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Celestica and Ethan Allen have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – May 5, 2026 – Zacks Equity Research shares Celestica Inc. (CLS - Free Report) as the Bull of the Day and Ethan Allen Interiors Inc. (ETD - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alphabet (GOOGL - Free Report) , NVIDIA (NVDA - Free Report) and Broadcom (AVGO - Free Report) .
Celestica Inc. is an AI data center infrastructure stock that’s projected to more than double its earnings and revenue between 2025 and 2027—after doubling both its top and bottom lines between 2021 and 2025.
The electronics manufacturing services powerhouse’s earnings outlook surged again following its Q1 2026 earnings release on April 27, extending its run of upward EPS revisions and landing Celestica its Zacks Rank #1 (Strong Buy). CLS raised its 2026 guidance as the AI spending boom heats up.
Celestica is working directly with multiple AI hyperscalers, making it a pure-play investment in the ongoing AI buildout, which will soon be measured in trillions of dollars in annual capex.
Celestica is in the middle of a massive multi-year upgrade cycle for AI data centers, with customers flocking to its existing, market-leading 800G solutions and its next-generation 1.6T offerings, which mark double the switch capacity.
Despite soaring to new all-time highs in 2026 and crushing Nvidia and countless other AI giants over the last several years, Celestica’s earnings growth outlook makes the stock look somewhat cheap on the valuation front.
CLS stock also quickly found support at a key technical range after some post-earnings profit-taking.
Best Tech Stocks to Buy Now and Hold: Celestica
Celestica is an electronics manufacturing services standout. CLS specializes in designing, engineering, and manufacturing products for companies across AI infrastructure, cloud computing, semiconductor capital equipment, and much more.
CLS operates two reportable units: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Celestica’s services across these segments include Design and Engineering, Manufacturing Services, Logistics and Fulfillment, Precision Machining, Product Licensing Services, and beyond.
The company’s product offerings span storage, compute, networking, and software. Celestica’s AI data center-focused business is booming as demand soars across its servers and storage unit.
Celestica is in the middle of a massive multi-year upgrade cycle for AI data centers.
Celestica expects its business to keep growing faster through the rest of 2026. The firm is ramping up production of 800G networking equipment for AI data center customers.
On top of that, CLS said it will begin building even more advanced 1.6T equipment for two AI Hyperscalers.
The firm, back in October, announced its “new family of 1.6TbE data center switches to power AI/ML clusters.”
Celestica’s newest tech represents the “doubling of switch capacity compared to Celestica’s existing, market-leading 800G solutions…” The new cutting-edge offerings provide a “comprehensive set of AI routing features and interconnect options, designed to meet the demands of AI clusters.”
The AI Tech Stock’s Soaring Earnings and Revenue Growth
Celestica, which went public in the late 1990s, supercharged its growth over the last several years as it thrives in the AI data center boom.
It averaged 22% revenue growth between FY22-FY25, more than doubling its revenue from $5.64 billion in 2021 to $12.39 billion in 2025.
The AI data center infrastructure company posted even more staggering GAAP earnings growth, skyrocketing from $0.83 a share in 2021 to $7.16 a share in 2025.
The company posted another beat and raise quarter on April 27. Celestica’s consensus FY26 earnings estimate surged 12% since then, with its FY27 estimate 14% higher, helping CLS earn its Zacks Rank #1 (Strong Buy).
Celestica’s new, higher-speed solutions are projected to drive strong growth in 2027 as it wins more business. The AI tech infrastructure firm said that its enterprise AI/ML (artificial intelligence and machine learning) compute segment is projected to “ramp through 2026,” with CLS expecting “strong momentum continuing into 2027, supported by next-generation programs.”
On the AI hyperscaler front, its strength is fueled by a strong demand outlook into 2027.
AI remains the driver of another record year of capex spending in 2026. Hyperscalers are projected to spend $600 billion to $800 billion, up from roughly $400 billion in 2025. Peaking ahead, new reports predict that AI hyperscaler capex will hit $1.1 trillion in 2027.
Celestica is projected to grow its revenue by 54% in 2026 to reach $19 billion and then post 41% sales expansion next year to hit $26.90 billion—easily doubling 2025’s $12.39 billion.
