Beat the Market the Zacks Way: Extreme Networks, Bloom Energy, UnitedHealth in Focus

2026.06.08 12:45 (GMT+0)

Beat the Market the Zacks Way: Extreme Networks, Bloom Energy, UnitedHealth in Focus

Wall Street faced a brutal sell-off last week, with the technology sector being hit the hardest. The tech-heavy Nasdaq Composite index fell 5.1%, while the S&P 500 and the Dow Jones Industrial Average dropped by 2.84% and 0.42%, respectively. Investors reacted sharply to stronger-than-expected economic data and growing concerns that the Federal Reserve may keep interest rates higher for longer. As a result, growth and technology stocks faced increased pressure. The market's nine-week winning streak came to an end as market participants reassessed valuations and the outlook for monetary policy.

The biggest surprise came from the May employment data, with nonfarm payrolls rising by 172,000, more than double the 80,000 expected. The unemployment rate held steady at 4.3%, while job openings jumped to 7.6 million in April, the highest level since late 2024. Average hourly earnings increased 0.3% from the previous month and 3.4% from a year earlier. Private-sector hiring also improved, with ADP reporting 122,000 new jobs, signaling broader business confidence. Productivity growth slowed sharply to just 0.3% in the first quarter, while inflation continued to outpace wage growth.

Despite the weekly decline, major U.S. indexes remain positive for the year. Strong hiring, steady unemployment and growing demand for workers suggest the economy is still expanding, although rising costs and a tighter labor supply could create headwinds in the months ahead.

Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.

As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.

Here are some of our key achievements:

Extreme Networks and Aehr Test Systems Following Zacks Rank Upgrade

Shares of Extreme Networks, Inc. EXTR have gained 69.82% (versus the S&P 500’s 9.12% increase) since it was upgraded to a Zacks Rank #2 (Buy) on April 9.

Another stock, Aehr Test Systems, Inc. AEHR, which was upgraded to a Zacks Rank #2 on April 10, has returned 43% (versus the S&P 500’s 8.5% increase) since then.

Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. E mpirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

A portfolio of Zacks # 1 Rank (Strong Buy) stocks has outperformed the S&P 500 index by almost 8 percentage points this year. Through May 5, the Zacks # 1 Rank portfolio returned +13.14%, which compares to +5.19% for the S&P 500 index and +7.76% for the equal-weight version of the index in the year-to-date period.

Since its inception in 1988, this portfolio of Zacks # 1 Rank stocks has outperformed the market by 12.6 percentage points. The average annual return for this portfolio of Zacks # 1 Rank stocks since inception in 1988 was +24% through May 5, which compared to +11.5% gain for the S&P 500 index and +11.3% gain for the equal-weight version of the index.

You can see the complete list of today’s Zacks Rank #1 stocks here >>>

Check Extreme Networks’ historical EPS and Sales here>>>

Check Aehr Test Systems’ historical EPS and Sales here>>>

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Zacks Recommendation Upgrades Bloom Energy and FGI Industries

Shares of Bloom Energy Corporation BE and FGI Industries Ltd. FGI have advanced 95.3% (versus the S&P 500’s 11.9% increase) and 54.3% (versus the S&P 500’s 7.5% increase), respectively, since their Zacks Recommendation was upgraded to Outperform on April 7 and April 14.

While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.

The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.

Zacks Focus List Stocks Lam Research, Virtu Financial Shoot Up

Shares of Lam Research Corporation LRCX, which belongs to the Zacks Focus List, have gained 52.2% over the past 12 weeks. The stock was added to the FocusList on December 5, 2016. Another Focus List holding, Virtu Financial, Inc. VIRT, which was added to the portfolio on July 31, 2023, has returned 27.2% over the past 12 weeks. The S&P 500 has advanced 9.7% over this period.

The 50-stock Focus List portfolio returned +10.73% in 2026 (through the end of May) vs. +11.27% for the S&P 500 index and +9.53% for the equal-weight version of the index.

