Written by Jeffrey Neal Johnson

A staggering 64% single-day stock appreciation on more than 30 times the average trading volume is rarely a quiet event. For storage cloud platform Backblaze, Inc. (NASDAQ: BLZE), the explosive move following its first-quarter earnings report signals more than just a momentary triumph; it points to a fundamental re-rating by the market.

Institutional capital appears to be aggressively targeting Backblaze’s deep structural cost advantage and its pivotal role in the artificial intelligence (AI)infrastructure landscape. The company is fueled by a triad of catalysts: exponential data growth from multimodal AI, a revamped go-to-market (GTM) engine, and a clear line of sight to free cash flow positivity. Driven by these catalysts, Backblaze is methodically stripping market share from incumbent hyperscalers. For investors, understanding this dynamic is key to navigating Backblaze’s next phase.

Backblaze’s Strategic Neocloud Advantage

The primary driver behind this re-evaluation is Backblaze’s positioning as a critical infrastructure partner for the emerging Neocloud market. As severe supply chain constraints on GPUs and high-performance memory hamstring legacy hyperscalers, AI developers are increasingly turning to a decentralized ecosystem of specialized cloud providers for compute resources. This macro-headwind for giants like Amazon.com , Inc. (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT) has become a powerful tailwind for Backblaze.

AI workloads, particularly in the training phase of large language and diffusion models, generate massive, bursty data transfers. Developers require an open, low-cost data lake that can store petabytes of data and rapidly deploy it to any Neocloud platform with GPU capacity. Backblaze has become this mission-critical data layer.

Backblaze’s traction in this segment is accelerating. In Q1, the AI customer count surged 76% year-over-year (YOY), driven by two new generative AI contracts totaling $1.5 million in annual contract value. Management now estimates its total addressable market within the Neocloud data lake tier alone will reach $14 billion by 2030, a substantial runway for growth. Backblaze is actively building for this demand, replacing 100-gigabit network links with 400-gigabit connections to handle the elephant flows characteristic of AI model training.

From Consumer Backup to Enterprise Beast

Historically perceived as a consumer-focused backup service, Backblaze has undergone a significant GTM transformation to attack the enterprise and AI opportunity. A key move was the recent appointment of Anuj Kumar as Chief Revenue Officer. Kumar brings a wealth of experience scaling enterprise cloud infrastructure sales from his time at industry heavyweights such as NetApp, Inc. (NASDAQ: NTAP), VMware, and Red Hat.

This new leadership is institutionalizing a more disciplined and aggressive sales motion. Initiatives like the Flamethrower startup program and a new partnership with Andreessen Horowitz’s founder resource program are systematically embedding Backblaze within the venture-backed tech ecosystem. This proactive approach is designed to capture high-growth companies early in their lifecycle, a strategy already bearing fruit with a 72% YOY growth in customers generating over $50,000 in annual recurring revenue (ARR). The total company ARR now stands at $158.2 million, up 13% YOY, with the core B2 Cloud Storage segment’s ARR growing at a robust 28% clip.

How Backblaze’s Economics Are Disrupting the Cloud Giants

Backblaze’s foundational appeal is its disruptive unit economics. Following a pricing and packaging overhaul effective May 1, 2026, Backblaze’s B2 Cloud Storage is priced at a fraction of what its larger competitors charge. While hyperscalers can charge upwards of $20 per terabyte per month and levy significant data egress fees, Backblaze offers a simplified, more predictable model. This structure eliminates API transaction fees and provides generous free egress, a critical factor for AI companies that must constantly move large datasets between storage and compute environments without incurring punitive costs.

This competitive advantage is now translating into expanding operating leverage. Q1 results showcased this inflection.

Revenue: $38.7 million, beating consensus estimates and representing 12% YOY growth.
B2 Cloud Storage Revenue: Grew 24% YOY, becoming the clear engine of the business.
Adjusted EBITDA: Reached $10.1 million, for a 26% margin, a healthy expansion from the 18% margin reported in Q1 2025.
B2 Net Revenue Retention (NRR): A solid 110%, demonstrating strong expansion within its existing customer base.