The company has also reached a profitability pivot point after a decade-plus of stagnation. Its adjusted earnings are set to soar 63% in 2026 and another 45% next year, more than doubling from $6.05 in 2025 to $14.33 in 2027.
Plus, its most accurate estimates came in above the already improved consensus to match Celestica’s own adjusted EPS (non-GAAP) guidance of $10.15 a share in 2026.
The chart above highlights Celestica’s longer-term AI-boosted earnings outlook.
Buy Soaring CLS Stock for Value and Upside
Celestica stock soared ~5,100% in the past five years, crushing the Zacks Tech sector’s 108%, its highly-ranked Electronics - Manufacturing Services industry’s 745%, and Nvidia’s (NVDA - Free Report) 1,300%.
CLS has ripped 355% higher in the last 12 months, blowing away Nvidia’s 75% and Tech’s 52%.
The AI data center stock’s run snapped an extended period of underperformance that helped it skyrocket beyond its previous 2000 peaks into a new trading range.
CLS stock is trading right near its new all-time highs after it quickly found buyers at its 2025 highs following a short-lived post-earnings selloff.
Celestica’s huge earnings growth outlook helps make it look like a value play right now compared to where it’s been in recent years. This is all the more impressive since it’s trading right near its all-time highs in terms of price.
It’s trading at a 31% discount to its recent highs at 39.2X forward 12-month earnings and nearly in-line with its median.
Better still, Celestica trades at a 28% discount to the Tech sector with a price/earnings-to-growth (PEG) ratio of 0.87.
Ethan Allen Interiors Inc. stock tanked after it reported its third-quarter fiscal 2026 financial results on April 29.
The home furnishings retailer provided disappointing earnings guidance once again, which helps it land a Zacks Rank #5 (Strong Sell). Ethan Allen Interiors stock is being hit by multiple headwinds, including broader macroeconomic uncertainty.
Why Ethan Allen Interiors Stock is a Zacks Rank #5 (Strong Sell)
Ethan Allen is a furniture powerhouse and a leading interior design company.
In its own words, ETD is a “leading interior design destination combining state-of-the-art technology with personal service.”
The company boasts that it manufactures about 75% of its custom-crafted furniture in its own North American manufacturing facilities.
ETD’s revenue and earnings have faded after a Covid-based boom. Its earnings outlook has dropped over the last several years as it deals with a challenging environment highlighted by inflation, tariffs, and Covid-era pull forward in furniture shopping, and more.
Ethan Allen provided another disappointing outlook when it reported its Q3 fiscal 2026 results on April 29. Its Q4 earnings estimate tanked 17% since then, with its FY26 consensus 5% lower and its 2027 outlook down 9%. These recent negative revisions earn the stock a Zacks Rank #5 (Strong Sell).
ETD’s most accurate estimate also came in below consensus as it struggles to navigate a tough operating environment. The firm’s Q3 results were negatively impacted by a “reduction in business with the U.S. State Department, lower international sales and sluggish demand from a challenging environment for home furnishings, which included weather disruptions and macroeconomic uncertainty.”
Ethan Allen is part of the Zacks Retail - Home Furnishings industry that ranks in the bottom 12% of over 240 Zacks industries.
It is also hard to predict when things might start to turn around significantly for Ethan Allen and the wider home furniture business. This backdrop might make investors want to stay away from ETD and the broader industry.
Additional content:
3 Semi Stocks Poised to Gain on Google's $190B AI Buildout
The semiconductor sector has emerged as the primary engine of equity market strength in the first five months of 2026, fueled by an unrelenting surge in artificial intelligence (AI) investment from major cloud platforms. Year-to-date gains have been exceptional, with the iShares Semiconductor ETF (SOXX) rising 54.7%, underscoring the market’s conviction that semiconductors are the backbone of the global AI infrastructure build-out.
The Philadelphia Semiconductor Index reached its highest quote ever on April 24, 2026. This powerful momentum reflects sustained demand for advanced computing capabilities, validated by strong earnings across the industry.
Alphabet — the parent of Google — reported its first-quarter 2026 results and used the announcement to dramatically reaffirm its long-term commitment to AI infrastructure. The company updated its 2026 capital expenditure guidance range to $180 billion to $190 billion, up from its previous estimate of $175 billion to $185 billion. This places Google's 2026 spending plan among the largest single-year capital programs in corporate history, dedicated almost exclusively to AI-related infrastructure, including servers, data centers and networking equipment.
