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Marathon Petroleum Company Is Ready to Sprint Higher

Written by Thomas Hughes

Marathon Petroleum Company (NYSE: MPC) was poised to advance ahead of its Q4 earnings release, and the report triggered the move. Affirming the company’s strong position in petroleum refining and the strength of its capital return, the report catalyzed a trend-following signal with the potential to take this market to new highs. The dividend, as attractive as it is, isn’t the only driver, as share buybacks are part of the picture. 

A key factor for investors is Marathon Petroleum’s approximately 70% stake in subsidiary MPLX. MPLX is a midstream limited partnership whose business is to collect fees and pay dividends. The dividend is substantial, yielding 7.8% on its own, and is sufficient to more than cover MPC’s own substantial payment. 

Marathon’s dividend yield was approximately 2.25% as of early February. Alongside MPLX’s dividend income and Marathon’s healthy cash flow, that supports aggressive share buybacks, the primary driver of long-term price action.

MPC’s buybacks in Q1 and throughout 2025 reduced its average diluted share count by about 6.5% for the quarter and roughly 10% for the year, a pace likely to continue in 2026. Regarding the dividend, distribution increases are also expected. The company has increased payments for four consecutive years and has the capacity to continue the trend.

Marathon’s Robust Q4 Underpins 2026 Outlook 

Marathon Petroleum had a solid Q4, with revenue falling only 0.1% year-over-year, outpacing consensus by 300 basis points (bps). The strength was driven by refining and marketing, as well as strong margins. 

Margins are the critical detail, as they were stronger than expected, producing leveraged strength in the bottom-line result.

The adjusted earnings came in at $4.06, or nearly 50% above the consensus forecast, with utilization and efficiency highlighting business quality. The company achieved 94% utilization and a 105% margin capture rate.

Guidance was also favorable. While no revenue or earnings estimates were given, the outlook for gasoline suggests margins will remain elevated, suggesting another strong year for MPC.

The company’s focus is on high-return capital projects, margin-enhancing efficiencies, and capital return. Projects include new capacity for transport, processing, and treatment in high-margin businesses. 

Marathon Analysts Point to Record Stock Price Highs

Marathon Petroleum’s analysts responded favorably to the news, highlighting the Q4 strength and potential for momentum to build in 2026. While no revisions were issued immediately after the report, the chatter aligns with trends of increasing analyst coverage, firming sentiment, and a rising price target. Consensus assumed a 10% upside ahead of the release, with the high-end pegged at $220, in line with record highs. 

Institutional activity aligns with the uptrend, suggesting downside risk is limited. The group owns nearly 90% of the stock and bought on balance in 2025. While selling outpaced buying in Q4 2025, the balance reverted to accumulation in early 2026, helping to put a market bottom in place following the Q4 2025 sell-off. The top three holders are fund managers Vanguard, BlackRock, and State Street Capital, which collectively own 30% of the stock. 

The post-release price action has been favorable. MPC price advanced following the release, extending a rebound that began in early 2026. The movement shows support at a pair of long-term EMAs, signaling a trend-following entry for investors.

The price is likely to trend higher, potentially reaching the $200 level by mid-2026 and record highs soon after. In the long term, fresh all-time highs seem inevitable due to institutional interest and share buybacks. The dwindling share count and improving equity leave no other option.  READ THIS STORY ONLINE

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The Atomic Pivot: AI’s $50 Billion Power Move

Written by Jeffrey Neal Johnson

For the last three years, the story of artificial intelligence (AI) has been a story about silicon. Investors have poured trillions of dollars into NVIDIA (NASDAQ: NVDA) and chip manufacturers, betting on the processors that crunch the data. However, as we move deeper into 2026, the bottleneck for AI growth has shifted. The primary constraint is no longer processing power; it is electrical power.

Tech sector giants are rapidly transforming into utility sectoroperators to keep their servers online. This shift has effectively decoupled the nuclear energy sector from traditional, slow-growth utility markets, aligning it instead with high-growth technology valuations. As companies like Oracle (NYSE: ORCL) and Meta Platforms (NASDAQ: META) bypass the public grid to build their own power plants, a nuclear trinity has emerged as the primary beneficiary of this new industrial revolution.

From Chips to Atoms: The Hardware Revolution

The clearest signal of this capital shift arrived recently with Oracle’s massive financial maneuvering. Oracle founder Larry Ellison explicitly confirmed plans to construct a gigawatt-scale data center campus. The headline-grabbing detail was not the servers, but the power source: a “trio of small modular reactors” (SMRs). To fund this massive infrastructure buildout, Oracle is entering the bond market to raise $50 billion in 2026.

This capital expenditure marks a turning point for the industry. The traditional electric grid is too congested and bureaucratic to keep pace with the rapid timeline of the AI arms race. Tech companies need decentralized, dedicated power sources that can be deployed directly on-site or behind the meter.

