Stocks to Watch After Blowout Earnings: Micron, FedEx & More
Strong quarterly results from Micron Technology MU and FedEx FDX stood out as rare bright spots in an otherwise turbulent week, as broader equity indexes retreated sharply amid surging oil prices and heightened economic uncertainty stemming from the conflict in Iran.
Neither were immune to the volatility in Friday’s trading session, but Micron and FedEx stock may serve as appealing buy-the-dip targets as they posted blowout quarterly earnings on Wednesday and Thursday, respectively.
Optimistically, there were a few other standouts that could potentially combat weaker market sentiment after impressively beating EPS expectations.
Micron’s Record-Breaking Growth Continues
Explosive demand for AI-related memory products has led to tight industry supply, allowing Micron to command higher prices and deliver stronger margins, with its stock currently boasting a Zacks Rank #1 (Strong Buy).
Reporting results for its fiscal second quarter, Micron’s Q2 sales nearly tripled year over year to a record $23.86 billion from $8.05 billion in the comparative quarter. The surge was fueled by high demand for Micron’s high-bandwidth memory (HBM) products, which are used in Nvidia’s NVDA GPUs. More importantly, Micron continued to show strong execution, with Q2 EPS at $12.20, topping expectations of $8.80 by 38.64% and skyrocketing from $1.56 per share a year ago.
Micron also produced record quarterly free cash flow of $6.9 billion and has efficiently scaled its next-generation memory production. With analysts seeing the current memory cycle as the strongest in years, Micron guided its Q3 sales at $33.5 billion, well ahead of expectations of $22.79 billion or 101% growth. Benefitting from a blazing trend of positive earnings estimate revisions, Micron is currently expected to post FY26 EPS of $36.18. More intriguing, analysts project Micron will pass $100 billion in annual sales next year, and FY27 EPS projections are at a whopping $54.78.
FedEx Fires on all Cylinders
FedEx’s results for its fiscal third quarter were exceptionally strong, beating expectations on revenue and earnings, while expanding margins in key segments, and raising its full-year outlook. This was driven by disciplined operations, strong package demand, and efficiency gains from the accelerating impact of its advanced digital solutions to help control costs and improve service quality.
FedEx stock lands a Zacks Rank #3 (Hold), but a buy rating could be on the way as earnings estimate revisions are likely to move significantly higher. To that point, FedEx’s Q3 EPS of $5.25 crushed expectations of $4.14 by 26.81% and climbed from $4.51 per share in the prior year quarter.
Making a stronger earnings revision trend a sure thing for FY26 is that FedEx boosted its full-year EPS outlook to between $19.30-$20.10. This was up from a previous FY26 EPS guidance range of $17.80-$19.00 and was ahead of Wall Street’s forecast of $18.58. Notably, the consensus among Wall Street calls for FedEx’s FY27 EPS to jump another 15% to $21.45, with it being noteworthy that the delivery services leader is also moving closer to the $100 billion in annual sales milestone.
Strong Q4 Results from China’s Leading Hotel Operator
H World Group Limited HTHT stood out in a week that also included quarterly results from Chinese e-commerce giant Alibaba BABA. Taking the spotlight on Wednesday, H World Group Limited is one of the largest hotel operators in China, operating over 12,000 hotels with an extensive reach that spans across Europe as well.
With China seeing a broad recovery in travel demand, H World Group Limited’s stock sports a Zacks Rank #1 (Strong Buy). Rapid hotel network expansion and improved performance in both its domestic and international segments were on full display, with the company excelling due to its asset-light business model, strong hotel turnover growth, and improving profitability.
Correlating with such, Q4 EPS of $0.58 impressively exceeded estimates of $0.41 by 41.46% and spiked from $0.14 per share in the prior year quarter.
In regard to its asset-light model, H World Group Limited manages and franchises hotels rather than owning the physical buildings. This approach dramatically improves profitability, speeds expansion, and reduces financial risk, serving as a major growth driver.
Honorable Mention
Sporting a Zacks Rank #1 (Strong Buy), Five Below FIVE is also worth mentioning. Although its earnings beat wasn’t as spectacular, Five Below posted Q4 EPS of $4.31 on Wednesday, topping expectations of $3.99 by 8.02%. The provider of low-priced, high-margin merchandise saw its bottom line expand from Q4 EPS of $3.48 a year ago.
#1 Semiconductor Stock to Buy (Not NVDA)
The incredible demand for data is fueling the market’s next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.
One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don’t build. It’s just beginning to enter the spotlight, which is exactly where you want to be.
See This Stock Now for Free >>
Micron Technology, Inc. (MU) : Free Stock Analysis Report
FedEx Corporation (FDX) : Free Stock Analysis Report
H World Group Limited Sponsored ADR (HTHT) : Free Stock Analysis Report
Five Below, Inc. (FIVE) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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