For Immediate Release
Chicago, IL – April 13, 2026 – Zacks Equity Research shares Broadcom AVGO as the Bull of the Day and Duolingo DUOL as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Palantir Technologies Inc. PLTR.
Here is a synopsis of all three stocks.
Bull of the Day:
Broadcom, a current Zacks Rank #1 (Strong Buy), provides market-Leading semiconductor and software technologies for mission critical infrastructure. The earnings outlook for the stock has become bright across the board over recent months.
In addition, the stock also resides in the Zacks Electronics – Semiconductors industry, which is currently ranked in the top 38% of all Zacks Industries.
Broadcom Benefits from AI Buildout
Reflecting a key player in the AI infrastructure buildout, Broadcom provides custom AI chips and high-speed networking solutions needed to connect massive GPU clusters. Its growth outlook remains bright amid the favorable environment.
Importantly, AI revenue of $8.4 billion throughout its latest period grew 106% year-over-year, above its forecast and underpinned by strong demand for custom AI accelerators and AI networking.
Shares have surged as of late after struggling to start 2026, now outperforming both the S&P 500 and the Zacks Technology sector. Favorable EPS revisions over recent days have helped lead the strong action, with sales revisions for its current and next fiscal year displaying highly bullish action as well.
The brightening outlook helps support the stock’s near-term momentum, with the valuation picture also not overly stretched. Shares currently trade at a 25.9X forward 12-month earnings multiple, with the current 0.5X PEG ratio nowhere near the 1.2X five-year median and reflecting the lowest level we’ve seen in years.
Broadcom’s strong cash generation has also been a big reason investors have loved the stock throughout its history, enabling it to offer a strong blend of high-growth tech exposure and consistently growing dividend payouts. The company currently sports a 13.1% five-year annualized dividend growth rate, with the chart below illustrating its dividends paid on a quarterly basis over the last decade.
Bottom Line
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The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
Broadcom would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
Duolingo provides a mobile language learning platform. The stock has fallen into a Zacks Rank #5 (Strong Sell) on the back of falling EPS revisions.
Duolingo Shares Fall
Duolingo shares have plunged from their steep 2025 highs, down more than 80%. The adverse price action has remained throughout the entirety of 2026 so far, losing roughly 46% and seeing continued pressure following the release of its latest set of quarterly results.
The company is in a somewhat transitional phase, stating in its latest quarterly release that it’s intentionally prioritizing user growth and its free learners' experience to gain more exposure through word of mouth. The result is expected to impact its near-term financial growth, helping explain the poor share reaction post-earnings we saw in the above-mentioned release.
As shown below, the growth picture for its current FY26 reflects a significant falloff relative to recent years, though things do look to rebound modestly in FY27, particularly so on the earnings front.
Decelerating growth expectations in former high-flyers like DUOL typically lead to highly volatile share-price reactions as investors price in a new picture relative to what was originally being delivered.
Bottom Line
Negative earnings estimate revisions stemming from a growth cooldown paint a challenging picture for the company’s shares in the near term.
Duolingo is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.
For those seeking strong stocks, the best idea would be to focus on stocks with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.
Additional content:
Broadcom vs. Palantir: One AI Stock Is the Clear Buy
Both Broadcom Inc. and Palantir Technologies Inc. have ridden the artificial intelligence (AI) wave, gaining 95% and 47%, respectively, over the past year. However, if investors have missed their rally and are considering an entry point, the key question is: which of these two AI stocks is the better buy today? Let us, thus, see in detail their performance and which one presents a more compelling buying opportunity.
Key Bullish Drivers for Broadcom
Driven by an increase in demand for custom AI accelerators and AI networking, Broadcom’s AI business has strengthened lately. In the fiscal first quarter of 2026, Broadcom’s AI revenues reached $8.4 billion, up an impressive 106% year over year, well above expectations, according to investors.broadcom.com.
The consolidated revenues climbed to a record $19.3 billion, up 29% compared to the same period a year ago. This performance highlighted that Broadcom is a leading infrastructure player in the AI boom, showcasing its capability to deliver substantial revenue growth despite being a large-cap company.
Thanks to accelerating AI demand, Broadcom expects revenues of around $22 billion for the fiscal second quarter of 2026, with AI semiconductor revenues totaling approximately $10.7 billion. The company anticipates an EBITDA margin of around 68% of projected revenues, highlighting stronger operational efficiency and solid pricing power. Adjusted EBITDA of $13.1 billion in the fiscal first quarter already accounted for 68% of revenues.
Broadcom also maintains a strong cash flow position, providing it with ample resources to invest in growth initiatives and reduce debts. Broadcom has generated $8.01 billion in free cash flow in the fiscal first quarter, representing 41% of its revenues.
Bullish Case for Palantir
The demand for Palantir’s Artificial Intelligence Platform (AIP) has increased significantly over time among both the U.S. government and commercial clients. This is because AIP enables seamless integration of AI and large language models into highly complex data infrastructures.
Thanks to the popularity of AIP, Palantir’s government segment revenues climbed 66% year over year and 17% quarter over quarter to $570 million in the fourth quarter of 2025, while revenues from the U.S. commercial segment jumped 137% year over year and 28% sequentially to $507 million, according to investors.palantir.com. Total revenues for the quarter reached $1.4 billion, up 70% year over year and 19% quarter over quarter.
Palantir posted GAAP net income of $609 million, reflecting a 43% margin, and further expects profitability to improve throughout 2026. For full-year 2026, Palantir anticipates revenues of $7.182-$7.198 billion, up from $4.475 billion in 2025. The revenue growth expectations seem achievable since the U.S. commercial client’s remaining deal value reached $4.38 billion in the fourth quarter of 2025, up 145% from the same period a year ago and 21% sequentially.
In the fourth quarter of 2025, Palantir’s adjusted free cash flow came in at $791 million, representing a margin of 56%. This incredibly strong margin will help Palantir in funding growth initiatives and reducing debt. Moreover, Palantir’s Gotham and Foundry platforms face limited competition, which helps in generating predictable cash flows over time.
Broadcom or Palantir: Which AI Stock Is a Clear Buy Right Now?
Broadcom is making the most of the AI wave, delivering strong revenue growth, high margins, and solid cash generation driven by an increase in demand for AI infrastructure. Palantir, meanwhile, is seeing rapid growth as its AIP drives demand across government and commercial clients, boosting revenues, profitability and cash flow.
However, Palantir still relies heavily on government spending, which makes its growth exposed to any abrupt policy shifts or delays. On the other hand, Broadcom benefits from a diversified revenue base across AI infrastructure, semiconductor, networking and software segments, supported by a strong customer portfolio.
Palantir’s lofty valuation remains another major concern, leaving the stock highly sensitive to negative sentiment and potential sharp declines if the broader market corrects. Notably, Michael Burry has cautioned that Palantir may be in a bubble and could face intense competition in the enterprise AI from Anthropic. Palantir seems significantly overvalued compared to Broadcom, with a forward price-to-earnings (P/E) ratio of 99.55 compared to Broadcom’s 31.73.
Finally, Broadcom remains more efficient in generating profits than Palantir. This is because Broadcom’s return on equity (ROE) of 47.5% exceeds Palantir’s ROE of 29.8%.
Therefore, in this matchup, Broadcom stands out as the better buy at this time. Broadcom has a Zacks Rank #1 (Strong Buy), while Palantir has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.
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