This reality validates the business models of SMR developers, moving them from speculative science projects to essential hardware providers. Investors should view this $50 billion not just as a spending plan but also as validation of the sector. When one of the world’s largest software companies commits to building nuclear reactors, the technology risk is no longer the primary concern; execution is.

The Hardware: 2 Ways to Play the Reactor Race

Two distinct companies are positioned to capture this massive spending, though they offer investors very different business models. Understanding the difference between selling power and selling designs is critical for evaluating these stocks.

Oklo Inc. (NYSE: OKLO) operates as an owner-operator. Much like a utility, they intend to build, own, and manage the plants, selling electricity directly to customers. This model was validated in January 2026, when Oklo signed a binding agreement to provide Meta Platforms with 1.2 gigawatts (GW) of power. The financial structure of this deal is particularly important for shareholders. It includes a prepayment mechanism, meaning Meta is essentially fronting cash to fund construction. For investors, this is a vital detail because it provides Oklo with non-dilutive capital. They do not need to issue millions of new shares to get their first plants off the ground.

NuScale Power (NYSE: SMR), by contrast, operates on a licensing model. They develop the intellectual property and sell the reactor design to third-party developers, similar to how a franchisor operates. NuScale remains the only SMR provider with a standard design approval from the Nuclear Regulatory Commission (NRC), giving it a significant regulatory head start. Their partnership with ENTRA1 and the Tennessee Valley Authority (TVA) aims to deploy 6 GW of power, enough to run approximately 60 hyperscale data centers.

However, the licensing model comes with different financial risks. NuScale is currently burning cash to make milestone payments to its partners to secure these projects. While these payments, roughly $35 million per project phase, hurt the balance sheet in the short term, they are necessary to secure NuScale’s placement in massive projects backed by U.S. and Japanese infrastructure funds.

You Can’t Download Uranium: The Supply Crunch

While Oklo and NuScale compete for reactor contracts, every new plant, regardless of design, requires fuel to operate. This dynamic makes Cameco Corporation (NYSE: CCJ) the definitive pick-and-shovel play in the sector.

The fundamentals for uranium are tighter than they have been in decades. Spot prices are holding near $100 per pound, driven by a structural supply deficit. Unlike a software factory, which can ramp up production in months, a uranium mine takes ten years to permit and develop. Supply cannot instantly react to Oracle’s demand, which keeps a floor under commodity prices.

Furthermore, Cameco offers a safety net that the startups cannot match: its 49% stake in Westinghouse Electric Company. Westinghouse services roughly half the nuclear reactors currently operating globally. This service revenue offers stability and a lower risk profile. Even if new SMR builds face delays, the existing fleet must be maintained, ensuring a steady stream of cash for Cameco shareholders regardless of the volatility in the tech sector.

Project Warp Speed: The July 4th Catalyst

Historically, the biggest risk to nuclear stocks was not technology, but bureaucracy. The U.S. Nuclear Regulatory Commission (NRC) was often viewed by Wall Street as a barrier to deployment, with review processes that took years and cost hundreds of millions of dollars. However, the regulatory landscape shifted dramatically in early 2026 with the new administration.

The White House has issued an Executive Order mandating that three new advanced reactors achieve criticality by July 4, 2026. This aggressive timeline is a game-changer for the industry. It forces federal regulators to prioritize speed and efficiency over traditional, lengthy review processes.

For stock valuations, this is a critical catalyst. It compresses the timeline between concept and revenue. Oklo, which is currently moving through the pre-application phase for its Aurora powerhouses, stands to benefit significantly from this fast-track environment. NuScale, already holding design approvals, can leverage this political pressure to accelerate site permitting for its TVA projects, potentially bringing revenue forward by years.

Investing in the Infrastructure of Intelligence

The convergence of massive technology capital and aggressive government deregulation has created a rare market environment. However, investors must remain measured. This is a volatile sector; stocks like Oklo and NuScale can see double-digit percentage swings in a single trading session, driven by headlines or macroeconomic sentiment.

Yet, despite the daily noise, the long-term trend lines are pointing upward. The demand for AI computing power is existential for companies like Oracle, Meta, and Alphabet (NASDAQ: GOOGL). They cannot function without reliable, carbon-free energy, and nuclear power is the only scalable solution available.

For investors, the current pullback in share prices may represent a disconnect between short-term sentiment and long-term fundamentals. The $50 billion flowing into the sector suggests that nuclear energy is no longer just a commodity trade; it is now the foundational layer of the entire technology stack. READ THIS STORY ONLINE

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The AI in a Box Trade: Hardware Is the Next Boom

Written by Jeffrey Neal Johnson

Investors have spent the last year captivated by the explosive rally in the semiconductor sector. SanDisk (NASDAQ: SNDK), the flash memory giant recently spun off from Western Digital (NASDAQ: WDC), has become the latest market obsession. The stock has risen by over 700% in the last year. Following a massive earnings beat in early February, the stock surged another 15%, driven by apparently insatiable global demand for data storage. 

