Maxim Weekly Maxim Weekly

Alphabet’s stock is up about 67% over the past year and roughly 18% this month, yet recent results suggest its fundamentals still support further upside, with Q3 revenue up 16% and operating margins at 34%. Google Cloud remains a key growth engine, with revenue up 33% and operating income up 89% in Q3, while a deepening AI push, including the Anthropic–TPU deal worth up to $10 billion annually and 650 million Gemini users, underscores its ability to monetize AI across cloud and search.

Advertising still accounts for about 73% of revenue, but stronger ad and search demand have driven repeated revenue and EPS beats, and analysts now forecast EPS to grow at roughly a 16.7% compound annual rate through 2027, with current-quarter EPS expected to rise 20% and full-year EPS nearly 31%. With $98 billion in cash against $22 billion in debt, active buybacks, a dividend, and a valuation around 25 times 2027 earnings, Alphabet offers balance between scale, AI leverage, and financial strength, though Zacks’ D valuation grade and Rank #3 (Hold) flag that multiple expansion may slow.

Nvidia delivered another blockbuster fiscal Q3, with revenue surging to $57 billion, up 62% year over year, powered by intense data center demand for its Blackwell GPUs and a gross margin of 73.6%. Earnings per share climbed about 60%, the company returned roughly $37 billion via buybacks and dividends this year with $62 billion still authorized, and management guided Q4 revenue to nearly $65 billion, about 65% growth.

Policy risk may be easing as the White House urged Congress to block a bill that would tighten GPU export curbs to China, a market Nvidia estimates at around $50 billion in opportunity, though investors are cautioned not to price this in until there is concrete legislative or licensing progress. Management also stressed that CUDA keeps older A100 GPUs fully utilized even six years on, underscoring Nvidia’s software moat but also raising questions about whether longer hardware life could slow future upgrade cycles and pressure growth.

Costco’s stock has pulled back about 14% and sits roughly 17% below its peak, even as fundamentals remain strong with Q4 revenue up 8%, EPS up 11%, and fiscal 2025 same-store sales rising 5.9%. Membership income jumped 17% in Q4 and 10% for the year, renewal rates in the U.S. and Canada remain near 92%, and membership households grew 6.3% to 81 million, supporting recurring, high-quality revenue.

Growth drivers include steady warehouse expansion with 27 stores opened in fiscal 2025 and 35 planned, e-commerce growth of 13.5% in Q4 that now represents 7% of sales, and an affluent, loyal customer base. Zacks assigns Costco a Growth Style Score of A and projects 11% earnings growth with fiscal 2026 consensus at $19.97 per share, but the stock trades at a rich price-to-earnings multiple near 49 and carries only a Zacks Rank #3 (Hold), signaling valuation risk despite its long-term appeal.

Palo Alto Networks reported solid fiscal Q1 results with revenue up 16% to $2.47 billion, EPS ahead of guidance, and strong platform traction as XSIAM deals doubled, next-generation ARR grew 29%, and SASE ARR climbed 34%. Management raised guidance and is pursuing a $3.35 billion acquisition of Chronosphere while also targeting CyberArk, moves that deepen observability and AI capabilities but introduce integration and execution risk.

Sentiment is mixed: brokers remain bullish with an average recommendation of 1.65 and about two-thirds of ratings at Strong Buy, yet Zacks assigns a Rank #4 (Sell) after consensus EPS estimates slipped 0.3% to $3.80, emphasizing that estimate revisions, not ratings, drive near-term moves. Options markets echoed the split, with 18 unusual trades totaling nearly $1 million split between calls and puts across $150 to $250 strikes over the next three months, implying expectations for a sizable move without directional conviction.

Tesla’s market value jumped roughly $90 billion following bullish commentary on its Dojo AI chips and an accelerated robotaxi and Full Self-Driving rollout, even as core EV fundamentals deteriorate with European sales down 48.5%, shrinking China share, and margin pressure. Bulls argue Tesla’s FSD lead is nearing an irreversible tipping point that could drive a “hundreds of billions” value shift, calling the stock a “must own” as catalysts like FSD v14.3, Nevada self-certification for robotaxis, licensing deals, and in-house AI chip ramping come into focus.

Regulators remain cautious, with the Dutch RDW stressing that safety is paramount and requiring Tesla to prove FSD Supervised meets EU standards by February 2026, with approval contingent on a majority of member states and extensive testing, while U.S. oversight from NHTSA is still an overhang. Analysts warn that current targets often assume near-flawless execution, so investors should closely track EV demand trends, margins, regulatory milestones, and the Musk compensation court case to gauge whether AI-driven optimism can offset weakening auto fundamentals.