For Immediate Release

Chicago, IL – May 14, 2026 – Zacks Equity Research shares Generac Holdings Inc. (GNRC Quick QuoteGNRC - Free Report) as the Bull of the Day and Meritage Homes Corporation (MTH Quick QuoteMTH - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Advanced Micro Devices (AMD Quick QuoteAMD - Free Report) , NVIDIA (NVDA Quick QuoteNVDA - Free Report) and Broadcom (AVGO Quick QuoteAVGO - Free Report) .

Here is a synopsis of all five stocks:

Bull of the Day:

Generac Holdings Inc. is a leading maker of backup power generators riding multiple long-term growth cycles across power-hungry AI data centers, electrification, energy storage, and energy independence.

Generac posted a blowout beat-and-raise first quarter report at the end of April, driven by surging demand for its larger Commercial & Industrial generators, especially from data centers and AI infrastructure projects that need reliable backup power.

Its Commercial & Industrial unit revenue jumped 28% in Q1, with GNRC calling for a compound annual growth rate in the low to mid 20% over the next three years. The critical backup power generator giant has surged 95% YTD, including a 25% climb after its April 29 earnings release.

Despite the rally, the Zacks Rank #1 (Strong Buy) stock still trades 45% below its 2021 highs. This means that GNRC would have to climb almost 90% to return to its all-time highs. And the AI energy and electrification stock is on the cusp of breaking above of a key technical range.

The "Strong Buy" Stock's AI Energy and Long-Term Bull Case

Generac is the leading manufacturer of backup power generators. The Wisconsin-based company makes products that automatically supply electricity when the main power grid fails, serving customers across residential, portable, commercial, industrial, and more.

GNRC also offers solar power and battery storage solutions, as well as smart home energy monitors and more. These are part of a broader home energy solutions push. The company has EV charging offerings as well. Meanwhile, its portable generators are smaller, movable units used for camping, job sites, and short-term power needs.

Its residential generators are large, permanent home standby generators installed outside houses, which turn on automatically during power outages. This segment is growing as the U.S. suffers from more frequent outages, as the grid ages rapidly while demand soars.

Generac’s home standby segment is also benefiting from a society that is becoming more sensitive to outages because people are increasingly connected and working from home. On top of that, the population is aging, with 65% of HSB generator customers 60+, with a large portion of homeowners preparing to “age in place.”

Generac’s Commercial & Industrial (C&I) segment makes large-scale backup generators and power systems for businesses, hospitals, AI data centers, factories, apartment buildings, and beyond that need reliable power 24/7.

The Commercial & Industrial unit is its biggest growth driver, benefiting from surging AI data center demand, more frequent grid outages, and increasing need for backup power in commercial buildings.

Large AI data centers consume as much electricity as a mid-sized city. AI growth, alongside reshoring and the energy transition, are expected to drive a 25% increase in U.S. electricity demand by 2030 and a 75% to 100% increase by 2050. This is straining the grid after decades of underinvestment, with GNRC pointing to upside because “dispatchable power supply is expected to lag accelerating demand through 2030.”

Generac highlighted in its Q1 earnings presentation that the total addressable market for data center emergency backup power is $14 billion to $17 billion. The AI hyperscalers are projected to spend $600 billion to $700 billion in capex in 2026 alone, up from roughly $400 billion in 2025.

The company’s large-scale emergency backup power “ensures redundancy meets strict data center end-user uptime requirements while also preventing systemic hardware damage."

AI Infrastructure-Boosted Growth

Generac’s Commercial & Industrial unit revenue jumped 28% in Q1. On that front, it closed two acquisitions in the first four months of 2026 as part of its strategy to expand its increasingly important Commercial & Industrial segment.

This unit is set to expand at a compound annual growth rate in the low to mid 20% over the next three years. Generac’s commercial growth is set to help C&I and Residential each generate 50% of the business by 2028, vs. 2025’s 41% from the C&I unit.

The company said it is riding “generational growth” opportunities that will help it post mid-teens CAGR over the next 3 years vs 2025. GNRC said that secular mega-trends across AI and beyond will help it nearly double its C&I Segment sales by 2028.