Crucially, management provided clear guidance for a pivotal financial milestone. Despite pulling forward capital expenditures from 2027 into 2026 to meet surging demand, Backblaze projects it will achieve positive adjusted free cash flow in the second half of the year. This transition to self-funded growth significantly de-risks the investment narrative and signals a new phase of financial maturity.

Trading the Afterburn: Charting the Next Move for Backblaze

The 64% surge in Backblaze, Inc.’s stock price was not an anomaly but a market acknowledgment of a rapidly strengthening fundamental story. With powerful AI tailwinds, a maturing enterprise sales organization, and a clear trajectory toward sustained profitability, Backblaze appears well-positioned to continue its assault on the cloud storage market.

However, a single-day move of this magnitude introduces significant near-term volatility. Prudent investors might consider the technical landscape. Rather than chasing the initial explosive candle, a more disciplined approach may be to watch for the stock to consolidate its gains, potentially forming a multi-day or multi-week flag pattern. Such a consolidation would allow the market to digest the new information and could provide a more structured entry point for those looking to capitalize on Backblaze’s long-term growth thesis. READ THIS STORY ONLINE

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The AI Fear Around Datadog Stock May Have Been Completely Wrong

Written by Thomas Hughes

Datadog (NASDAQ: DDOG) is a great example of why investing based on emotion, contrary to fundamentals, is such a bad idea. Fear of a Software-as-a-Service (SaaS) AI disruptionhelped to drive Datadog stock to long-term lows, despite its bullish fundamentals. Now, Datadog is not only still outperforming, but the SaaS fears seem to have been completely misplaced. AI isn’t disrupting business for this and other software-specific companies; it’s accelerating it, and the runway for growth remains robust. Agentic AI is now the name of the game, and it is in its earliest phases of adoption.

Datadog Is Barking Up the Right Tree in Q1

Datadog’s Q1 2026 earnings resultsprove that it has been barking up the right tree. The company’s revenue growth accelerated to over 32%, outpacing the consensus estimate by more than 500 basis points (bps), producing the first-ever billion-dollar quarter.

Growth was driven by new clients, with large contributors increasing by 21% and compounded by service penetration. New products are also a driver, including AI and datacenter-specific tools aimed at easing deployments, management, and security outcomes.

Margin was another area of strength. The revenue surge and operational quality produced significant margin improvement, with net income more than doubling on a GAAP basis, and adjusted operating income growing by 34%.

More importantly, adjusted income outpaced the consensus by more than 1,750 bps, and earnings strength is expected to continue in the upcoming quarters.

DDOG stock shot up by 30% in premarket trading following earnings, largely due to management’s forward guidance. Business momentum led management to increase guidance for Q2 and the year, indicating strengths will persist.

Agentic AI is expected to accelerate over the coming quarters, as data center capacity improves, models are trained, and inference gains traction. In this scenario, Datadog’s growth may accelerate over the coming years, setting the stage for a sustained bullish revision cycle across revenue, earnings, and price targets. As it stands, DDOG trades at less than 15X its 10-year earnings forecast, suggesting a 50% upside is possible, relative to its critical resistance, the all-time high set in 2021.

Analysts Respond With Cautious Optimism

Analysts were cautious with their response but are optimistic about Datadog’s future. They cited the strong revenue growth and guidance, along with the latest FedRAMP certification, which promises to drive growth in both public and private business. The FedRAMP High authorization is among the highest designations for government cloud providers, enabling the security of sensitive but not classified documents. The move affirms Datadog’s utility, opening the door to a wider range of government business, while providing visible reassurance to commercial business and investors.

As it stands, the consensus price target suggests DDOG is fairly valued near the high-end of its trading range, but recent analyst revisions are more bullish. They put DDOG above the $200 market and at a fresh all-time high.

This is significant as a move to fresh all-time highs would break DDOG stock out of a trading range and brings aggressive targets into play. In this scenario, DDOG could experience a dynamic shift in which price headwinds become tailwinds, amplifying upside potential. The base case would be a move equal to the trading range, setting the long-term target at approximately $220, potentially reached within 12 to 18 months of the fresh high.

