2026-08-15 · data

Earnings Drive Both Bull and Bear Markets

Chicago, IL – August 13, 2026 – Zacks Equity Research shares Amphenol APH as the Bull of the Day and Pilgrim's Pride PPC as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Uber Technologies UBER, WeRide WRD and Amazon AMZN.

Amphenol Corporation, a Zacks Rank #1 (Strong Buy), has quietly become one of the most essential companies in the artificial intelligence buildout — and one of the best-executing large caps in the entire market.

While investors have fixated on the chipmakers, Amphenol supplies the connectors, cables, sensors and interconnect systems that make those chips usable inside a data center. Every AI server rack requires high-speed copper, fiber and power interconnects, and Amphenol makes essentially all of it. The stock's top rating reflects a powerful wave of upward earnings estimate revisions, historically the most reliable force driving share prices higher.

Shares have been in a sustained uptrend, gaining roughly 57% over the past year and about 27% year-to-date — comfortably outpacing the S&P 500's 22% and 13% respective returns over those periods. That kind of persistent relative strength, backed by accelerating fundamentals, is exactly what we look for.

Amphenol is part of the Zacks Electronics – Connectors industry group, which currently ranks in the top 3% out of approximately 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months, just as it has over the past year:

The industry's positioning has been driven by a positive earnings outlook for its constituent companies in aggregate — a powerful foundation that should lead to higher prices in the future. Historical research studies suggest that approximately half of a stock's price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.

It's no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.

Founded more than 90 years ago and headquartered in Wallingford, Connecticut, Amphenol designs and manufactures connectors, cables, antennas, sensors and interconnect systems used across virtually every industry on earth. Its end markets span IT datacom, communications, automotive, industrial, commercial aerospace, defense, mobile devices and broadband — an unusually diversified base that has historically cushioned the company through market downturns.

What separates Amphenol from a typical component supplier is its disciplined acquisition machine. Management has spent decades acquiring niche interconnect businesses and integrating them into a decentralized operating model that preserves entrepreneurial accountability.

The most consequential recent example is the CommScope connectivity and cable business, and the early returns have been striking: management raised its full-year expectations for the acquired operation to $4.6 billion in sales and 30 cents of adjusted EPS accretion, up sharply from prior guidance of $4.1 billion and 15 cents. That is the sort of upside revision that signals integration is running well ahead of plan.

The second quarter, reported in late July, was a genuine blowout. Amphenol delivered record adjusted earnings of $1.35 per share, up 66.7% year over year and beating the Zacks Consensus Estimate of $1.19 by 13.5%. Revenues surged 55% to a record $8.76 billion, topping the consensus mark by 5.5%, with organic growth of over 30% and acquisitions contributing another 24 percentage points.

Communications Solutions led the way with 42% organic growth on exceptional IT datacom demand. Profitability expanded alongside the volume: adjusted operating margin reached a record 29.8%, up 420 basis points year over year.

The forward-looking indicators were even better than the quarter itself. Orders hit a record $10.7 billion, producing a book-to-bill ratio of 1.23:1 — meaning Amphenol is booking business considerably faster than it can ship it. For the third quarter, management guided revenues to $9.3–$9.4 billion, implying 50–52% growth, with adjusted EPS of $1.40–$1.42, up 51–53%.

Analysts have responded emphatically. Over the last 30 days, estimates have moved higher, lifting the full-year Zacks Consensus EPS Estimate by 11.7%. The consensus now stands at $5.25 per share, representing 57% growth.

Amphenol has now surpassed the Zacks Consensus Estimate in each of the last four quarters, delivering an 11.8% average beat over that timeframe. Capital returns remain robust as well, with $208 million in share repurchases and $307 million in dividends returned during the latest quarter.

Amphenol has been one of the cleanest uptrends among large-cap technology names. This is exactly the kind of stock we want to include in our portfolio — one that is trending well and receiving positive earnings estimate revisions.

Notice how shares reside above upward-sloping 50-day (blue line) and 200-day (red line) moving averages, a hallmark of a healthy bull trend, with the stock advancing on strong volume following the July earnings report. Momentum has built steadily throughout 2026.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Amphenol has recently witnessed sharp upward revisions. As long as this trend remains intact (and APH continues to deliver earnings beats), the stock will likely continue its bullish run.