On the earnings front, Generac expects to grow its adjusted EBITDA to between $1.25 to $1.45 billion in 2028, implying a low 20% CAGR, with its EBITDA margins set to jump from 17% in 2025 to the lows 20s% by 2028.

Generac crushed our Q1 earnings by 35% and raised its guidance. Its consensus 2026 earnings estimate has jumped 6% since its release, with its 2027 outlook 9% higher. GNRC’s upward EPS revisions land it a Zacks Rank #1 (Strong Buy).

The company is projected to grow its adjusted earnings by 41% in 2026 and 19% next year to reach $10.60 a share, which would see it overtake its previous 2021 records. Meanwhile, it’s expected to grow its revenue by 17% this year and over 13% next year to hit $5.58 billion, blowing away 2022’s $4.57 billion in the process.

Buy Soaring Top-Ranked GNRC Stock for 90% Upside?

Generac shares have soared 1,350% in the past 15 years, outperforming its industry’s 233% and the S&P 500’s 500%. This impressive stretch includes its 45% decline from its late 2021 peaks.

GNRC stock offers roughly 90% upside if it were to ever return to its all-time highs of around $505 a share vs. Wednesday’s ~$267 a share.

GNRC stock has already skyrocketed 95% in 2026 and 110% over the past year. The run has it on the verge of overtaking some critical ranges from before its 2022 selloff.

Plus, it experienced a long-term golden cross earlier this year, with its 50-week moving average crossing above its 200-week trendline

Bear of the Day:

Meritage Homes Corp. is a U.S. homebuilding giant that’s suffering alongside the slowing housing market, dragged down by high mortgage rates, inflation, and more.

MTH’s downward earnings per share (EPS) revisions since its first quarter release on April 22 earn the homebuilder a Zacks Rank #5 (Strong Sell).

Time for Investors to Stay Away from MTH Stock?

Meritage Homes is the fifth-largest public homebuilder in the U.S., based on homes closed in 2025. The company specializes in building energy-efficient, affordable entry-level and first move-up homes.

Meritage Homes operates in 12 states mostly across the Sun Belt and Southeast: Arizona, California, Colorado, Utah, Tennessee, Texas, Alabama, Florida, Georgia, Mississippi, North Carolina, and South Carolina.

The homebuilder went on a massive run from 2011 until 2022, as did most of the industry. MTH and its peers road the post-financial crisis economic and Wall Street boom that was capped off by 20% average sales growth between 2020 and 2022.

The wild Covid-driven housing boom created a massive pull forward across the home-buying market. The market benefited from a buyer-friendly low-interest and mortgage rate environment. The housing market has cooled significantly since then as home prices soar and mortgage rates remain elevated. The average 30-year fixed rate mortgage hovers at around 6.37% righ now vs. between 2.65% and 4% from early 2020 to early 2022.

MTH said its first quarter was dented by a severe winter storm in January, geopolitical tensions in Iran, higher mortgage rates, and softer consumer sentiment. Meritage has been forced to utilize more incentives to move homes, which hurts margins.

Meritage Homes is projected to see its revenue fall 6% YoY, following an 8% decline last year. Meanwhile, its adjusted earnings are expected to sink another 29% YoY in 2026, after tanking in 2025.

Its FY26 Zacks consensus EPS estimate has fallen 14% since its late April release, with its 2027 estimate 12% lower. These recent downward revisions earn the stock a Zacks Rank #5 (Strong Sell), and extend a larger downturn over the past year.

MTH shares have climbed 400% in the past 15 years to lag the S&P 500’s 500% and its industry’s 430%. The stock is down 9% over the last 12 months while the benchmark has climbed 30%. The ongoing macroeconomic headwinds, from inflation and higher mortgage rates, are likely to keep weighing on Meritage Homes in the short term.

Investors might want to stay away from Meritage Homes for now since the housing market remains under stress and the broader stock market has surged to fresh highs. Plus, it Building Products-Home Builders segment is in the bottom 7% of 250 Zacks industries. That said, the homebuilder’s long-term outlook likely remains intact given the need for more housing inventory in the U.S.

Additional content:

AMD Jumps +76% in a Month: Any More Room for the Stock to Rise?