Institutions are a risk. The group owns a substantial 80% of the shares and has been distributing on a trailing 12-month basis. They run a high $2.5-to-$1 balance and will likely sell into the rally, given the rapid 30% stock price increase and the potential to take profits. Early price action reflects resistance at the critical level and an uncertain market, so how much institutions sell is critical. Assuming the guidance update is sufficient to invigorate a more bullish posture, DDOG should move to fresh highs quickly; if not, investors should prepare for a price correction, potentially closing the gap that formed upon the release, before any fresh high is reached.

Datadog Balance Sheet Is a Reason to Own This Stock

Datadog’s balance sheet reflects the business quality and strength, with cash and assets rising, outpacing the increase in liabilities, and equity following suit. The critical takeaways include $4.8 billion in cash and marketable assets, low total leverage, with equity nearly doubling total liabilities, and a net cash position. The company is in a fortress-like position, capable of executing strategy and on track to initiate capital returns within the next few years. The biggest risk for DDOG stock is persistently high near-term valuations, but the company continues to prove its worth. READ THIS STORY ONLINE

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3 REITs to Watch as AI Data Center Spending Surpasses Office Construction

Written by Jessica Mitacek

The proliferation of artificial intelligence (AI) has resulted in abundant market opportunities.

From NVIDIA (NASDAQ: NVDA) to Micron Technology (NASDAQ: MU), AI stocks have shown their ability to not just outperform the market, but to do so by leaps and bounds.

While pure-play AI stocks’ performances and record Magnificent Seven CapEx allocations have provided a glimpse into this megatrend, one remarkable feat demonstrates just how impactful AI growth has become.

The AI-driven acceleration of data center construction has resulted in spending that now surpasses the total spending on office building construction. This presents a unique opportunity tailored for income investors who are looking for yield and AI growth exposure—something that each of the following three real estate investment trusts(REITs) provides.

Data Center Spending Surges as Office Construction Lags

Alongside AI and cloud computing demand, data center construction reached a record annualized rate of $45 billion in December 2025. For the first time ever, that figure exceeded private office construction, which fell to $44 billion.

While that landmark accomplishment was years in the making, demand for data centers is unlikely to abate. Industry consultancy firm Grand View Research forecasts the global data center market—estimated at $383.82 billion in 2025—to reach $902.19 billion by 2033, implying a compound annual growth rate (CAGR) of 11.3% from 2026 to 2033.

The North America data center segment alone, which accounts for more than 38% of the global total addressable market, is projected to grow at a CAGR of 10.5% during the forecast period. By comparison, the office building construction market is expected to undergo a CAGR of 8.5% through 2033, suggesting that this disparity is just getting started.

A Mountain of Potential From a Legacy Data Manager

Founded in 1951, Iron Mountain (NYSE: IRM) converted to a REIT in 2014.

As it expanded from legacy records management company to colocation data center operator, the 75-year-old company has amassed 240,000 customers spanning 61 countries, including 95% of Fortune 1000 members.

The REIT continues to help organizations unlock value through services, including information management, digital transformation, information security, and data center/asset lifecycle management needs.

While REITs are known for generating yield, Iron Mountain is the quintessential example of how a data center REIT can simultaneously offer strong dividends and growth. Over the past month, shares have gained nearly 28%, contributing to a year-to-date (YTD) gain of more than 60%.

Meanwhile, the trust’s dividend currently yields 2.67%, or $3.46 per share annually, with an annualized five-year growth rate of 5.45%.

Big Tech’s Big Data Center Partner

Digital Realty Trust (NYSE: DLR) is a REIT that owns, acquires, and operates carrier-neutral data centers and provides colocation and interconnection services.

Its focus is on large-scale, mission-critical facilities that support the physical infrastructure needs of cloud providers, enterprises, network operators, and content companies.

That has resulted in partnerships with exceptionally large tech companies, including NVIDIA, Oracle (NYSE: ORCL), Dell Technologies (NYSE: DELL), and Advanced Micro Devices (NASDAQ: AMD), as Digital Realty has become synonymous with wholesale data center space, turnkey facilities, and retail colocation suites.