The portfolio returned +22.1% in 2025 vs. +17.9% for the S&P 500 index and +11.4% for the equal-weight version of the index.

The Zacks Focus List portfolio returned +18.41% in 2024 vs. +25.04% for the S&P 500 index and +13% for the equal-weight S&P 500 index. The portfolio had returned +29.54% in 2023 vs. +26.28% for the S&P 500 index and +13.61% for the equal-weight S&P 500 index. In 2022, the portfolio returned -15.2% vs. the S&P 500 index’s -17.96%.

Through May 31, 2026, the portfolio’s rolling returns on a one-year, three-year, five-year, ten-year basis, and since 2004 have been +31.42% (vs. +29.78% for the S&P 500 index), +24.26% (vs. +23.62%), +12.94% (vs. +14.15%), +16.40% (vs. +15.64%) and +12.42% vs. (+11.03%), respectively.

Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>

Zacks ECAP Stocks Monster Beverage and FactSet Research Make Significant Gains

Monster Beverage Corporation MNST, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 18.4% over the past 12 weeks. FactSet Research Systems Inc. FDS has followed Monster Beverage with 13.2% returns.

The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, returned -7.14% in 2026 Q1 vs. -4.33% for the S&P 500 index.

For 2025, the portfolio returned -1.67% vs. +17.9% gain for the S&P 500 index. For the year 2024, the portfolio returned +16.26% vs. +24.89% for the S&P 500 index (SPY ETF). In 2023, the portfolio returned +12.17% vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.

With little to no turnover and annual rebalance periodicity, ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.

The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.

Zacks ECDP Stocks UnitedHealth and American Tower Outperform Peers

UnitedHealth Group Incorporated UNH, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 39.4% over the past 12 weeks. Another ECDP stock, American Tower Corporation AMT, has also climbed 2.9% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.

Check UnitedHealth's dividend history here>>>

Check American Tower‘s dividend history here>>>

With an extremely low beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps to significantly mitigate risk.

The Zacks Earnings Certain Dividend Portfolio (ECDP) returned -1.43% in 2026 Q1 vs. -4.33% for the S&P 500 index and +2.3% for the Dividend Aristocrats ETF (NOBL).

The portfolio returned -0.6% in 2025 vs. +6.8% gain for the Dividend Aristocrat ETF. For the full year 2024, the portfolio returned +6.95% vs. +24.89% for the S&P 500 index and +6.72% for NOBL. The portfolio returned -0.9% in 2023 vs. +26.28% for the S&P 500 index and +8.11% for NOBL. The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.

Click here to access this portfolio on Zacks Advisor Tools.

Zacks Top 10 Stock Monolithic Power Systems Delivers Solid Returns

Monolithic Power Systems MPWR, from the Zacks Top 10 Stocks for 2026, has jumped 58.2% since the list was released on January 5, 2026, compared with the S&P 500 index’s 8% increase during this period.

The Top 10 portfolio retuned +19.72% in 2026 (through May 31) vs. +11.27% for the S&P 500 index and +9.53% for the equal-weight version of the index.

The Top 10 portfolio returned +22.6% in 2025 vs. +17.9% for the S&P 500 index and +11.4% for the equal-weight version of the index.

The Top 10 portfolio returned +62.98% in 2024, vs. +25.04% for the S&P 500 index and +13% for the equal-weight version of the index. The portfolio had returned +25.15% in 2023 vs. +26.28% for the S&P 500 index.

Through the end of May 2026, the Top 10 portfolio has produced a cumulative return of +3,001.9% since 2012 vs. +636.2.3% for the S&P 500 index and +451.2% for the equal-weight version of the index. The portfolio has produced an average annual return of +26.6% in the period 2012 through May 31, 2026 vs. +13.7% for the S&P 500 index and +11.03% for the equal-weight version of the index.

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This article originally published on Zacks Investment Research (zacks.com).

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