Advanced Micro Devices shares have risen 75.8% year to date (YTD), outperforming the broader Zacks Computer and Technology sector’s return of 12.6%. Strong demand for data center EPYC processors and Instinct GPUs has been the key catalyst. However, AMD is facing stiff competition from the likes of NVIDIA and Broadcom across domains, including AI-powered data-centers, high-performance computing and AI PCs, which might limit further appreciation in AMD shares. YTD, shares of NVIDIA, Broadcom and Intel have returned 12.4%, 10.1% and 89%, respectively. So, what should investors do with AMD stock?

Expanding Data Center Footprint Boosts AMD’s Prospects

AMD is entering a stronger growth phase as AI infrastructure demand shifts the company’s mix toward the Data Center segment, revenues from which surged 57% year over year to $5.8 billion, driven by EPYC CPUs and Instinct GPUs. AMD’s core upside case is that AI inference and agentic AI are expanding demand not only for GPUs, but also for high-performance server CPUs used for orchestration, data movement, and head-node workloads.

AMD delivered its fourth consecutive quarter of record server CPU revenues in the first quarter of 2026, as the figure increased more than 50% year-over-year with sales to both cloud and enterprise customers each growing more than 50%. Share gains accelerated year-over-year, reflecting the ramp of fifth-gen EPYC Turin CPUs and the continued strength of fourth-gen EPYC processors across a wide range of workloads.

The company now expects the server CPU total addressable market to be more than $120 billion by 2030 (growth of more than 35% annually) and expects server CPU revenue to grow more than 70% year over year in Q2. Verano, AMD’s first EPYC CPU purpose-built for AI infrastructure, is likely to boost the company’s server market share.

EPYC adoption is increasing as it is supporting a broad range of AI workloads from general-purpose compute and data processing to head nodes for accelerators and emerging Agentic applications. EPYC-powered cloud instances increased nearly 50% year-over-year to more than 1,600 in the first quarter of 2026. In enterprise, AMD is benefiting from an expanding small and medium business clientele with expansion across financial services, health care, industrial and digital infrastructure companies.

AMD’s AI accelerator opportunity is improving, supported by large-scale engagements with Meta and OpenAI, and growing MI450/Helios customer interest. Data Center AI business revenues jumped by a significant double-digit percentage year-over-year as adoption of Instinct accelerates across cloud, enterprise, sovereign and supercomputing customers in the first quarter of 2026. The company is confident in delivering tens of billions of dollars of annual Data Center AI revenues in 2027.

AMD’s Earnings Estimate Revision Shows Rising Trend

The Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at $1.60 per share, up 11.1% over the past 30 days. AMD reported earnings of 48 cents in the year-ago quarter.

Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote

The consensus mark for 2026 earnings is pegged at $7.18 per share, up 8.5% over the past 30 days, suggesting 72.2% growth from 2025’s reported figure.

AMD’s Gross Margins Under Pressure from Unfavorable Mix

AMD expects the ramp of MI450 beginning the third quarter of 2026 and into the fourth quarter to hurt gross margin expansion.

In the first quarter of 2026, gross margin expanded 170 basis points (bps) to 55%, driven by a favorable product mix, including a higher data center revenue contribution. For the second quarter of 2026, AMD expects gross margin to be roughly 56%, driven by higher CPU sales.

AMD also expects PC shipments to be lower in the second half due to higher memory and component costs. This is expected to hurt higher margin client revenues, likely putting gross margin under pressure. Moreover, lower-margin gaming revenues are also expected to decline due to higher memory and component costs.

AMD Shares Overvalued

AMD shares are overvalued, as suggested by a Value Score of F. The AMD stock is trading at a forward 12-month price/earnings (P/E) of 53.06X compared with the broader sector’s 25.45X.

AMD shares are trading at a premium compared with peers, including NVIDIA and Broadcom. Shares of NVIDIA and Broadcom are trading at a P/E multiple of 24.96 and 28.28, respectively.

Here’s Why AMD Stock Is a Hold Now

AMD’s expanding portfolio and growing data center AI footprint are expected to improve its top-line growth over the long term. So, investors currently holding the stock should stay put.

However, AMD’s near-term prospects are limited given stiff competition. Stretched valuation is a concern for investors.

AMD currently has a Zacks Rank #3 (Hold), suggesting that it may be wise for investors to wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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