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The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Apple Inc. (AAPL), Alphabet Inc. (GOOGL) and Cisco Systems, Inc. (CSCO), as well as two micro-cap stocks Hovnanian Enterprises, Inc. (HOV) and Perma-Pipe International Holdings, Inc. (PPIH). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

Apple’s shares have outperformed the Zacks Computer - Micro Computers industry over the past six months (+6.6% vs. +6.2%). The company is benefiting from strong growth in Services revenues. It now has more than 1 billion paid subscribers across its Services portfolio, more than double what it had four years ago.

The expanding content portfolio of Apple TV+ and Apple Arcade helped in driving subscriber growth. Apple expects the December quarter’s (first-quarter fiscal 2025) revenues to grow low to mid-single digits on a year-over-year basis. For the Services segment, Apple expects a double-digit growth rate similar to fiscal 2024.

Introduction of Apple Intelligence, an advanced personal intelligence system seamlessly integrated into iOS 18, iPadOS 18 and macOS Sequoia will help Apple shares to push higher. However, weakness in iPhone sales, particularly in China, is a concern. Increasing regulatory headwinds is a concern for investors.

Shares of Alphabet have outperformed the Zacks Internet - Services industry over the past year (+38.6% vs. +33%). The company is riding on strong cloud and search growth. Google Cloud is benefiting from accelerated growth across AI infrastructure, enterprise AI platform Vertex, generative AI solutions and core Google Cloud Platform products.

GOOGL’s strong AI portfolio is helping it attract new customers, win larger deals, and deepen product adoption among existing customers. Alphabet’s expanding GenAI capabilities present a potential catalyst for future growth. Its dominant position in the search engine market is a strong growth driver.

Major search updates and removal of bad ads to enhance search results continue to boost traffic on Google’s search engine. GOOGL outperformed its industry in the trailing 12 months. However, increasing litigation issues and expenses remain concerns. Rising competition from Microsoft and Amazon is a headwind.

Cisco shares have narrowly outperformed the Zacks Computer - Networking industry over the past year (+21% vs. +20.2%). The company’s business model has evolved with subscription revenues accounting for more than half of its total revenues. Its Splunk acquisition enhances its recurring revenue base.

The buyout significantly expands Cisco’s portfolio of software-based solutions, contributing more than $4 billion in ARR and makes it one of the largest software companies in the world. The launch of AI-powered Hypershield, which combines security and networking, strengthened Cisco’s security portfolio.

However, the company has been suffering from sluggish networking sales, primarily due to lackluster demand from telecommunication and cable services providers, as well as stiff competition. Cisco’s prospects are further challenged in the AI-driven networking space due to stiffening competition aggravated by Hewlett Packard’s deal to acquire Juniper.

Shares of Hovnanian have underperformed the Zacks Building Products - Home Builders industry over the past year (-27.6% vs. -4%). This microcap company with market capitalization of $749 million is facing profitability issues due to declining margins and heavy reliance on incentives to drive affordability. Elevated land investments and regional concentration increase vulnerability to market fluctuations.

Reliance on incentives heightens financial risks, while competition and external disruptions threaten growth and market position. Nevertheless, Hovnanian has demonstrated strong revenue growth and operational efficiency, capitalizing on resilient housing demand and effective sales strategies.

The company’s focus on expanding its community footprint and quick move-in homes positions it for sustained growth. Strategic land investments boost growth, while cost discipline sustains profitability. With a commitment to aligning growth initiatives with market trends, Hovnanian is well-positioned to deliver strong returns and shareholder value.

Perma-Pipe International’s shares have outperformed the Zacks Steel - Pipe and Tube industry over the past year (+49.3% vs. +26.8%). This microcap company with market capitalization of $106.85 million has a backlog which grew 33% to over $100 million by November, reflecting strong demand in key markets like oil and gas and district energy. Geographic diversification, including $61 million in recent contracts across MENA and the Americas, reduces regional risks while positioning the company for growth in energy and infrastructure.

Its focus on high-growth markets aligns with robust infrastructure development, supported by proprietary technologies like the XTRU-THERM insulation system, bolstering market leadership. The company’s tailored solutions cater to high-margin sectors, ensuring operational resilience.

Long-term demand is underpinned by global steel pipe market growth, fueled by investments in infrastructure and urbanization. However, exposure to cyclical markets, intense competition, geopolitical risks and regulatory compliance costs present challenges.

Other noteworthy reports we are featuring today include HSBC Holdings plc (HSBC), The Charles Schwab Corp. (SCHW) and Cintas Corp. (CTAS).

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