For Immediate Release
Chicago, IL – October 21, 2026 – Zacks Equity Research shares Vicor VICR as the Bull of the Day and NIKE NKE as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Walmart Inc. WMT, Target Corp. TGT and Costco Wholesale Corp. COST.
Here is a synopsis of all five stocks:
Bull of the Day:
Throughout the AI boom, we have seen a steady stream of niche technology companies emerge as critical players in the infrastructure buildout. What began with GPUs and custom semiconductors has expanded into memory, optical networking, advanced packaging and a growing list of other industries.
While there are certainly still opportunities across those segments, I am particularly interested in identifying the next wave of beneficiaries. One emerging opportunity is in power delivery, as AI data centers are beginning to fundamentally rethink how electricity gets from the grid to increasingly powerful processors.
The problem is straightforward. AI systems are becoming so powerful and energy-intensive that traditional data center electrical infrastructure is struggling to keep up. Some next-generation server racks are expected to require as much as one megawatt of electricity, creating enormous challenges in efficiently delivering that power without wasting energy, generating excess heat or consuming valuable space.
To address these challenges, the industry is moving toward a new 800-volt direct current (DC) power architecture, which allows electricity to travel through data centers more efficiently and with fewer conversion steps.
Vicor() develops highly efficient power conversion modules that help deliver electricity at the precise voltage required by advanced processors. Its technology becomes increasingly valuable as AI chips demand more power in less space, positioning the company to benefit from the industry's shift toward higher-density computing.
The company also carries a Zacks Rank #1 (Strong Buy), supported by an increasingly bullish earnings outlook.
Adding to the investment case, Vicor reported outstanding quarterly results Tuesday morning, with revenue surging nearly 79% year over year and profitability improving dramatically. Shares rallied following the announcement, reinforcing the company's accelerating fundamental momentum.
Despite a powerful rally earlier this year, VICR has since undergone a sharp correction and remains roughly 46% below its previous highs. With an emerging industry tailwind, exceptional growth forecasts and a top Zacks Rank, Vicor stands out as a compelling opportunity in the next phase of the AI infrastructure buildout.
Vicor Shares Rally Following Strong Earnings Results
Vicor delivered an exceptional third-quarter earnings report Tuesday morning, with accelerating revenue growth, expanding profitability and surging demand for its advanced power technologies.
Revenue climbed 78.5% year over year to $197.1 million, representing a 37.5% sequential increase. Earnings per share more than doubled from $0.63 a year ago to $1.33, while gross margins expanded to 68.3%, compared with 57.5% in the year-ago quarter.
Another particularly encouraging development was the company's rapidly expanding order backlog, which reached $406 million, up 166% from $153 million a year earlier. This provides greater visibility into future revenue and reinforces the strength of underlying demand.
Vicor is also benefiting from a growing licensing business, which allows the company to collect royalties on its patented power delivery technologies. Royalty revenue reached $66.6 million during the quarter, more than tripling from a year earlier. This represents an attractive additional revenue stream, although licensing activity can create considerable variability in quarterly results.
The outlook is equally impressive. Consensus forecasts call for revenue growth of 41% this year and another 61% next year. Earnings per share are projected to climb 56.3% this year, followed by another 64.1% increase next year.
These exceptional growth forecasts, alongside favorable earnings estimate revisions, have earned Vicor a Zacks Rank #1 (Strong Buy).
Valuation is certainly a consideration, with shares trading at 46.8x forward earnings. That is a substantial premium, but given the company's accelerating growth, expanding margins and exposure to a potentially transformative industry trend, the multiple is not necessarily unreasonable.
Should Investors Buy Shares in VICR?
Vicor offers exposure to one of the more interesting emerging opportunities within the AI infrastructure boom. As computing power continues to increase, the ability to deliver electricity efficiently is becoming a critical challenge, and Vicor is well positioned to benefit.
The company's latest earnings results suggest that this opportunity is already translating into meaningful business growth. Surging revenue, expanding margins, a rapidly growing backlog and bullish earnings revisions all support the investment case.
Of course, the stock is not without risk. Its premium valuation leaves little room for disappointment, while competition, customer adoption and the timing of next-generation power architectures could all influence future results. The stock's sharp correction from its highs also illustrates how volatile expectations can become.
Nevertheless, I find the combination of an emerging secular growth catalyst, exceptional earnings momentum and a top Zacks Rank particularly compelling. For investors comfortable with the risks of a high-growth technology stock, VICR looks like an attractive way to participate in the next phase of the AI infrastructure buildout.
Bear of the Day:
A disproportionate number of my Bear of the Day writeups feature apparel companies, and for good reason. It is an exceptionally difficult industry in which to maintain a lasting competitive advantage. And when a brand as large, established and globally recognized as NIKE struggles to maintain its position, it underscores just how challenging the business can be.
Like many other apparel companies eventual deal with, NIKE is grappling with a prolonged decline in consumer appeal. The rise of social media and increasingly powerful digital marketing platforms has dramatically accelerated the pace of fashion trends, lowered barriers to entry and allowed smaller, more agile competitors to capture market share. Even the industry's most iconic brands are no longer insulated from these pressures.
