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Buy 3 AI-Powered Momentum Stocks for October After a Mixed September
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Key Takeaways
Dell Technologies saw AI server revenue double, while backlog surged to $95 billion in fiscal 2027.
Quanta Services' backlog jumped 49% year over year to a record $53.4 billion amid AI data center demand.
Forgent Power Solutions posted record bookings and backlog, with AI lab and hyperscaler wins boosting growth.
September is historically known as the worst-performing month for U.S. equities. However, this year the month ended on a mixed note. The S&P 500 and the Dow fell 0.5% and 4.3%, respectively. However, the Nasdaq Composite rose 1.9%. The strong performance of the tech-heavy Nasdaq Composite was primarily driven by a rejuvenated artificial intelligence (AI) trade. The AI frenzy is set to stay firm in October.
Here, we recommend three AI infrastructure bigwigs with a favorable Zacks Rank that are expected to maintain their momentum in October, too. These are: Dell Technologies Inc. (DELL - Free Report) , Quanta Services Inc. (PWR - Free Report) and Forgent Power Solutions Inc. (FPS - Free Report) . Each of the stocks currently sports a Zacks Rank #1 (Strong Buy) and has a Zacks Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks in the past month.
Image Source: Zacks Investment Research
Dell Technologies Inc.
Dell Technologies reported blockbuster results for the second quarter of fiscal 2027. Revenues surged 53%, and EPS skyrocketed 203% year over year. Infrastructure Solutions Group revenue, jumped 89% to $31.8 billion, led by a 100% increase in AI-optimized server revenue, to $16.4 billion and a 122% surge in traditional server and networking sales to $10.5 billion.
AI Servers and Core Infrastructure Strength
In the second quarter of fiscal 2027, DELL booked a record $60.9 billion worth of AI orders and recognized $16.4 billion of AI server revenues. Orders totaled $131.7 billion over the past 12 months, while backlog rose to $95 billion from $51.3 billion at the end of first-quarter fiscal 2027. DELL expects roughly $19 billion of AI server revenues in third-quarter fiscal 2027.
On May 27, the Pentagon announced a five-year contract with Dell worth $9.7 billion for Microsoft 365 productivity services. As a result, management is hopeful that its fiscal 2027 AI server sales will reach $60 billion.
Integrated AI Portfolio
DELL’s expanding AI infrastructure stack supports customers that want compute, networking, storage and data management on infrastructure they control. DELL’s ecosystem includes NVIDIA Corp. (NVDA - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) , OpenAI, Meta Platforms Inc. (META - Free Report) , Palantir Technologies Inc. (PLTR - Free Report) , Mistral AI, Alphabet Inc. (GOOGL - Free Report) , Reflection and Glean.
DELL’s advanced AI-optimized servers including the PowerEdge XE9780 and 9780L platforms supporting up to 256 NVIDIA HGX B300 GPUs per rack, the XE9712 with NVIDIA GB300 NVL72, and the XE7745 supporting NVIDIA RTX Pro 6000 Blackwell GPUs, are noteworthy.
Solid Estimate Revisions
Dell Technologies has an expected revenue and earnings growth rate of 72.4% and more than 100%, respectively, for the current year (ending January 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 32.3% over the last 30 days.
DELL has an expected revenue and earnings growth rate of 18% and 12%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 26.1% over the last 30 days.
Quanta Services Inc.
Quanta Services is well-positioned to capitalize on robust infrastructure spending across utility, power generation, technology and load center markets. The ongoing expansion of AI data centers, grid modernization, renewable generation and advanced manufacturing is driving customers to undertake larger, multiyear infrastructure programs.
Surging AI-related power demand and expanding utility investments are driving data center project opportunities, making data centers a central pillar of PWR’s long-term growth strategy. The company is heavily investing in deepening its vertical supply chain to offset the ongoing global uncertainties and rising inflation.
Robust Long-Term Potential
Favorable trends in AI data centers helped drive total backlog to a record $53.4 billion as of June 30, 2026, up 49% year over year from $35.8 billion in June 2025. The increase was broad-based, with Electric Infrastructure Solutions backlog rising year over year to $43.8 billion from $30.3 billion, while Underground and Infrastructure Solutions backlog climbed to $9.7 billion from $5.6 billion.