The company expects 2027 capex to "significantly increase" compared to 2026, signaling that Google views AI compute capacity as a structural priority extending well beyond the current cycle. The aggressive plan is supported by an extraordinary backlog. Cloud revenues soared 63% with a backlog of $460 billion, nearly double where it was last quarter, because of demand for AI infrastructure. Capital expenditure for the quarter alone hit $35.67 billion.
Google's spending is concentrated in three areas: custom Tensor Processing Units (TPUs) co-designed with U.S. semiconductor partners, third-party AI accelerators sourced from established chip vendors, and the supporting infrastructure of memory, networking silicon, advanced packaging, and rack-level hardware required to bring AI factories online at scale. This three-pronged approach creates direct revenue pathways for several U.S.-listed semiconductor companies, including NVIDIA and Broadcom that supply the silicon, manufacture the wafers, or co-design the custom accelerators powering Google's AI ambitions.
Semiconductors Lead Market Rally as AI Spending Surges
The need for high-performance AI chips has accelerated sharply, driven by hyperscalers expanding data center capacity and deploying next-generation systems at scale. However, supply constraints — particularly in advanced packaging technologies such as CoWoS offered by Taiwan Semiconductor — have introduced a critical bottleneck. Reportedly, Google scaled back its Tensor Processing Unit production targets due to these limitations, highlighting how foundry capacity has become a strategic advantage for leading players.
Collaboration across the semiconductor ecosystem has also intensified, strengthening the AI supply chain. NVIDIA continues to push innovation with its Vera Rubin platform, while Google Cloud has moved quickly to adopt next-generation systems. Meanwhile, Broadcom has emerged as a key partner in custom AI silicon, reporting strong growth in its AI chip segment and projecting substantial revenue expansion in the coming years. Its deepening partnership with Google, including long-term involvement in Tensor Processing Unit development, highlights the strategic alignment between chip designers and hyperscalers.
Further reinforcing this trend, Alphabet, Microsoft, Amazon and Meta Platforms have collectively increased capital expenditure expectations, with total projected spending approaching $725 billion. Unlike previous technology cycles, this wave of investment is increasingly supported by contracted cloud revenues, reducing uncertainty around demand.
Against this backdrop, companies closely tied to AI infrastructure remain strategically positioned to benefit from sustained AI-driven growth.
Broadcom: Powering Google’s Custom AI Silicon Expansion
Broadcom holds perhaps the most direct exposure to Google's custom-silicon strategy. This Zacks Rank #1 (Strong Buy) company is the lead design partner for Google's seventh-generation Ironwood TPU and has secured an extended partnership through 2031 covering future generations, including TPU v8t (training) and v8i (inference). Broadcom contributes its proprietary 9.6 Tbps SerDes interconnects, ASIC implementation expertise, and high-speed networking fabric.
For first-quarter fiscal 2026 ended Feb. 1, 2026, Broadcom reported revenues of $19,311 million, up 29% from the prior-year period. First-quarter AI revenues of $8.4 billion grew 106% year over year, driven by robust demand for custom AI accelerators and AI networking. Adjusted EBITDA increased 30% year over year to a record $13.1 billion, representing 68% of revenues. Second-quarter fiscal 2026 revenue guidance of approximately $22 billion implies an increase of 47% year over year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AVGO’s fiscal 2026 earnings is pegged at $11.45 per share, up 0.8% over the past 30 days, suggesting 67.9% growth from the figure reported in fiscal 2025.
NVIDIA: Driving Google Cloud’s Next-Gen AI Infrastructure
NVIDIA remains a direct beneficiary of Google's massive AI buildout through its Blackwell and Rubin platforms now deployed across Google Cloud's global data centers. Google Cloud rolled out A4 VMs, built on NVIDIA's HGX B200 GPUs, offering developers significantly faster model training and smoother deployment, with A4X VMs based on the GB200 NVL72 and announced plans to be among the first cloud providers to deploy NVIDIA Vera Rubin NVL72 rack-scale systems in the second half of 2026.