Backed by a leading industry group and a flawless record of recent earnings beats, it's not difficult to see why this interconnect powerhouse has captured investor attention. Currently, APH sports the highly coveted Zacks Rank #1 (Strong Buy), placing it in the top 5% of Zacks-covered stocks on estimate revisions.

With a record backlog, expanding margins, an acquisition integrating ahead of plan, and consensus estimates marching higher, the setup is compelling. If you haven't already done so, be sure to put Amphenol on your watchlist.

Pilgrim's Pride Corporation is one of the world's largest chicken producers, processing and distributing fresh, frozen and value-added poultry products to retailers, foodservice operators and distributors across the United States, Mexico and Europe.

Majority owned by Brazilian meat giant JBS, the company also markets branded offerings including Just Bare and Pilgrim's, and has invested heavily in prepared foods capacity in an effort to smooth out the notoriously volatile economics of commodity chicken.

That volatility is precisely the problem. Pilgrim's earnings are ultimately hostage to the spread between chicken prices and feed costs — a spread the company does not control. When commodity cutout values are elevated, the operating leverage is spectacular. When they roll over, it works just as violently in reverse. Right now, it is working in reverse.

The core issue is a sharp, counter-seasonal collapse in the jumbo commodity cutout market, where values fell more than 25% year over year. Higher domestic chicken production, increased import volumes, greater egg availability and additional pork imports have combined to pressure pricing across the protein complex.

Consumer demand for chicken has actually held up well — management has been clear that affordability continues to resonate at retail and foodservice — but firm demand cannot offset a pricing environment this weak. Notably, management declined to provide specific numerical guidance for the third quarter or full year, which is rarely a sign of confidence.

Pilgrim's Pride has been a clear laggard, with shares down roughly 31% year to date against a 13% gain for the S&P 500. A Zacks Rank #5 (Strong Sell), PPC reflects sharply unfavorable earnings estimate revision trends.

Shares are part of the Zacks Food – Meat Products industry group, which currently ranks in the bottom 1% of approximately 250 industry groups. Stocks in the bottom half of Zacks Ranked Industries face a persistent headwind, and while individual names can outperform a weak group, the industry association tends to cap the size and durability of any rally.

Compounding the problem, this is a business with structurally thin margins even in good times. Trailing gross margin has run near 11.6%, leaving virtually no cushion when commodity pricing turns against the company. With much better alternatives available in the current market environment, this stock should be avoided.

Cracks in the Foundation: Earnings Misses and Collapsing Profitability

The second quarter, reported in late July, was ugly on every line that matters. Pilgrim's posted adjusted earnings of 64 cents per share, missing the Zacks Consensus Estimate of 75 cents and collapsing 62.4% from $1.70 in the year-ago period.

Net sales fell 2.8% to $4.63 billion and missed the consensus mark by 5.59%. Gross profit was cut roughly in half, dropping 52.5% to $339.8 million as cost of sales actually rose to $4.29 billion from $4.04 billion — the textbook definition of a margin squeeze.

The margin destruction is the real story. Adjusted EBITDA fell 47.6% to $360 million, with the margin compressing to 7.8% from 14.4% a year earlier. GAAP operating income collapsed to just $66 million, a 1.4% margin, versus $512 million and 10.8% in the prior-year quarter.

The pattern is not new. Pilgrim's has topped consensus revenue estimates just once over the last four quarters. Estimates for the current year have been marked down repeatedly through 2026. The full-year EPS consensus stands at $2.95 per share, reflecting a 43% decline relative to last year. These are precisely the types of negative trends that the bears like to see.

PPC stock has been carving out a well-defined downtrend. Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping lower, with shares trading below them near the lower end of the 52-week range.

The persistent decline has produced a classic "death cross," wherein the 50-day moving average crosses below the 200-day moving average — a bearish technical signal that often precedes further weakness. Shares would need to mount a serious, high-volume move to the upside and show improving earnings estimate revisions to warrant taking any long positions in the stock.

Management is doing what it can, investing in plant upgrades, prepared-foods capacity and branded growth in an effort to build a more resilient earnings profile. Those initiatives are sensible, but they are long-dated, and they are nowhere near large enough to offset a collapse in commodity cutout values across the core business.

A deteriorating fundamental and technical backdrop show that this stock doesn't deserve a spot in household portfolios right now. Falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock's downtrend, and the absence of forward guidance removes the one catalyst that might have reset expectations.

