234 portfolios holding its shares [4] - The company is positioned as a market leader in advanced graphics processing units, benefiting from ongoing demand in AI infrastructure [3][4] Investment Outlook - While NVIDIA shows strong potential, there are suggestions that other AI stocks may offer greater upside with less downside risk, indicating a competitive landscape in the AI sector [4]