For the fourth quarter ended Jan. 25, 2026, NVIDIA reported revenues of $68.1 billion, up 20% from the previous quarter and 73% from a year ago. For fiscal 2026, revenues were $215.9 billion, up 65% from a year ago. Fourth-quarter data center revenues reached a record $62.3 billion, up 75% year over year. This Zacks Rank #2 (Buy) company guided first-quarter fiscal 2027 revenues at $78 billion, plus or minus 2%.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 69.18% and 34.32%, respectively.
TSM: The Foundry Backbone of Google’s AI Chip Ecosystem
Taiwan Semiconductor, the world's largest contract chipmaker, manufactures the vast majority of advanced AI accelerators powering Google's expanding global data centers. TSM fabricates Google's TPUs as well as NVIDIA's Blackwell and forthcoming Rubin GPUs on its leading-edge nodes, making it the single most indispensable foundry layer of Google's $190 billion 2026 capex program.
For first-quarter 2026, TSM reported revenues of $35.90 billion, which increased 40.6% year over year and 6.4% from the previous quarter in U.S. dollars. Gross margin for the quarter was 66.2%, and operating margin was 58.1%. High-performance computing accounted for 61% of revenues. The company guided second-quarter 2026 revenues to be between $39 billion and $40.2 billion, implying roughly 32% year-over-year growth at the midpoint, and raised its full-year 2026 U.S.-dollar revenue growth guidance to above 30%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 74% of total wafer revenues.
The Zacks Consensus Estimate for this Zacks Rank #3 (Hold) company’s 2026 and 2027 earnings implies a year-over-year increase of 43.1% and 24.49%, respectively.
Google's $180-$190 billion 2026 capex commitment cements AI infrastructure as a multi-year structural growth engine. NVIDIA, TSM and Broadcom each occupy distinct, indispensable positions within Google's AI hardware supply chain. With contracted cloud revenues underpinning visibility, all three names appear well-positioned to capture a meaningful share of this transformational opportunity ahead.
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Celestica and Ethan Allen have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – May 5, 2026 – Zacks Equity Research shares Celestica Inc. (CLS - Free Report) as the Bull of the Day and Ethan Allen Interiors Inc. (ETD - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alphabet (GOOGL - Free Report) , NVIDIA (NVDA - Free Report) and Broadcom (AVGO - Free Report) .
Here is a synopsis of all five stocks.
Bull of the Day:
Celestica Inc. is an AI data center infrastructure stock that’s projected to more than double its earnings and revenue between 2025 and 2027—after doubling both its top and bottom lines between 2021 and 2025.
The electronics manufacturing services powerhouse’s earnings outlook surged again following its Q1 2026 earnings release on April 27, extending its run of upward EPS revisions and landing Celestica its Zacks Rank #1 (Strong Buy). CLS raised its 2026 guidance as the AI spending boom heats up.
Celestica is working directly with multiple AI hyperscalers, making it a pure-play investment in the ongoing AI buildout, which will soon be measured in trillions of dollars in annual capex.
Celestica is in the middle of a massive multi-year upgrade cycle for AI data centers, with customers flocking to its existing, market-leading 800G solutions and its next-generation 1.6T offerings, which mark double the switch capacity.
Despite soaring to new all-time highs in 2026 and crushing Nvidia and countless other AI giants over the last several years, Celestica’s earnings growth outlook makes the stock look somewhat cheap on the valuation front.
CLS stock also quickly found support at a key technical range after some post-earnings profit-taking.
Best Tech Stocks to Buy Now and Hold: Celestica
Celestica is an electronics manufacturing services standout. CLS specializes in designing, engineering, and manufacturing products for companies across AI infrastructure, cloud computing, semiconductor capital equipment, and much more.
CLS operates two reportable units: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Celestica’s services across these segments include Design and Engineering, Manufacturing Services, Logistics and Fulfillment, Precision Machining, Product Licensing Services, and beyond.
The company’s product offerings span storage, compute, networking, and software. Celestica’s AI data center-focused business is booming as demand soars across its servers and storage unit.
Celestica is in the middle of a massive multi-year upgrade cycle for AI data centers.
Celestica expects its business to keep growing faster through the rest of 2026. The firm is ramping up production of 800G networking equipment for AI data center customers.