The REIT hosts NVIDIA’s AI Factory Research Center in Northern Virginia and has partnered with Advanced Micro Devices on the Digital Realty Data Center Innovation Lab—a so-called AI sandbox, “hands-on facility where partners, enterprises, and customers can test and prove AI deployments in a real colocation environment,” according to the company.

Shares of DLR have seen a YTD gain of more than 29%, and its dividend currently yields 2.5%, or $4.88 per share annually.

The World’s Largest Data Center REIT

With a market cap of nearly $108 billion, Equinix (NASDAQ: EQIX) is the world’s largest data center REIT.

After converting to a trust on Jan. 1, 2015, it provides digital infrastructure and interconnection services, while specializing in carrier-neutral data centers and colocation.

Like Digital Realty, Equinix operates a platform that enables enterprises, cloud and network service providers, and content companies to colocate IT infrastructure, interconnect directly with partners and providers, and access cloud on-ramps and network services in a secure, low-latency environment.

Today, the REIT boasts more than 280 data center locations on six continents. Its data center operations serve customers that range from large multinational enterprises to cloud providers and telecommunications operators. Equinix emphasizes interconnection density and ecosystem partnerships as differentiators in enabling digital transformation and low-latency connectivity.

Shares of EQIX are up more than 43% this year, and the REIT’s dividend currently yields 1.92%, or $20.64 per share annually. That yield may be lower than the other two REITs on this list, but Equinix has increased its distribution for 10 years consecutively, while its annualized five-year growth rate of 12.01% surpasses both Iron Mountain and Digital Realty. READ THIS STORY ONLINE

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Netflix, Pulte, and Mobileye Are Buying Their Own Dips—Should You?

Written by Leo Miller on May 4, 2026

Key Points

Netflix is down more than 30% from its highs, and is likely looking to take advantage of this through its new $25 billion buyback plan.
Pulte Group stepped up its buyback spending last quarter and has increased its repurchase firepower.
Autonomous driving stock Mobileye has taken a huge hit and just announced a $250 million buyback plan.
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Struggling stocks are signaling confidence ahead, recently announcing substantial share buyback authorizations. These names are looking to buy shares at what they likely view as depressed prices, providing positive signals to investors going forward.

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Netflix’s Buyback Capacity Hits 8% of Market Capitalization

First up is streaming giant Netflix (NASDAQ: NFLX). Netflix shares have seen considerable volatility over the recent past. The stock took big hits after Netflix announced its intention to acquire Warner Bros. Discovery (NASDAQ: WBD). After the deal fell through, Netflix shares managed to rebound above pre-merger announcement levels. However, the stock tanked again after Netflix released its latest earnings report, with the company providing underwhelming guidance.

Now, it looks as though Netflix is trying to pick up some of the slack in its stock price. Around a week after reporting earnings, Netflix authorized a $25 billion share repurchase plan. This adds to the company’s $6.8 billion in remaining buyback capacity held under its December 2024 repurchase authorization. In total, Netflix’s buyback capacity now sits near $31.8 billion. This is very substantial, equal to around 8% of the firm’s approximately $390 billion market capitalization.

Notably, Netflix did not provide a specific reason for its buyback capacity increase, and the program does not have an expiration date. However, given the size of the program, it is likely that Netflix sees value in its falling share price. Currently, Netflix is down just over 30% from its 52-week high.

Pulte Signals High Buyback Spending to Continue

PulteGroup (NYSE: PHM) is another large consumer discretionary name, being one of the top homebuilders in the United States. Pulte shares have been largely stagnant in 2026, providing a slight year-to-date (YTD) loss.

Homebuilders have been in a difficult position, with sales and earnings falling considerably. Still, Pulte avoided a sell-off following its latest report, rising 2.4% afterward.

This came despite sales falling 12% year-over-year (YOY) and adjusted earnings per share falling 30% YOY, showing that the market has priced in very low expectations.

Alongside its earnings, Pulte announced a $1.5 billion increase to its buyback authorization, bringing its total buyback capacity to $2.1 billion.

This is equal to over 9% of the firm’s approximately $23 billion market capitalization, giving it a significant ability to continue lowering its outstanding share count.

