When AI Needs More Power, This Supplier Gets the Cleaner Setup
Record highs are back, oil is falling, and earnings growth remains strong.
This week’s list stays below the megacaps and focuses on five companies where better guidance, stronger margins, or improving demand are already showing up in the numbers.
AI reset (Sponsored)
Some AI stocks have captured most of the headlines—but one veteran analyst believes the next opportunities may lie elsewhere.
In his latest free briefing, he shares a simple "Sell This, Buy That" strategy, along with a Hotlist and Hitlist of stocks he's watching as the AI landscape continues to evolve.
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Advanced Energy Industries (AEIS)
Catalyst: Record revenue, stronger margins, and rising demand for precision power systems
The Quarter
Advanced Energy delivered the kind of quarter that turns a niche supplier into a serious watchlist name. Second-quarter revenue rose 30% to a record $574 million, beating the top end of management’s guidance.
Semiconductor revenue increased 33%, non-GAAP gross margin reached 41.9%, and adjusted earnings climbed to $2.74 per share. Cash flow from continuing operations also reached a record $86 million.
Why It Matters
The company sits in a useful part of the AI infrastructure chain. Data centers and semiconductor factories need increasingly complex power-conversion systems as racks become more energy-intensive. Advanced Energy supplies the hardware that controls and delivers that power efficiently.
That gives the company exposure to AI spending without forcing investors into another expensive chip designer. The market is starting to recognize that position, but the business remains far less discussed than most data-center winners.
The Setup
The stock jumped after earnings, so the entry matters. The numbers justify keeping it high on the screen, but a premium valuation leaves little room for weaker guidance.
My Take: Buy pullbacks after the earnings surge. The demand trend is strong, but the valuation makes chasing risky.
What to watch: Semiconductor revenue, data-center power demand, gross margins, and third-quarter guidance.
Market Signal (Sponsored)
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Zebra Technologies (ZBRA)
Catalyst: Earnings jumped 76% as automation demand returned across industrial customers
The Recovery Is Real
Zebra Technologies gave investors a much stronger recovery signal than the market expected. Second-quarter revenue increased 20% to approximately $1.6 billion, while adjusted earnings surged 76% to $6.35 per share.
Management raised its full-year targets. Zebra now expects sales growth of roughly 15% and adjusted earnings of about $21 per share.
The Practical Side of Automation
Zebra’s barcode scanners, mobile computers, RFID systems, and automation tools help retailers, manufacturers, hospitals, and warehouses track inventory and improve workflows.
This is where AI becomes practical instead of promotional. Companies need accurate data from warehouses, factories, stores, and supply chains before automation software can improve anything. Zebra provides much of that physical layer.
Wait for a Better Entry
The stock surged more than 25% after the report. That move confirms the turnaround, but it also removes the easy entry.
My Take: Wait for the excitement to cool. The recovery deserves attention, but the earnings gap is too large to chase immediately.
What to watch: Order growth, manufacturing demand, operating margins, and execution against the new guidance.
Grab Holdings (GRAB)
Catalyst: Revenue rose 22% and management raised its full-year forecast
Scale Is Turning Into Growth
Grab is starting to look less like a speculative superapp and more like a real operating business. Second-quarter revenue increased 22% to $997 million, while gross merchandise value across mobility and deliveries climbed 21% to $6.5 billion.
Management raised its 2026 revenue forecast to between $4.10 billion and $4.15 billion.
AI With an Actual Purpose
The company said its AI investments are improving productivity, helping it develop products faster and removing thousands of hours of sales inefficiency.
The important point is not that Grab mentioned AI. Nearly every company does. The point is that the technology is showing up in operating costs and margins while the core ride-hailing and delivery businesses keep growing.
Grab also used incentives to support drivers and keep prices affordable during a difficult fuel environment. That helped increase both available drivers and customer rides.
The Risk Still Matters
Southeast Asian competition is intense, incentives can quickly absorb profit, and the financial-services expansion adds another layer of execution risk. But the operating trend is clearly improving.