On top of that, CLS said it will begin building even more advanced 1.6T equipment for two AI Hyperscalers.
The firm, back in October, announced its “new family of 1.6TbE data center switches to power AI/ML clusters.”
Celestica’s newest tech represents the “doubling of switch capacity compared to Celestica’s existing, market-leading 800G solutions…” The new cutting-edge offerings provide a “comprehensive set of AI routing features and interconnect options, designed to meet the demands of AI clusters.”
The AI Tech Stock’s Soaring Earnings and Revenue Growth
Celestica, which went public in the late 1990s, supercharged its growth over the last several years as it thrives in the AI data center boom.
It averaged 22% revenue growth between FY22-FY25, more than doubling its revenue from $5.64 billion in 2021 to $12.39 billion in 2025.
The AI data center infrastructure company posted even more staggering GAAP earnings growth, skyrocketing from $0.83 a share in 2021 to $7.16 a share in 2025.
The company posted another beat and raise quarter on April 27. Celestica’s consensus FY26 earnings estimate surged 12% since then, with its FY27 estimate 14% higher, helping CLS earn its Zacks Rank #1 (Strong Buy).
Celestica’s new, higher-speed solutions are projected to drive strong growth in 2027 as it wins more business. The AI tech infrastructure firm said that its enterprise AI/ML (artificial intelligence and machine learning) compute segment is projected to “ramp through 2026,” with CLS expecting “strong momentum continuing into 2027, supported by next-generation programs.”
On the AI hyperscaler front, its strength is fueled by a strong demand outlook into 2027.
AI remains the driver of another record year of capex spending in 2026. Hyperscalers are projected to spend $600 billion to $800 billion, up from roughly $400 billion in 2025. Peaking ahead, new reports predict that AI hyperscaler capex will hit $1.1 trillion in 2027.
Celestica is projected to grow its revenue by 54% in 2026 to reach $19 billion and then post 41% sales expansion next year to hit $26.90 billion—easily doubling 2025’s $12.39 billion.
The company has also reached a profitability pivot point after a decade-plus of stagnation. Its adjusted earnings are set to soar 63% in 2026 and another 45% next year, more than doubling from $6.05 in 2025 to $14.33 in 2027.
Plus, its most accurate estimates came in above the already improved consensus to match Celestica’s own adjusted EPS (non-GAAP) guidance of $10.15 a share in 2026.
The chart above highlights Celestica’s longer-term AI-boosted earnings outlook.
Buy Soaring CLS Stock for Value and Upside
Celestica stock soared ~5,100% in the past five years, crushing the Zacks Tech sector’s 108%, its highly-ranked Electronics - Manufacturing Services industry’s 745%, and Nvidia’s (NVDA - Free Report) 1,300%.
CLS has ripped 355% higher in the last 12 months, blowing away Nvidia’s 75% and Tech’s 52%.
The AI data center stock’s run snapped an extended period of underperformance that helped it skyrocket beyond its previous 2000 peaks into a new trading range.
CLS stock is trading right near its new all-time highs after it quickly found buyers at its 2025 highs following a short-lived post-earnings selloff.
Celestica’s huge earnings growth outlook helps make it look like a value play right now compared to where it’s been in recent years. This is all the more impressive since it’s trading right near its all-time highs in terms of price.
It’s trading at a 31% discount to its recent highs at 39.2X forward 12-month earnings and nearly in-line with its median.
Better still, Celestica trades at a 28% discount to the Tech sector with a price/earnings-to-growth (PEG) ratio of 0.87.
Bear of the Day:
Ethan Allen Interiors Inc. stock tanked after it reported its third-quarter fiscal 2026 financial results on April 29.
The home furnishings retailer provided disappointing earnings guidance once again, which helps it land a Zacks Rank #5 (Strong Sell). Ethan Allen Interiors stock is being hit by multiple headwinds, including broader macroeconomic uncertainty.
Why Ethan Allen Interiors Stock is a Zacks Rank #5 (Strong Sell)
Ethan Allen is a furniture powerhouse and a leading interior design company.
In its own words, ETD is a “leading interior design destination combining state-of-the-art technology with personal service.”
The company boasts that it manufactures about 75% of its custom-crafted furniture in its own North American manufacturing facilities.
