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Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong Momentum

Written by Chris Markoch

It’s not hyperbole to say NVIDIA Corp. (NASDAQ: NVDA) has made many investors millionaires.

NVDA is up more than 1,300% in the last five years. Go back 10 years, and NVDA has delivered a staggering total return of over 23,800%. That means an investor who put about $3,500 in NVIDIA stock 10 years ago and held it would be a millionaire.

Of course, the issue is that many investors didn’t see NVIDIA’s key role in the artificial intelligence (AI) revolution. It’s been a transformative event that continues to ripple through the economy.

But it’s also changing the outlook for where the smart money is going. To be sure, NVDA will continue to do well. But it’s “only” up about 11% in 2026, and prior to mid-April, it was negative for the year.

The AI Infrastructure Story Is Expanding

A bearish view on NVIDIA is that the AI bubble is getting ready to burst. This earnings season doesn’t clearly support that take, but the narrative won’t die easily.

A more accurate reason for the slide in NVDA is a rotation within the AI story. Specifically, investors have realized that NVIDIA isn’t the only game in town. 

The market has increasingly treated AI as a full-stack buildout—compute, power, cooling, networking, and software—rather than a single-company trade, and there are other companies that are critical to the AI buildout that are part of an “NVIDIA and” portfolio.

These stocks fit into the picks-and-shovels theme that is gaining momentum. Although they sit in different parts of the AI infrastructure chain, they are each tied to the physical and technical requirements for scaling AI. And a common denominator for the group is their strong growth since April 1, which is likely to continue for several years.

Vertiv Is Solving the AI Data Center Cooling Problem

Data centers require massive amounts of energy and give off tremendous amounts of heat. That requires thermal management solutions, which is why Vertiv (NYSE: VRT) is up over over 100% in 2026, and up nearly 260% in the past year.

The company is the equivalent of the person selling umbrellas on a rainy day. Hyperscalers have a problem; Vertiv has the solutions.

Vertiv reported Q1 2026 earnings on April 22. The only blemish in an otherwise strong report was possible headwinds from tariffs. Since the earnings release, some analysts have been raising their price targets, but the updated targets are mostly in line with VRT’s current share price. One could argue that this indicates new investors should wait for a better entry point.

On the other hand, analysts are forecasting 33% revenue growth, which makes the company’s forward price-to-earnings (P/E) of around 50x seem like a premium worth paying.

One concern is that Amazon.com Inc. (NASDAQ: AMZN), a current Vertiv customer, is developing its own liquid cooling solution. This could be a longer-term headwind, but it only impacts about 10% of the company’s revenue base.

Cadence Design Systems Powers the Next Generation of AI Chips

Chipmakers are getting a second wind in the AI trade. That explains why shares of Cadence Design Systems (NASDAQ: CDNS) are up around 27%over the past month. And it’s a good bet that the stock has further to run.

Cadence provides electronic design automation (EDA) software, hardware and intellectual property that chip makers need, particularly the companies making the most advanced chips.

The company reported Q1 2026 earnings on April 27 with a beat on the top and bottom lines. A recent acquisition may pressure earnings for the remainder of this calendar year. But the long-term outlook for CDNS looks strong and is backed by analysts who are raising price targets since the earnings report. KeyCorp has the highest target of $425, up from $405.

That said, Cadence has a forward P/E of around 57. That could be seen as an aggressive valuation if the company’s earnings are impacted in future quarters.

Ciena Is Building the High-Speed AI Networking Backbone

Ciena Corp. (NYSE: CIEN) is an optical networking company, specifically focused on the high-speed optical connections that data centers require.

It’s hard to understate Ciena’s relevance as vast amounts of data move between servers, storage, and the outside world.

Ceina reported Q1 earnings on March 5, with record revenue and a backlog approaching $7 billion.

The only “problem” in the report is the company’s ability to meet that demand. In the report, Ciena said it anticipates supply constraints preventing it from realizing all its revenue. This is coming despite the company’s accelerated capital expenditures to meet capacity.

CIEN has a consensus price target of $367.56, which is around 30% lower than its current share price. However, price targets have been rising since the “Big Tech” earnings were reported at the end of April. Patient investors should eye any pullback as an opportunity to get in on CIEN. READ THIS STORY ONLINE

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Quantum Earnings Season Is Ramping Up—What to Watch From 2 Major Players

Written by Nathan Reiff

Quantum computing earnings season is well underway, with IonQ Inc. (NYSE: IONQ) kicking things off with a Q1 2026 report that surpassed expectations in many ways. This firm set the bar fairly high, particularly with its 755% year-over-year (YOY) revenue growth and notable upward revision to its full-year 2026 guidance.