Seasoned investors understand that semiconductors are merely ingredients. They do not exist in a vacuum; they are purchased for installation in devices. We are currently witnessing a significant shift in the artificial intelligence (AI) landscape. The market is moving from the AI Training phase, which takes place in massive centralized cloud data centers, to the AI Inference phase. This new phase involves running AI models locally on physical devices at the network edge, including laptops, desktops, and private AI servers. 

This macroeconomic shift moves the heavy capital-spending cycle from chipmakers to the Original Equipment Manufacturers (OEMs) that build the physical infrastructure. While the broader market continues to chase the overheated semiconductor rally, the data suggests a compelling catch-up trade is forming. 

The Signal: What SanDisk’s Earnings Actually Mean

SanDisk’s recent earnings report provided a reason to buy the stock, offering a roadmap for the broader technology sector.

On Jan. 29, the company reported revenue of $3.03 billion, a 61% increase year-over-year. Even more telling was the gross margin expansion, which was up to 51.1%. This indicates that SanDisk has significant pricing power, as demand for storage far outstrips supply.

This specific data point serves as a leading indicator for the hardware sector.

The demand for flash memory is not random. It is being driven by the specific requirements of Edge AI. Unlike traditional software, AI models require massive amounts of fast, local storage to run effectively without constantly connecting to the internet.

Key drivers for running AI locally include:

• Speed: Processing data on the device reduces lag time, also known as latency.
• Privacy: It’s optimal for sensitive corporate data not to leave the building or be uploaded to a public cloud.
• Cost: Companies can avoid expensive monthly cloud subscription fees for every AI query.

If SanDisk is selling record amounts of memory at premium prices, it confirms that corporations are actively upgrading their hardware fleets. The components are being bought in bulk, which means the servers and PCs they go into are next in line for a sales boom.

Dell Technologies: Building the AI Factory

If SanDisk provides the signal, Dell Technologies (NYSE: DELL) provides the confirmation. Dell’s stock serves as a flight to safety for investors seeking exposure to AI without the volatility of unproven software startups.

Dell bridges the cloud and the edge. While much of the media focus has been on public cloud giants, Dell has quietly secured its position as the preferred vendor for private enterprise.

The company reported a record $18.4 billion backlog for its AI servers in the third quarter of 2026. Furthermore, year-to-date orders for AI servers have hit $30 billion.

These numbers prove that the AI Factory strategy is working. Corporations are not just talking about AI; they are signing purchase orders for the hardware needed to run it.

As businesses move to bring their AI operations in-house to protect their intellectual property, they require the high-performance PowerEdge servers that Dell manufactures.

For investors, a backlog of this magnitude offers high visibility. It means Dell has secured revenue for future quarters, insulating it somewhat from short-term economic fluctuations. While software companies struggle to monetize AI features, Dell is successfully selling the picks and shovels required to build the infrastructure. Dell represents a stable growth play with confirmed order flow and a dominant position in the commercial market.

HP Inc.: A High-Yield Opportunity in Disguise

While Dell represents growth, HP Inc. (NYSE: HPQ) represents deep value. The stock is currently trading lower, down around 30% over the past three months. This decline is primarily attributed to news that CEO Enrique Lores is resigning to join PayPal. However, market overreactions to executive changes often create buying opportunities for patient investors who focus on fundamentals rather than headlines.

The real story for HP is not who is leaving, but the strategic plan being left behind. Coinciding with the leadership transition, HP launched its Fiscal 2026 Plan.

This aggressive restructuring initiative aims to reduce the global workforce by 4,000 to 6,000 employees. The goal is to generate $1 billion in gross run-rate savings by the end of fiscal year 2028.

This efficiency drive is critical. As noted in the SanDisk analysis, the cost of memory components is rising. High component costs can squeeze profit margins for device makers.

By cutting operational overhead by $1 billion, HP is positioning itself to protect its profit margins despite these higher input costs.

Furthermore, HP offers a significant incentive for investors to wait for the turnaround. The company has raised its quarterly dividend to 30 cents per share. With the stock price suppressed near $19, this translates to a dividend yield of approximately 6.5%.

HP is the purest bet on the coming AI PC refresh cycle. As Microsoft (NASDAQ: MSFT) releases updates requiring advanced neural processing units (NPUs), the global fleet of aging office computers will need to be replaced. HP’s cost-cutting measures and high yield offer a safety net, while the inevitable hardware refresh provides asymmetric upside potential.

The Hardware Supercycle Begins

The AI in a Box trade offers a logical path for capital rotation. SanDisk provided the initial signal: the world is short on storage because the hardware upgrade cycle has begun. Dell Technologies confirms this signal with a record-breaking backlog of server orders, offering investors a solid growth vehicle backed by tangible demand. Meanwhile, HP Inc. offers a compelling value proposition, paying investors a handsome dividend to wait for the PC refresh cycle to accelerate.

By looking beyond chipmakers to the companies building the final devices, investors can participate in the next phase of the AI revolution, Edge Computing, at valuations far more reasonable than those in the overheated semiconductor sector. READ THIS STORY ONLINE

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