ETD’s revenue and earnings have faded after a Covid-based boom. Its earnings outlook has dropped over the last several years as it deals with a challenging environment highlighted by inflation, tariffs, and Covid-era pull forward in furniture shopping, and more.
Ethan Allen provided another disappointing outlook when it reported its Q3 fiscal 2026 results on April 29. Its Q4 earnings estimate tanked 17% since then, with its FY26 consensus 5% lower and its 2027 outlook down 9%. These recent negative revisions earn the stock a Zacks Rank #5 (Strong Sell).
ETD’s most accurate estimate also came in below consensus as it struggles to navigate a tough operating environment. The firm’s Q3 results were negatively impacted by a “reduction in business with the U.S. State Department, lower international sales and sluggish demand from a challenging environment for home furnishings, which included weather disruptions and macroeconomic uncertainty.”
Ethan Allen is part of the Zacks Retail - Home Furnishings industry that ranks in the bottom 12% of over 240 Zacks industries.
It is also hard to predict when things might start to turn around significantly for Ethan Allen and the wider home furniture business. This backdrop might make investors want to stay away from ETD and the broader industry.
Additional content:
3 Semi Stocks Poised to Gain on Google's $190B AI Buildout
The semiconductor sector has emerged as the primary engine of equity market strength in the first five months of 2026, fueled by an unrelenting surge in artificial intelligence (AI) investment from major cloud platforms. Year-to-date gains have been exceptional, with the iShares Semiconductor ETF (SOXX) rising 54.7%, underscoring the market’s conviction that semiconductors are the backbone of the global AI infrastructure build-out.
The Philadelphia Semiconductor Index reached its highest quote ever on April 24, 2026. This powerful momentum reflects sustained demand for advanced computing capabilities, validated by strong earnings across the industry.
Alphabet — the parent of Google — reported its first-quarter 2026 results and used the announcement to dramatically reaffirm its long-term commitment to AI infrastructure. The company updated its 2026 capital expenditure guidance range to $180 billion to $190 billion, up from its previous estimate of $175 billion to $185 billion. This places Google's 2026 spending plan among the largest single-year capital programs in corporate history, dedicated almost exclusively to AI-related infrastructure, including servers, data centers and networking equipment.
The company expects 2027 capex to "significantly increase" compared to 2026, signaling that Google views AI compute capacity as a structural priority extending well beyond the current cycle. The aggressive plan is supported by an extraordinary backlog. Cloud revenues soared 63% with a backlog of $460 billion, nearly double where it was last quarter, because of demand for AI infrastructure. Capital expenditure for the quarter alone hit $35.67 billion.
Google's spending is concentrated in three areas: custom Tensor Processing Units (TPUs) co-designed with U.S. semiconductor partners, third-party AI accelerators sourced from established chip vendors, and the supporting infrastructure of memory, networking silicon, advanced packaging, and rack-level hardware required to bring AI factories online at scale. This three-pronged approach creates direct revenue pathways for several U.S.-listed semiconductor companies, including NVIDIA and Broadcom that supply the silicon, manufacture the wafers, or co-design the custom accelerators powering Google's AI ambitions.
Semiconductors Lead Market Rally as AI Spending Surges
The need for high-performance AI chips has accelerated sharply, driven by hyperscalers expanding data center capacity and deploying next-generation systems at scale. However, supply constraints — particularly in advanced packaging technologies such as CoWoS offered by Taiwan Semiconductor — have introduced a critical bottleneck. Reportedly, Google scaled back its Tensor Processing Unit production targets due to these limitations, highlighting how foundry capacity has become a strategic advantage for leading players.
Collaboration across the semiconductor ecosystem has also intensified, strengthening the AI supply chain. NVIDIA continues to push innovation with its Vera Rubin platform, while Google Cloud has moved quickly to adopt next-generation systems. Meanwhile, Broadcom has emerged as a key partner in custom AI silicon, reporting strong growth in its AI chip segment and projecting substantial revenue expansion in the coming years. Its deepening partnership with Google, including long-term involvement in Tensor Processing Unit development, highlights the strategic alignment between chip designers and hyperscalers.