Since 2013, Pulte has spent billions on buybacks and cut its outstanding share count in half. The firm’s buyback spending last quarter was $345 million. This was a notable 15% increase over the prior quarter and good for Pulte’s second-highest quarterly buyback spending ever.

The company’s new authorization indicates that its buybacks could continue at this strong pace over the coming quarters.

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Mobileye Announces $250 Million Buyback With Shares Down Big

Last up is Mobileye Global (NASDAQ: MBLY). The company provides advanced driver assistance systems (ADAS) and autonomous driving technologies. As an automobile components company, Mobileye sits within the broader consumer discretionary sector. Mobileye shares have faced serious pressure lately, down over 15% in 2026 and more than 40% in the last 12 months.

Mobileye has seen very inconsistent sales growth over this period. The firm has recorded YOY sales shifts as high as 83% and as low as -9% during the past five quarters. This has contributed to significant margin volatility, with adjusted operating margins fluctuating between 21% and 9%.

However, Mobileye’s expected eight-year automotive revenue pipeline ended 2025 at $24.5 billion. This compares to its last 12 months’ revenue of $2.01 billion, signaling a significant opportunity ahead.

Mobileye has also announced a $250 million share buyback program, which is equal to over 3% of its approximately $7.4 billion market capitalization. The firm intends to use the authorization to partially reduce dilution from its recent acquisition of Mentee Robotics.

However, the company also said it sees “an opportunity” to address this dilution at “significantly more attractive prices than those embedded at closing.” Overall, the company likely sees a level of value in its share price, even though the buyback decision relates directly to the Mentee deal.

Analysts Eye Gains Ahead for Netflix, Pulte, and Mobileye

While buyback authorizations do not necessarily mean these names are due for a rebound, they are important indicators worth paying attention to. Looking ahead, MarketBeat consensus price targets imply over 20% upside in NFLX, over 20% upside in PHM, and over 60% upside in MBLY.

Read this article online ›

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May 06, 2026

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Eli Lilly’s Numbers Are Exceptional

Eli Lilly and Company (LLY) entered 2026 as one of the most watched large-cap equities on the planet – and the first four months have done nothing to quiet the conversation. After a significant pullback from its all-time high of $1,133.95 that took shares down toward the low-$600s earlier this year, LLY has staged a forceful recovery. As of May 6, 2026, the stock is trading near $988, powered by a Q1 earnings report that wasn’t just good – it was the kind of print that resets the analytical conversation entirely.

The Macro Backdrop: A Different Picture Than Earlier This Year

The macro environment has shifted meaningfully from the first-quarter pressure that drove high-multiple healthcare names lower. The Federal Reserve held the federal funds rate steady at 3.5% to 3.75% at its April 28–29 FOMC meeting – the third consecutive hold – following a series of rate cuts executed in late 2025. The 10-year Treasury yield is hovering near 4.39% to 4.44%, down from the more elevated levels that compressed growth multiples earlier in the year. That’s still not zero, but it’s a meaningfully different backdrop than what was pressuring the stock in Q1.

The Fed meeting itself was notable for internal friction – the April decision saw four dissenting votes, the most since 1992, with debate centering on whether additional rate increases might be warranted if inflation data deteriorates further. Middle East tensions have introduced an energy price wildcard that is keeping the Fed cautious. That uncertainty hasn’t disappeared, but market participants appear to have largely priced it in. For now, growth-oriented healthcare names are getting their footing back. Sponsored

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Q1 2026 Results: The Numbers Are Hard to Argue With

Lilly reported Q1 2026 results on April 30, and the print was exceptional by almost any measure. Total revenue came in at $19.8 billion, up 56% year-over-year, driven by volume growth that outpaced even the most optimistic sell-side models. Adjusted EPS hit $8.55, against a consensus expectation of $6.66. Shares rose more than 10% in afternoon trading the day of the release.