My Take: Keep GRAB on the watchlist as a smaller growth position. Revenue momentum is strong, but profitability still needs more proof.
What to watch: Mobility growth, delivery margins, incentive spending, free cash flow, and financial-services losses.
AI shift (Sponsored)
Artificial intelligence is changing the way companies operate—and one new initiative linked to Elon Musk is attracting attention.
According to a veteran market analyst, the biggest opportunity may not be the household names, but a little-known company supporting the technology behind the scenes.
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Archer-Daniels-Midland (ADM)
Catalyst: Biofuel margins improved and management lifted its earnings outlook by more than 20%
A Major Guidance Reset
ADM delivered one of the largest outlook increases of earnings season. The company raised its 2026 adjusted earnings forecast to $5.15 to $5.60 per share, up from its previous range of $4.15 to $4.70.
Second-quarter adjusted earnings reached $1.84 per share, well ahead of the $1.44 analysts expected. Operating profit in agricultural services and oilseeds jumped 129% from a year earlier.
What Changed
The catalyst is a better biofuels environment. Higher blending requirements are supporting demand for corn-based ethanol and soybean oil used in renewable diesel.
Stronger grain prices have also encouraged farmers to sell more stored crops, increasing processing volumes. ADM struggled when global grain supplies were high and processing spreads were weak. That pressure is now reversing.
A Turnaround, Not a Growth Story
This is not a flashy stock. It is a margin and policy turnaround. The higher forecast shows that the improvement is large enough to change the earnings story.
Commodity margins never move in a straight line, however. A change in biofuel policy, crop prices, or global trade flows can weaken the setup quickly.
My Take: Stay constructive while estimates keep moving higher. ADM offers a cleaner value setup than most high-multiple earnings winners.
What to watch: Soybean crushing margins, ethanol profitability, nutrition results, Chinese grain purchases, and biofuel policy.
LATAM Airlines Group (LTM)
Catalyst: Higher earnings guidance as lower fuel expectations improve the second-half setup
The Guidance Increase
LATAM Airlines survived a brutal fuel shock and still raised its full-year earnings outlook. The company now expects adjusted EBITDA of $4.1 billion to $4.4 billion, up from its previous forecast of $3.8 billion to $4.2 billion.
Revenue grew 27% to $4.12 billion, supported by passenger traffic and cargo demand. The company expects capacity to rise between 9% and 10% this year.
Fuel Relief Changes the Math
LATAM absorbed more than $800 million of additional fuel costs during the quarter. Oil and jet-fuel expectations have since moved lower, giving the second-half margin outlook more room to recover.
The company is also expanding in Brazil, with up to 14 Embraer E195-E2 aircraft scheduled to enter service between late 2026 and early 2027. Those aircraft will support 42 routes and increase exposure to business-heavy markets.
The Airline Risk
Airlines remain difficult investments. Fuel can reverse quickly, currency swings matter, and capacity growth can pressure fares.
Still, LATAM has shown that its network can generate revenue through a difficult operating environment. The upgraded outlook gives the stock a stronger setup if fuel stays contained.
My Take: Buy broader travel-sector weakness while the raised earnings outlook remains intact. This works best as a tactical position, not a low-risk core holding.
What to watch: Fuel prices, passenger yields, Brazilian capacity, cargo demand, and debt reduction.
Poll: What single position are you watching most closely this week?
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Final Word
Five Different Paths to Better Earnings
Advanced Energy supplies the power systems behind AI infrastructure. Zebra is benefiting from a real automation recovery. Grab is turning regional scale into stronger operating results. ADM has a biofuel-driven earnings reset. LATAM is emerging from the fuel shock with higher guidance.
The Risks Have Not Disappeared
Advanced Energy and Zebra have already moved sharply. Grab still has to prove sustainable profitability. ADM remains exposed to commodity cycles. LATAM depends heavily on fuel and travel demand.
The Takeaway
Move below the megacaps, but keep the earnings standard high. The better opportunities still have revenue growth, stronger guidance, and a clear reason for estimates to move higher.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
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