PWR’s acquisition strategy is creating another growth avenue while complementing organic opportunities. Acquisitions of Phalcon, Enerfab, Percheron and PSD expand its electrical, mechanical, fabrication, engineering and front-end capabilities while broadening exposure to AI-powered data centers, power generation, advanced manufacturing, utilities and other critical infrastructure.
Solid Estimate Revisions
Quanta Services has an expected revenue and earnings growth rate of 38.4% and 55.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 1.3% over the last seven days.
PWR has an expected revenue and earnings growth rate of 14.8% and 16.2%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 0.9% over the last 30 days.
Forgent Power Solutions Inc.
Forgent Power Solutions designs, manufactures and sells electrical distribution equipment used in AI-powered data centers, the power grid and industrial facilities. FPS continues to benefit from exceptionally strong demand across AI data centers and grid infrastructure.
FPS exited fiscal 2026 with a record booking of $1.5 billion, a solid backlog of $3.02 billion and a book-to-bill that reached a record 3.3X. FPS’ integrated Powertrain Solutions strategy, engineering-led customer engagement and vertically integrated manufacturing model are helping it gain market share and win large multi-product contracts. The company also expects margin expansion and stronger free cash flow as new production facilities ramp and utilization improves through fiscal 2027.
AI Data Center Customer Reach Deepens
Forgent Power Solutions received its first direct order from a frontier AI lab during the quarter and signed a master service agreement with a hyperscaler. The initial AI-lab award covers medium-voltage transformers and switchgear for a campus expected to exceed one gigawatt. FPS also highlighted broader wallet-share gains as existing customers increasingly buy multiple product lines and integrated solutions.
FPS announced a $35 million investment in a dedicated 385,000-square-foot Powertrain Solutions facility at its Tijuana campus. The project is expected to increase Powertrain Solutions manufacturing capacity by more than 50% and come online in the fourth quarter of fiscal 2027.
Solid Estimate Revisions
Forgent Power Solutions has an expected revenue and earnings growth rate of 82.6% and 87.4%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 22% over the last 30 days.
View the Zacks #1 Rank List
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Buy 3 AI-Powered Momentum Stocks for October After a Mixed September
Key Takeaways
September is historically known as the worst-performing month for U.S. equities. However, this year the month ended on a mixed note. The S&P 500 and the Dow fell 0.5% and 4.3%, respectively. However, the Nasdaq Composite rose 1.9%. The strong performance of the tech-heavy Nasdaq Composite was primarily driven by a rejuvenated artificial intelligence (AI) trade. The AI frenzy is set to stay firm in October.
Here, we recommend three AI infrastructure bigwigs with a favorable Zacks Rank that are expected to maintain their momentum in October, too. These are: Dell Technologies Inc. (DELL - Free Report) , Quanta Services Inc. (PWR - Free Report) and Forgent Power Solutions Inc. (FPS - Free Report) . Each of the stocks currently sports a Zacks Rank #1 (Strong Buy) and has a Zacks Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks in the past month.
Image Source: Zacks Investment Research
Dell Technologies Inc.
Dell Technologies reported blockbuster results for the second quarter of fiscal 2027. Revenues surged 53%, and EPS skyrocketed 203% year over year. Infrastructure Solutions Group revenue, jumped 89% to $31.8 billion, led by a 100% increase in AI-optimized server revenue, to $16.4 billion and a 122% surge in traditional server and networking sales to $10.5 billion.
AI Servers and Core Infrastructure Strength
In the second quarter of fiscal 2027, DELL booked a record $60.9 billion worth of AI orders and recognized $16.4 billion of AI server revenues. Orders totaled $131.7 billion over the past 12 months, while backlog rose to $95 billion from $51.3 billion at the end of first-quarter fiscal 2027. DELL expects roughly $19 billion of AI server revenues in third-quarter fiscal 2027.
On May 27, the Pentagon announced a five-year contract with Dell worth $9.7 billion for Microsoft 365 productivity services. As a result, management is hopeful that its fiscal 2027 AI server sales will reach $60 billion.