Mounjaro global revenue reached $8.66 billion in the quarter, more than doubling year-over-year. U.S. revenue was $4.2 billion (+59%), with international contributing $4.4 billion – up from just $1.2 billion in Q1 2025, driven by expansion into Europe, China, and Brazil.
Zepbound U.S. revenue hit $4.16 billion, up 80% from the year-earlier period, beating analyst estimates of $4.04 billion. Volume surged even as realized prices declined on lower cash-pay pricing.
Combined Mounjaro and Zepbound revenue totaled $12.8 billion for the quarter – a franchise that, annualized, would rank among the largest revenue-generating product lines in pharmaceutical history.
Gross margin came in at approximately 81.9% on a reported basis, slightly lower year-over-year due to pricing pressure, but still exceptional in absolute terms and consistent with Lilly’s premium profile.
Lilly holds 60.1% share of the U.S. obesity and diabetes GLP-1 market, versus Novo Nordisk’s 39.4%, according to the company’s own earnings presentation.

Following the beat, Lilly raised its full-year 2026 revenue guidance to $82 billion to $85 billion, up $2 billion from the prior range. Full-year adjusted EPS guidance was lifted to $35.50 to $37.00, from $33.50 to $35.00. International expansion – particularly in markets where patients are paying out of pocket across Europe, China, and Brazil – is now hitting stride and represents a material new growth driver that wasn’t a significant contributor twelve months ago.

Foundayo: The Oral GLP-1 Launch Changes the Narrative

One of the biggest structural developments in the Lilly story is no longer a future catalyst – it’s already happening. The FDA approved Foundayo (orforglipron) on April 1, 2026, making it the only GLP-1 pill approved for weight loss that can be taken any time of day without food or water restrictions. Retail pharmacy availability began April 9. More than 20,000 people started taking Foundayo in the first few weeks after launch, and commercial copays were structured as low as $25 per month for insured patients.

Slight tangent, but it matters: Foundayo is a small molecule, which means it doesn’t require refrigeration, complex administration, or the cold-chain infrastructure that has constrained injectable GLP-1 distribution globally. CEO Dave Ricks has been explicit that Foundayo is the vehicle for scaling Lilly’s reach to markets where Zepbound logistics are prohibitive. That’s not a two-quarter story – it’s a multi-year expansion opportunity that is only beginning to show up in the data.

Foundayo is also not as potent as Zepbound. Clinical trials showed average weight loss of approximately 12.4% at the highest dose, versus the 20%-plus body weight reduction tirzepatide has demonstrated. Novo Nordisk’s oral Wegovy showed 16.6% in its trial. That efficacy gap is real and will matter to some patients and prescribers. Lilly’s argument is that convenience and accessibility expand the total addressable population more than they cannibalize the existing injectable market – and early prescription data is being watched closely to validate or challenge that thesis.

Valuation After the Recovery

At $988, the valuation conversation is different than it was when the stock was in the low-$700s. The multiple has reexpanded.

Forward price-to-earnings at current levels: approximately 27 to 28 times 2026 guidance midpoint of $36.25 in adjusted EPS. That is a meaningful compression from the peak multiple near 55 times, but also a significant rerating from the oversold lows.
The 52-week range spans from a low of $623.78 to a high of $1,133.95. At $988, the stock is trading approximately 13% below its 52-week high and roughly 58% above its 52-week low – a recovery that reflects how severely the market had discounted the fundamental trajectory.
At current prices and guidance, the revenue multiple on 2026 estimates sits near 11 to 12 times – elevated relative to traditional pharma, but more defensible given the 56% growth rate posted in Q1 and the scale of the pipeline.
Nineteen analysts maintain a Buy consensus rating with an average 12-month price target near $1,204, implying approximately 21% upside from current levels.

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The bear argument is not that Lilly is operationally broken – it clearly isn’t. The concern is that a 28-times forward multiple on a pharmaceutical company still prices in a significant growth premium, and any stumble in prescription trends, formulary dynamics, or pipeline execution gets amplified at that valuation. The Foundayo liver safety questions circulating in some analyst notes are worth monitoring, even if they aren’t yet material. At this price, there is less margin for error than there was at $650.

Pipeline Depth: Beyond the GLP-1 Conversation

Serious analysis of Lilly’s investment case can’t stop at tirzepatide and Foundayo. The pipeline carries multiple assets with commercial potential that are not yet fully reflected in base-case models.