There was at least one major issue with IonQ’s first quarter of the new year, however: profitability. Adjusted losses per share widened considerably, proving that even one of the most established quantum computing companies in a fast-growing field still has plenty of work to do to demonstrate the sustainability of its model.

Next up will be two other major players in the space: D-Wave Quantum Inc. (NYSE: QBTS) and Rigetti Computing (NASDAQ: RGTI), both of which report earnings the second full week of May 2026. Below is a brief rundown of what investors might want to watch for as these companies share out their results.

Can D-Wave Break Out of Its Stock Price Slump With Promising Results?

Like other quantum firms, D-Wave started 2026 with a pronounced share price decline after rallying in the fall of 2025. In recent weeks, though, the company appeared poised to reverse course and resume its upward trajectory. Some of the impetus for this bump was likely external, as it coincided with an announcement from NVIDIA Corp. (NASDAQ: NVDA) about the launch of new AI tools to aid in the development of quantum tech.

It seems that D-Wave has reached a limit of how far investor excitement can take shares without more fundamental wins to back up this performance. 

Despite strong commercial momentum last year, including revenue that nearly tripled and fast-growing bookings, D-Wave remains a low-sales firm with only about $25 million generated across 2025.

Notably, D-Wave has been able to maintain a strong cash base, which not only provides it security while it is working to build up its top and bottom lines, but also has permitted it the flexibility to make key purchases like its acquisition of Quantum Circuits, which dramatically expands its technical reach.

At a minimum, investors watching the company’s May 12 earnings will want to see D-Wave maintain strong cash reserves at the end of the latest quarter. Ideally, however, the company will be able to accelerate its revenue growth and show signs of moving toward profitability.

Rigetti Faces the Challenge of Convincing Investors of Its Commercial Viability

If D-Wave has an uphill battle, Rigetti may have more of a mountain to climb with its earnings results. The company showed weak commercial traction in its Q4 2025 earnings, as revenue fell YOY to $1.9 million from $2.3 million in the prior-year quarter. Gross margin also declined YOY by a sizable 9% to 35%, and operating losses widened.

For Rigetti, the product may not be the major concern. The company has seen impressive two-qubit gate fidelity in some of its latest prototypes, which could signal excellent viability for future superconducting endeavors. It also has on-premise orders that are growing, and a healthy manufacturing advantage, which should help it to scale production on some of its most promising hardware.

Rather, Rigetti must convince customers—and investors—that its products’ usefulness extends beyond government and major institution applications. IonQ has been able to do this to a greater extent, noting in its last earnings report that about 60% of its revenue for the period came from commercial customers. Investors will surely want to see similar signs of progress from Rigetti in its May 11 earnings. This could help the firm get out of its share price slump as well (it is down over 15% YTD).

Will Earnings Make or Break Investor Patience?

Wall Street analysts either remain fairly steadfast in their support of both QBTS and RGTI shares or have yet to adjust ratings: QBTS continues to be a Moderate Buy with 14 Buy ratings and only three Sell and Hold ratings, while RGTI has is also a Moderate Buy, with eight Buys and five combined Sell or Hold ratings. Analysts expect both stocks to still see considerable upside.

The real question is whether Q1 earnings will change the tide—by showing strong momentum in revenue, a shift toward profitability, growing commercial appeal, and so on—or if they might once again ask investors to wait. If the latter, it remains to be seen how patient investors are willing to be with these companies, but the downward trend early in 2026 suggests there may be a limit to this patience. READ THIS STORY ONLINE

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Flutter Sees Post-Earnings Boost as FanDuel Shows Signs of Recovery

Written by Leo Miller

Online betting giant Flutter Entertainment (NYSE: FLUT) has been one of the market’s biggest losers for the better part of a year. The stock topped $300 per share in July 2025, hit an all-time high in August, and has since come crashing down. Overall, shares have fallen more than 60% from the August high, and are now trading near $100 per share.