Integrated AI Portfolio
DELL’s expanding AI infrastructure stack supports customers that want compute, networking, storage and data management on infrastructure they control. DELL’s ecosystem includes NVIDIA Corp. (NVDA - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) , OpenAI, Meta Platforms Inc. (META - Free Report) , Palantir Technologies Inc. (PLTR - Free Report) , Mistral AI, Alphabet Inc. (GOOGL - Free Report) , Reflection and Glean.
DELL’s advanced AI-optimized servers including the PowerEdge XE9780 and 9780L platforms supporting up to 256 NVIDIA HGX B300 GPUs per rack, the XE9712 with NVIDIA GB300 NVL72, and the XE7745 supporting NVIDIA RTX Pro 6000 Blackwell GPUs, are noteworthy.
Solid Estimate Revisions
Dell Technologies has an expected revenue and earnings growth rate of 72.4% and more than 100%, respectively, for the current year (ending January 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 32.3% over the last 30 days.
DELL has an expected revenue and earnings growth rate of 18% and 12%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 26.1% over the last 30 days.
Quanta Services Inc.
Quanta Services is well-positioned to capitalize on robust infrastructure spending across utility, power generation, technology and load center markets. The ongoing expansion of AI data centers, grid modernization, renewable generation and advanced manufacturing is driving customers to undertake larger, multiyear infrastructure programs.
Surging AI-related power demand and expanding utility investments are driving data center project opportunities, making data centers a central pillar of PWR’s long-term growth strategy. The company is heavily investing in deepening its vertical supply chain to offset the ongoing global uncertainties and rising inflation.
Robust Long-Term Potential
Favorable trends in AI data centers helped drive total backlog to a record $53.4 billion as of June 30, 2026, up 49% year over year from $35.8 billion in June 2025. The increase was broad-based, with Electric Infrastructure Solutions backlog rising year over year to $43.8 billion from $30.3 billion, while Underground and Infrastructure Solutions backlog climbed to $9.7 billion from $5.6 billion.
PWR’s acquisition strategy is creating another growth avenue while complementing organic opportunities. Acquisitions of Phalcon, Enerfab, Percheron and PSD expand its electrical, mechanical, fabrication, engineering and front-end capabilities while broadening exposure to AI-powered data centers, power generation, advanced manufacturing, utilities and other critical infrastructure.
Solid Estimate Revisions
Quanta Services has an expected revenue and earnings growth rate of 38.4% and 55.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 1.3% over the last seven days.
PWR has an expected revenue and earnings growth rate of 14.8% and 16.2%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 0.9% over the last 30 days.
Forgent Power Solutions Inc.
Forgent Power Solutions designs, manufactures and sells electrical distribution equipment used in AI-powered data centers, the power grid and industrial facilities. FPS continues to benefit from exceptionally strong demand across AI data centers and grid infrastructure.
FPS exited fiscal 2026 with a record booking of $1.5 billion, a solid backlog of $3.02 billion and a book-to-bill that reached a record 3.3X. FPS’ integrated Powertrain Solutions strategy, engineering-led customer engagement and vertically integrated manufacturing model are helping it gain market share and win large multi-product contracts. The company also expects margin expansion and stronger free cash flow as new production facilities ramp and utilization improves through fiscal 2027.
AI Data Center Customer Reach Deepens
Forgent Power Solutions received its first direct order from a frontier AI lab during the quarter and signed a master service agreement with a hyperscaler. The initial AI-lab award covers medium-voltage transformers and switchgear for a campus expected to exceed one gigawatt. FPS also highlighted broader wallet-share gains as existing customers increasingly buy multiple product lines and integrated solutions.
FPS announced a $35 million investment in a dedicated 385,000-square-foot Powertrain Solutions facility at its Tijuana campus. The project is expected to increase Powertrain Solutions manufacturing capacity by more than 50% and come online in the fourth quarter of fiscal 2027.
Solid Estimate Revisions
Forgent Power Solutions has an expected revenue and earnings growth rate of 82.6% and 87.4%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 22% over the last 30 days.