Kisunla (donanemab) for Alzheimer’s disease is now established in the market as the only amyloid-targeting therapy with evidence supporting stopping treatment once plaques are removed. Uptake is building as diagnostic infrastructure for early-stage Alzheimer’s expands. European launches are expected to begin contributing to growth through 2026.
Ebglyss (lebrikizumab) for atopic dermatitis reported four-year durability data in March 2026 showing sustained disease control in the majority of patients, and positive Phase 3 results in pediatric patients were also reported – a potential label expansion into a new population.
Retatrutide, a triple GIP/GLP-1/glucagon agonist in Phase 3, reported positive topline results in type 2 diabetes in March 2026, with up to 16.8% weight loss at 40 weeks. If the obesity Phase 3 program confirms what earlier data suggested, retatrutide could represent the next step-change in metabolic disease treatment beyond tirzepatide.
Foundayo itself is in Phase 3 trials for type 2 diabetes, with Lilly planning to file for that indication before the end of Q2 2026. An expanded label would materially broaden the addressable patient population.
Lilly completed four acquisitions in Q1 2026 alone – Orna Therapeutics, Centessa Pharmaceuticals, Kelonia Therapeutics, and Ajax Therapeutics – reflecting management’s active posture toward augmenting the internal pipeline across oncology, neuroscience, and rare disease.

Technical Structure: Where the Stock Stands

From a technical standpoint, LLY’s post-earnings recovery has been sharp. The stock broke down significantly from its 2024–2025 highs, traded into the low-$600s during the worst of the Q1 macro pressure, and has now staged a recovery that has brought it back toward the $1,000 level. That is not a small move – it reflects a fundamental re-anchoring of expectations following a quarter that exceeded even the more constructive sell-side models.

Near-term resistance sits at the psychologically significant $1,000 level, and more meaningfully at $1,050 to $1,100, which corresponds to the zone where the 2025 breakdown accelerated. A sustained reclaim of $1,000 on volume would be a structural positive. On the downside, support is now being rebuilt around $940 to $960, with a more significant level near $880 to $900 where volume accumulated during the recovery phase. The all-time high of $1,133.95, set in late 2025, remains the longer-term reclaim target for any structural bull thesis.

Options implied volatility has remained elevated relative to historical norms, which means the cost of defined-risk structures is higher than in calmer periods – but it also means the market is still pricing in meaningful uncertainty around near-term outcomes. That is worth accounting for in position sizing regardless of directional conviction.

Scenario Modeling From Here

Bull Case

Foundayo prescription volumes ramp meaningfully through Q2 and Q3, international Mounjaro penetration continues to accelerate, and retatrutide Phase 3 obesity data confirms the weight loss profile suggested by earlier trials. In that environment, shares could retest the $1,100 to $1,133 range and potentially challenge prior highs into year-end as analysts revise 2027 estimates upward. A Medicare GLP-1 Bridge program launching by July 1, 2026 – which CMS has confirmed, capping out-of-pocket costs at $50 per month for seniors – adds a structural demand catalyst that hasn’t yet shown up in prescription data.

Base Case

Revenue growth continues at the high end of guidance, Foundayo ramps gradually as payer coverage expands, and the stock consolidates in the $940 to $1,050 range through the summer as investors assess competitive dynamics between oral GLP-1 products. Valuation stabilizes around 26 to 28 times forward earnings, and shares grind modestly higher through the second half of 2026 as additional pipeline data points arrive.

Bear Case

Foundayo faces formulary access challenges or the liver safety questions cited in some analyst notes prove to be more than noise, Novo’s oral Wegovy erodes Lilly’s market share faster than expected, or macro conditions deteriorate on energy price shocks tied to Middle East instability. A sustained move below $880 would suggest the recovery has stalled and would open a path toward retesting the $800 area. That scenario requires multiple things going wrong simultaneously – but it is not zero probability given current geopolitical uncertainty.

Active Trader Framework

The dynamics here have shifted from the deep-value, oversold entry setup that existed when the stock was in the $650 to $720 range. At $988, traders are working with a stock that has already made a large move and is now approaching meaningful resistance. That changes the risk-reward calculus.