One of the top drags on the stock’s performance is the rising popularity of prediction markets, which offer an alternative to traditional forms of gambling. Robinhood Markets (NASDAQ: HOOD), which partners with Kalshi, said Q1 2026 was a record quarter for prediction markets volume. It also noted that volume in April was on track to hit roughly $3 billion, or its second-highest month ever. Flutter shares fell around 1.4% the day after Robinhood’s report.

Flutter posted somewhat mixed results in its Q1 2026 earnings report, but investors still viewed it favorably, with the stock rising 2% afterward. Looking ahead, there is reason to believe that Flutter represents a compelling opportunity, given how drastically its shares are down.

Flutter Beats on Revenue, Then Trims 2026 Outlook

In Q1 2026, Flutter’s revenue rose by 17% year over year (YOY) to $4.3 billion, slightly exceeding estimates of $4.24 billion.

Adjusted earnings per share (EPS) fell by 22% YOY to $1.22, but moderately beat estimates of $1.09.

Revenue in the United States increased by 6% YOY, with Flutter’s iGaming business being particularly strong. There, revenue rose by 19% YOY, while its sports betting platform, FanDuel, grew by just 1% YOY.

Its international business achieved revenue growth of 18% YOY in constant currency. However, this was largely due to acquisitions, with the firm noting that organic revenue was “in line” with the prior year.

Notably, Flutter lowered its full-year guidance to account for multiple factors. Overall, the company’s revenue expectations fell to $18.3 billion from $18.4 billion previously. This was partly due to $95 million worth of unfavorable sports betting outcomes. Although this is not ideal, it reflects the risk of operating a sportsbook and is not overly worrisome.

Flutter also lowered expectations for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to about $2.87 billion (from $2.97 billion). This drop accounts for revenue impacts and $35 million of added costs to account for its launch of FanDuel in Arkansas. While it is a negative in the near term, the fact that the company is opening FanDuel in a new state is a long-term positive, expanding its market.

FanDuel Engagement Dipped, and Management Offered a Churn Explanation

Fears surrounding Flutter in the prediction market haven’t come without evidence.

For FanDuel, average monthly players (AMPs) dropped by 6% YOY, showing that many bettors left the platform. This adds weight to the idea that users are defecting to prediction markets.

Flutter argues that this has not been a primary reason for declining users. Still, the company estimates that prediction markets will have a “low single-digit” impact on future handle growth (handle is the total value of bets placed).

Rather, Flutter says that unusually favorable NFL outcomes for the company in Q4 2025 discouraged bettors. Essentially, bettors won less often than usual, causing them to stop betting in subsequent months, i.e., the first quarter. This is particularly true as FanDuel’s users skew more toward high-risk parlay bets than other platforms.

Flutter provided strong evidence to support this, saying that NFL gross revenue margins during Q4 were above average in 10 out of 11 weeks.

This is typically good for FanDuel, as it means keeping more of bettors’ money, even if it can be a headwind for engagement afterward.

Still, FanDuel noted that trends are improving. For example, AMPs were down 5% YOY in January, but grew 1% YOY in March. Additionally, handle fell by 10% YOY in January, but only 4% YOY in March. This is likely evidence of bettors coming back over time after licking their wounds. Overall, management’s commentary is reasonable, and pushes back on the idea that users are leaving in a significant way to prediction markets platforms.

The company is also rolling out features to mitigate future discouragement, including a loyalty program that rewards bettors for consistently wagering with points and rewards. Additionally, its Bet Protect+ offering allows bettors to pay a small fee to insure their bet, trading this for less upside if they win. Furthermore, the firm appointed Christian Genetski to lead FanDuel following the departure of Amy Howe.

Significant Potential in Flutter Remains After Q1 Report

Overall, Flutter’s results were encouraging, with the company taking real steps to address bettor churn on FanDuel.

These decisions can help the firm find the right balance between profitability and engagement among its parlay-heavy user base.

Flutter needs to treat its customer cohort with care, as prediction markets cannot easily replicate parlay-style bettingat scale. 

This is a key factor supporting the company’s outlook, as parlays are a highly margin-accretive revenue stream.

The MarketBeat consensus price target on Flutter sits just under $200, implying over 90% potential upside. 

It is worth noting that price target updates after the company’s report are much lower, averaging around $140. Still, this figure implies significant upside of more than 35%, and all analysts issuing updates kept a Buy or equivalent rating on the stock. READ THIS STORY ONLINE

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