The Zacks Research Daily highlights the top analytical insights from our expert team. In today’s edition, we focus on 16 significant stocks, including Broadcom Inc. (AVGO), Oracle Corp. (ORCL), and Cisco Systems, Inc. (CSCO), as well as a notable micro-cap stock, United-Guardian, Inc. (UG). The unique aspect of Zacks’ micro-cap research is that it provides exclusive insights into smaller, lesser-known companies, making it a distinctive offering in the industry. These reports have been carefully selected from approximately 70 analyses released by our analysts today.
Preparation for Market Movements
The ‘Ahead of Wall Street’ segment is essential reading for investors keen on preparing for the day’s trading landscape. Released prior to market openings, this article aims to clarify the economic data released that morning and its potential impacts on market behavior throughout the day. Investors can access this article for free on our homepage and can also subscribe to receive email notifications when it is published each morning.
Market Trends Before Key Reports
Today’s Featured Research Reports
Broadcom has seen its stock perform significantly better than the Zacks Electronics – Semiconductors sector over the last year, with an impressive increase of 93.1% compared to the sector’s 51.1%. The company benefits from robust demand for AI semiconductors and a successful integration of VMware. Notably, the demand for networking products and custom AI accelerators (XPUs) is strong, significantly enhancing performance and efficiency in large-scale AI applications. However, it is anticipated that gross margins will decrease in the fiscal fourth quarter, and the company’s high debt levels present challenges.
Oracle has also outperformed the Zacks Computer – Software sector in the past year, with its shares climbing 85.2% against the sector’s 20.2%. The company reported a total revenue of $14.9 billion for the first quarter of fiscal 2026, marking a 12% increase year-over-year. Cloud revenue surged 28% to reach $7.2 billion, driven by heightened demand for infrastructure. A particularly noteworthy metric is the remaining performance obligations (RPO), which skyrocketed by 359% to $455 billion after signing multiple billion-dollar contracts with three clients. The company is planning $35 billion in capital expenditures for fiscal 2026, primarily aimed at enhancing its cloud infrastructure.
Cisco’s stock performance has slightly lagged behind the Zacks Computer – Networking sector, with a rise of 27.8% compared to the sector’s 27.9%. The company has shifted its business model, with subscription revenues now constituting over half of its total income, which is favorable for investors. The recent acquisition of Splunk is expected to bolster its recurring revenue base significantly, contributing over $4 billion in annual recurring revenue (ARR) and positioning Cisco as one of the largest software firms globally. Nevertheless, the company faces challenges from declining sales in the networking segment, primarily due to weak demand from telecommunications and cable service providers, along with increasing competition.
United-Guardian’s shares have not fared well in comparison to the Zacks Medical-Products sector, declining by 49.3% against the sector’s marginal increase of 0.6%. The company is grappling with risks stemming from high customer concentration, exposure to tariffs, and limited investment in research and development, which has hindered its growth pipeline. Additionally, profitability is under pressure from selling, general and administrative expenses and a drop in investment income. Despite these challenges, United-Guardian’s first-quarter 2025 results showcased effective margin control and strategic diversification despite a 24% revenue drop, with pharmaceutical sales increasing by 23% and medical lubricant sales rising by 43%, helping to mitigate the impact of temporary inventory issues in China.
Additional Noteworthy Reports
Further significant reports featured today include AT&T Inc. (T), Moderna, Inc. (MRNA), and The Kroger Co. (KR).
Key Insights
Broadcom (AVGO) is seeing strong demand for its networking products. Oracle (ORCL) is benefiting from the adoption of its cloud suite and strategic partnerships. Cisco (CSCO) is experiencing growth due to the increasing adoption of its security products.
Featured Reports
AT&T (T) is expected to gain from a customer-focused business model and robust wireless growth, supported by a strategy to expand fiber and steady 5G rollouts. Moderna (MRNA) is shifting focus to its non-COVID-19 pipeline as vaccine sales decline, with promising product launches anticipated over the next five years. Coterra Energy (CTRA) is likely to benefit from strong production volumes, although concerns linger over weak price realizations. Kroger (KR) is leveraging its customer-first approach and extensive private label offerings to enhance shopper loyalty and engagement. Deutsche Bank (DB) is seeing growth from its diverse revenue streams, although high costs, including litigation, pose challenges. Cooper Companies (COO) is experiencing growth driven by premium lens demand, offsetting weakness in specific regions. Meritage Homes (MTH) is benefiting from a solid speculative strategy, although affordability issues in the housing market remain a concern.
Recent Upgrades
Sonic’s (SAH) EchoPark segment is set to thrive, supported by data-driven inventory management and favorable trends in the used-car market. Pediatrix Medical (MD) is benefiting from portfolio restructuring and expanding telehealth services, enhancing its profitability. Oshkosh (OSK) is expanding through strategic acquisitions and new defense contracts that boost production.
Recent Downgrades
FactSet (FDS) faces headwinds from pricing pressures that may affect its revenue and market share, while integration risks are heightened as it pursues acquisitions. Murphy Oil (MUR) could be impacted by fluctuating commodity prices and competitive pressures affecting profitability. Carlisle (CSL) is struggling with underperformance in its Weatherproofing Technologies segment due to a slowdown in residential construction and project delays.
