Tuesday, October 22, 2024

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including NVIDIA Corp. (NVDA), Microsoft Corp. (MSFT) and Broadcom Inc. (AVGO), as well as a micro-cap stocks Comstock Holding Companies, Inc. (CHCI). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

NVIDIA’s shares have outperformed the Zacks Semiconductor - General industry over the year-to-date period (+190.3% vs. +135.4%). The company is benefiting from the strong growth of artificial intelligence (AI), high performance and accelerated computing. The data center end-market business is benefiting from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA Hopper and Ampere architectures. 

A surge in hyperscale demand and higher sell-ins to partners across the Gaming and ProViz end markets following the normalization of channel inventory are acting as tailwinds. Collaborations with Mercedes-Benz and Audi are likely to advance its presence in the autonomous vehicles and other automotive electronics space. 

The Zacks analyst expect NVIDIA’s revenues to witness a CAGR of 46.4% through fiscal 2025-2027. However, softening IT spending amid macroeconomic headwinds and the US-China tech war remain major concerns.

(You can read the full research report on NVIDIA here >>>)

Shares of Microsoft have gained +11.9% over the year-to-date period against the Zacks Computer - Software industry’s gain of +13.3%. The company is riding on strong growth from Intelligent Cloud and Productivity and Business Processes. Intelligent Cloud revenues are driven by growth in Azure and other cloud services. 

Productivity and Business Processes revenues continue to rise due to the strong adoption of Office 365 Commercial solutions. Microsoft 365 Consumer subscribers grew to 80.8 million in the third quarter. Continued momentum in the small and medium businesses and frontline worker offerings, as well as a rise in revenue per user, drove top-line growth. The Zacks analyst expect fiscal 2025 net sales to grow 12.8% from fiscal 2024. 

However, the office's declining commercial licensing has been a headwind due to the continued customer shift to cloud offerings. Higher operating expenses and spending on Azure enhancements amid stiff competition in the cloud space remain a concern.

(You can read the full research report on Microsoft here >>>)

Broadcom’s shares have outperformed the Zacks Electronics - Semiconductors industry over the year-to-date period (+63.0% vs. +44.3%). The company is benefiting from strong demand for its networking products. In second-quarter 2024, it witnessed strong demand for custom AI accelerators, AI networking solutions, Ethernet switching, optical lasers, thin dies, PCI Express switches and Network Interface Cards from hyperscale customers. 

Broadcom’s solutions are suitable for addressing the needs of an increasing AI workload and the growing need for fast networking in data centers. The acquisition of VMware has benefited Infrastructure software solutions. Its expanding clientele, which includes the likes of Alphabet and Meta Platforms, is noteworthy. 

AVGO’s strong partner base, including Arista Networks, Dell Technologies, Juniper and Supermicro, has been a key catalyst. AI revenues are now expected to be $12 billion for fiscal 2024.

(You can read the full research report on Broadcom here >>>)

Shares of Comstock have outperformed the Zacks Building Products - Home Builders industry over the year-to-date period (+143.9% vs. +26.8%). This microcap company with market capitalization of $106.61 million recorded strong revenue growth of 11% year over year, reaching $21.4 million in the first half of 2024. 

This growth is driven by high demand for its premium, transit-oriented properties like The Hartford and Reston Metro Plaza, with fully leased spaces attracting high-profile tenants such as Google, Rolls-Royce, and GuidePoint Security. The company’s focus on urban, commuter-friendly developments positions it well to capture long-term growth in the Washington D.C. market. 

Comstock's asset-light, debt-free model, combined with access to a $10 million credit facility, provides ample financial flexibility for future developments. Its diversified tenant base and strong occupancy rates reduce vacancy risk. However, the company faces concentration risk with heavy reliance on key developments. A structural shift toward remote work also poses challenges to its office leasing performance.

(You can read the full research report on Comstock here >>>)

Other noteworthy reports we are featuring today include Roche Holding AG (RHHBY), American Express Co. (AXP) and The Progressive Corp. (PGR).

Mark Vickery
Senior Editor

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>