Uber's AV Ambitions in London Receive a Boost: Here's How

Uber Technologies and Wayve have moved closer to introducing autonomous rides in London after Transport for London (TfL) awarded Private Hire Vehicle licenses to several of Wayve's self-driving, all-electric Ford Mustang Mach-E vehicles. Equipped with the Wayve AI Driver as well as surrounding cameras and radar, the vehicles underwent inspections to verify compliance with TfL's safety and policy requirements.

The approvals satisfy the vehicle component of the "triple-lock" requirement for Private Hire journeys, under which the operator, driver and vehicle must be licensed by the same authority. The rides will operate in accordance with the U.K. Government's AV Trialing Code of Practice and Uber's TfL Private Hire Operator license. Although Wayve's technology will handle the driving, a trained, TfL-licensed private hire driver will remain onboard to supervise each journey, provide assistance and assume control when necessary.

Interest among London residents has been significant, with more than 100,000 people joining Uber's Interest List over the past eight weeks for an opportunity to be matched with a Wayve autonomous ride when the service launches. Later this summer, selected participants will be offered rides and asked to provide feedback, helping the companies refine the experience ahead of a broader public rollout.

Wayve views the license as an important step toward allowing Londoners to experience autonomous driving while supporting the longer-term potential for safer, cleaner and quieter streets. Uber similarly considers the approval a key milestone in introducing autonomous rides in the capital, with the strong response to its Interest List demonstrating considerable public interest in Wayve's U.K.-developed technology.

Wayve's AI-first AV2.0 system differs from conventional autonomous-driving technologies that depend on high-definition maps, predefined rules or tightly geofenced operating areas. The AI Driver instead learns from experience, allowing it to adjust to different roads, vehicles, weather and cities. Developed and trained on U.K. roads, the technology has been tested on London's complex streets since 2018 and has demonstrated its adaptability across more than 500 cities globally.

The development is in line with Uber's strategy of integrating autonomous vehicles into its mobility platform alongside human drivers. With more than 30 autonomous-vehicle partners and millions of autonomous journeys completed annually, adding Wayve-powered rides in a major market such as London could accelerate Uber's hybrid-network ambitions. A successful rollout could expand autonomous ride availability, improve network efficiency and support Uber's objective of making transportation more affordable, sustainable and accessible. It could also provide valuable operational and rider-feedback data that may help Uber refine autonomous mobility deployments in other markets.

Taking a Look at Some Other AV Deals of Uber

In June, Uber, in collaboration with WeRide, a Chinese autonomous vehicle company, announced plans to introduce commercial robotaxi services in the Greater Zurich Region. This move represents their second joint deployment in Europe, coming just weeks after the announcement of a similar initiative in Madrid.

The service is expected to commence later this year in partnership with Switzerland's Federal Roads Office ("FEDRO"), pending regulatory approvals. At launch, passengers will be able to access the robotaxi service through the Uber app. The launch builds on the partners' growing track record in autonomous mobility.

Since December 2024, WeRide and Uber have introduced robotaxi services across several Middle Eastern markets, including fully driverless commercial operations in Abu Dhabi and Dubai, as well as public services in Riyadh. These deployments provide an operational foundation for their European expansion. In November 2024, WeRide obtained a driverless permit from FEDRO, allowing autonomous vehicle operations on public roads in Zurich's Furttal region.

Earlier in the year, Uber entered into a strategic partnership with Amazon's Zoox to deploy its purpose-built robotaxis on the former's platform. The Amazon unit's robotaxis differ from many other autonomous vehicles currently in development because they are not modified versions of traditional passenger cars. Instead, the vehicles are purpose-built specifically for ride-hailing services and designed to enhance rider comfort and social interaction. The Amazon unit and Uber indicated that Zoox rides are expected to be available in Los Angeles next year.

UBER's Share Price Performance, Valuation and Estimates

Shares of UBER have gained in double digits over the past six months. Despite the impressive performance, UBER's shares have underperformed the Zacks Internet-Services industry over the same time frame.

From a valuation standpoint, UBER trades at a 12-month forward price-to-sales of 2.51X. UBER is inexpensive compared with its industry.

Uber currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Amphenol Corporation (APH): Free Stock Analysis Report

Pilgrim's Pride Corporation (PPC): Free Stock Analysis Report

WeRide Inc. (WRD): Free Stock Analysis Report

Uber Technologies, Inc. (UBER): Free Stock Analysis Report

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