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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 12 major stocks, including NVIDIA Corp. (NVDA), Duke Energy Corp. (DUK), and American Electric Power Co., Inc. (AEP), as well as a micro-cap stock MIND Technology, Inc. (MIND). 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.

NVIDIA’s shares have outperformed the Zacks Semiconductor - General industry over the year-to-date period (+168.5% vs. +119.6%). The company is benefiting from the strong growth of artificial intelligence (AI), high performance and accelerated computing. The data center end-market business is benefiting from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA Hopper and Ampere architectures. 

A surge in hyperscale demand and higher sell-ins to partners across the Gaming and ProViz end markets following the normalization of channel inventory are acting as tailwinds. Collaborations with Mercedes-Benz and Audi are likely to advance its presence in the autonomous vehicles and other automotive electronics space. 

The Zacks analyst expects NVIDIA’s revenues to witness a CAGR of 46.4% through fiscal 2025-2027. However, softening IT spending amid macroeconomic headwinds and the US-China tech war remain major concerns.

Shares of Duke Energy have outperformed the Zacks Utility - Electric Power industry over the past six months (+18.3% vs. +17.3%). The company remains a premier utility service provider that focuses on expanding its scale of operations and implementing modern technologies at its facilities. During the 2024-2028 period, the company plans to invest $73.4 billion to strengthen its grid and expand its renewable energy portfolio. 

As of Dec. 31, 2023, Duke Energy reduced its carbon emissions by 48% from the 2005 level. However, it holds a weak solvency position. Duke Energy’s unfavorable financial ratios make one further skeptical about its financial position. Its EV/Sales ratio came in higher than the industry’s level. 

The high interest rate environment in the United States remains a concern for Duke Energy. This may adversely impact its earnings growth and even constrict its future investment plans.

American Electric Power’s shares have outperformed the Zacks Utility - Electric Power industry over the past year (+37.8% vs. +30.9%). The company’s geographically diversified operations allow it to avail of transmission opportunities with better returns compared to its single-state utility peers. The company owns the U.S' largest electricity transmission system, with 40,000 circuit miles of transmission lines. 

To strengthen its grid, the company plans to invest $43 billion during the 2024-2028 period. Such investments should enable it to achieve a long-term earnings growth rate of 6-7%. Our model predicts total revenues to increase in 2024 to 2026 period. 

However, the stock holds a weak solvency position. New rules directed at fossil-fuel electric generation facilities may impact American Electric’s operating results. Moreover, the company may continue to incur rising interest expenses in the near future.

Shares of MIND Technology have underperformed the Zacks Technology Services industry over the past year (-18.3% vs. +47.9%). This microcap company with market capitalization of $5.4 million is facing risks which include supply chain disruptions, customer concentration, and market exposure to oil and gas cycles. Share dilution from the preferred stock conversion and competition from larger players remain concerns.

Nevertheless, MIND Technology's $26.2 million backlog as of July 31, 2024, up 50% YoY, provides strong revenue visibility into fiscal 2025, bolstered by demand for key products like GunLink and BuoyLink systems. MIND is expanding its market reach, capitalizing on the growing demand for marine seismic equipment, with a robust pipeline and recent orders in energy exploration. 

Operational efficiencies have improved profitability, with gross margins rising to 46% in the first half of fiscal 2025. The development of the Spectral Ai software suite diversifies its product offerings, targeting advanced analytics in marine tech. A debt-free balance sheet and solid working capital provide financial flexibility.

Other noteworthy reports we are featuring today include Williams-Sonoma, Inc. (WSM), Zillow Group, Inc. (ZG), and East West Bancorp, Inc. (EWBC).

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