Further reinforcing this trend, Alphabet, Microsoft, Amazon and Meta Platforms have collectively increased capital expenditure expectations, with total projected spending approaching $725 billion. Unlike previous technology cycles, this wave of investment is increasingly supported by contracted cloud revenues, reducing uncertainty around demand.
Against this backdrop, companies closely tied to AI infrastructure remain strategically positioned to benefit from sustained AI-driven growth.
Broadcom: Powering Google’s Custom AI Silicon Expansion
Broadcom holds perhaps the most direct exposure to Google's custom-silicon strategy. This Zacks Rank #1 (Strong Buy) company is the lead design partner for Google's seventh-generation Ironwood TPU and has secured an extended partnership through 2031 covering future generations, including TPU v8t (training) and v8i (inference). Broadcom contributes its proprietary 9.6 Tbps SerDes interconnects, ASIC implementation expertise, and high-speed networking fabric.
For first-quarter fiscal 2026 ended Feb. 1, 2026, Broadcom reported revenues of $19,311 million, up 29% from the prior-year period. First-quarter AI revenues of $8.4 billion grew 106% year over year, driven by robust demand for custom AI accelerators and AI networking. Adjusted EBITDA increased 30% year over year to a record $13.1 billion, representing 68% of revenues. Second-quarter fiscal 2026 revenue guidance of approximately $22 billion implies an increase of 47% year over year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AVGO’s fiscal 2026 earnings is pegged at $11.45 per share, up 0.8% over the past 30 days, suggesting 67.9% growth from the figure reported in fiscal 2025.
Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote
NVIDIA: Driving Google Cloud’s Next-Gen AI Infrastructure
NVIDIA remains a direct beneficiary of Google's massive AI buildout through its Blackwell and Rubin platforms now deployed across Google Cloud's global data centers. Google Cloud rolled out A4 VMs, built on NVIDIA's HGX B200 GPUs, offering developers significantly faster model training and smoother deployment, with A4X VMs based on the GB200 NVL72 and announced plans to be among the first cloud providers to deploy NVIDIA Vera Rubin NVL72 rack-scale systems in the second half of 2026.
For the fourth quarter ended Jan. 25, 2026, NVIDIA reported revenues of $68.1 billion, up 20% from the previous quarter and 73% from a year ago. For fiscal 2026, revenues were $215.9 billion, up 65% from a year ago. Fourth-quarter data center revenues reached a record $62.3 billion, up 75% year over year. This Zacks Rank #2 (Buy) company guided first-quarter fiscal 2027 revenues at $78 billion, plus or minus 2%.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 69.18% and 34.32%, respectively.
NVIDIA Corporation price-consensus-chart | NVIDIA Corporation Quote
TSM: The Foundry Backbone of Google’s AI Chip Ecosystem
Taiwan Semiconductor, the world's largest contract chipmaker, manufactures the vast majority of advanced AI accelerators powering Google's expanding global data centers. TSM fabricates Google's TPUs as well as NVIDIA's Blackwell and forthcoming Rubin GPUs on its leading-edge nodes, making it the single most indispensable foundry layer of Google's $190 billion 2026 capex program.
For first-quarter 2026, TSM reported revenues of $35.90 billion, which increased 40.6% year over year and 6.4% from the previous quarter in U.S. dollars. Gross margin for the quarter was 66.2%, and operating margin was 58.1%. High-performance computing accounted for 61% of revenues. The company guided second-quarter 2026 revenues to be between $39 billion and $40.2 billion, implying roughly 32% year-over-year growth at the midpoint, and raised its full-year 2026 U.S.-dollar revenue growth guidance to above 30%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 74% of total wafer revenues.
The Zacks Consensus Estimate for this Zacks Rank #3 (Hold) company’s 2026 and 2027 earnings implies a year-over-year increase of 43.1% and 24.49%, respectively.
Taiwan Semiconductor Manufacturing Company Ltd. price-consensus-chart | Taiwan Semiconductor Manufacturing Company Ltd. Quote
Conclusion
Google's $180-$190 billion 2026 capex commitment cements AI infrastructure as a multi-year structural growth engine. NVIDIA, TSM and Broadcom each occupy distinct, indispensable positions within Google's AI hardware supply chain. With contracted cloud revenues underpinning visibility, all three names appear well-positioned to capture a meaningful share of this transformational opportunity ahead.
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