NIKE shares have been in a steep decline for the past five years, effectively erasing the gains of the preceding five. Revenue has stagnated, earnings have collapsed, and the premium valuation the stock continues to command is increasingly difficult to justify given the company's diminished competitive positioning.
Making matters worse, analysts continue to revise earnings estimates lower, suggesting that Wall Street is still adjusting to the deterioration in NIKE's underlying business. Until those trends begin to reverse, there is little reason to expect a sustained recovery in the stock.
NIKE Earnings Estimates Collapse Along with Shares
Analysts have been steadily lowering their earnings outlook for NIKE, with downward revisions going back to 2023 and continuing as recently as the past seven days. The cuts have been unanimous across the periods tracked, with current year earnings estimates falling 24.1% and next year estimates declining 26.1%.
The growth outlook is equally uninspiring. Revenue is projected to contract 7.9% this year before recovering just 1.6% next year. Meanwhile, earnings per share are expected to decline another 16.5% this year, followed by a 30.8% rebound next year.
While that earnings recovery may look encouraging on the surface, it comes off a significantly depressed base and follows several years of deteriorating profitability. Moreover, the continued downward revisions suggest that even these reduced expectations may prove too optimistic.
Despite these challenges, NIKE still trades at 28.1x forward earnings, a substantial premium for a business facing declining sales, shrinking profitability and persistent competitive pressures. Admittedly, the collapse in earnings has contributed to the elevated multiple, but that hardly makes the valuation more attractive.
Should Investors Avoid NKE Shares?
NIKE shares have recently shown signs of stabilizing after a prolonged decline, but it is difficult to make a compelling investment case at current levels.
The brand remains globally recognized, and a successful turnaround could eventually create an attractive opportunity. However, there is little evidence that the company's fundamental deterioration has run its course. Sales remain under pressure, earnings estimates continue to fall, and the valuation leaves limited room for further disappointment.
For now, any rebound in the stock looks more like a potential relief rally than the beginning of a sustainable recovery. Until earnings revisions turn positive and the company demonstrates renewed growth, investors are likely better served looking elsewhere.
Additional content:
Walmart, Target and Costco Win Over Digital Shoppers with Speed
Digital commerce is becoming an increasingly important growth driver for major U.S. retailers as consumers prioritize convenience, faster fulfillment and seamless shopping experiences. Walmart Inc., Target Corp. and Costco Wholesale Corp. are strengthening their digital capabilities through store-based fulfillment, delivery partnerships, marketplace expansion and technology investments.
Walmart: Accelerating Digital Growth Through Delivery
Walmart continues to strengthen its omnichannel ecosystem through faster delivery, marketplace expansion and complementary digital businesses. In second-quarter fiscal 2027, global e-commerce sales increased 23%, accounting for 24% of total net sales. Walmart U.S. e-commerce sales climbed 24%, while international e-commerce and Sam's Club U.S. recorded growth of 19% and 26%, respectively.
Store-fulfilled pickup and delivery remained important growth catalysts. Walmart's U.S. marketplace grew 52%, while fast delivery increased 48%. The retailer expanded sub-30-minute delivery services to 38 U.S. markets, improving accessibility and convenience. Meanwhile, global advertising revenues increased 38%, highlighting opportunities to monetize expanding digital engagement. Management emphasized that marketplace, advertising and membership capabilities are strengthening the broader business model and improving its economics.
Target: Expanding Digital Sales With AI and Convenience
Target is advancing its digital strategy by combining same-day fulfillment capabilities with personalized shopping experiences. In second-quarter fiscal 2026, comparable digital sales increased 8.7%, outperforming comparable store sales growth of 2.7%. Same-day delivery expanded more than 25%, underscoring consumers' growing preference for convenient fulfillment options.
Target is also expanding its digital ecosystem through Target Circle 360, Target+ marketplace and Roundel advertising. These businesses contributed to non-merchandise sales growth of 20.1%. The company is investing in artificial intelligence and partnerships with OpenAI and Google Gemini to enhance product discovery and personalization. Management noted that digital traffic originating from external AI platforms is growing more than 3.5 times the industry rate, suggesting opportunities for deeper digital engagement.
Costco: Boosting Digital Sales Through Partnerships
Costco is accelerating digitally enabled sales while maintaining its membership-focused retail model. Fourth-quarter fiscal 2026 digitally enabled comparable sales increased 19.5%, or 19.8% excluding foreign exchange effects. E-commerce website and app traffic rose 30%, reflecting stronger digital engagement.
Costco is expanding delivery accessibility through partnerships with Instacart, Uber Eats and DoorDash. Average delivery times across these platforms are under an hour. Management indicated that digitally enabled sales exceeded $33 billion in fiscal 2026, growing more than 20%. Momentum continued into September, with digitally enabled sales rising 19%, demonstrating sustained demand for convenient purchasing channels.
Final Words
Walmart, Target and Costco demonstrate how digital investments can complement established retail operations. Faster fulfillment, improved personalization and expanded digital access offer opportunities for incremental sales and customer engagement.
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