Key levels: $1,000 is the near-term psychological and technical pivot. A clean break and hold above $1,000 on volume opens the path toward $1,050 to $1,100. Failure to reclaim $1,000 after multiple attempts would set up a consolidation range with downside risk back toward $940. Prescription data releases, any updates on Foundayo’s formulary coverage trajectory, and the next Fed meeting will be the primary catalysts for directional movement in the weeks ahead.

Risk management discipline remains essential. A stock that moves 10% in a single session on earnings – which LLY just did – has a volatility profile that demands appropriate position sizing regardless of conviction level. The fundamental case is strong. That doesn’t mean the path higher is linear.

Lilly at $988 is a different conversation than Lilly at $715 – the valuation has reexpanded, the easy money from the oversold recovery has largely been made, and the next leg of the thesis depends on execution across a broader set of products than just Mounjaro and Zepbound. The pipeline is deep, the franchise momentum is real, and management has been consistent in its ability to deliver. But at this price, the margin for error is narrower. That’s where the work actually begins.

For informational and educational purposes only. Not investment advice. Trading involves risk, including loss of principal.

This content is for informational purposes only and should not be considered financial advice. Investing involves risk.

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Your Night Prayer

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A Night Prayer

Jesus Christ, my God, I adore You and thank You for all the graces You have given me this day. I offer You my sleep and all the moments of this night. I place myself and all my loved ones, wherever they may be, in Your sacred side and under the mantle of Our Blessed Mother. Let Your holy angels stand watch and keep us in peace. Amen.

Quote of the Day

“For where your treasure is, there your heart will be also.” -Matthew 6:21

Frequent Confession: Its Place in the Spiritual Life

Today’s Meditation

“Think of all of our omissions with regard to opportunities for and impulses toward prayer. All those free moments we have in the course of each day: we could use them for prayer, but we omit to do so…Think of all the inspirations of grace and all the impulses to good we neglect or to which we turn a deaf ear. We know that God is speaking to us in them and moving us, urging us on to do good. A writer on the spiritual life says: “Our hope of making progress in the interior life depends entirely on the inspirations of God,” that is to say, on how we attend to them and follow them.” —Benedict Baur, p. 162

An excerpt from Frequent Confession: Its Place in the Spiritual Life

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Examination of Conscience

The daily examination of conscience is an ancient Catholic practice. It’s very simple, and it’s designed to help us identify our sins and weaknesses so that we can improve and grow stronger in the spiritual life, while providing an excellent ongoing preparation for regular Confession. It consists of taking a few minutes at the end of the day to prayerfully review our actions in the light of God’s commandments, followed by the Act of Contrition.

Reflect on the victories and losses

Actively reflecting on the high and low points of the day can help you live more intentionally and bring a renewed sense of resolve into the following day.

Review your actions, words, and thoughts today. Did you actively guard yourself against temptation? Where did sin creep in?
In what moments did you practice virtue and moral courage?
Were you attuned to the Holy Spirit’s promptings today? Where did you feel His inspiration?
Ask Him for the graces necessary to follow His Will more purposefully tomorrow.

Act of Contrition

O my God, I am heartily sorry for having offended Thee, and I detest all my sins because of Thy just punishments, but most of all because they offend Thee, my God, Who art all good and deserving of all my love. I firmly resolve with the help of Thy grace to sin no more and to avoid the near occasions of sin. Amen.

Practice gratitude

It is God’s love that has brought you into existence and to this exact moment. Practice looking for His hand in your day.

Where did you feel His loving gaze upon you today?
What people or moments helped you see God in your life?
Thank God for all these moments!
Ask Him to help you recognize His blessings and providence tomorrow.

Renew your commitment to Christ

Remember: our Faith is founded upon a Person—Christ! Renew your personal love and devotion to Him.

Thank God for the gift of His Son Jesus and our call to be His disciples.
Tell the Lord of your desire to know Christ more personally.
If possible, set an intention for your day tomorrow. Ask Our Lord to guide you in this act.
Pray a Hail Mary, Our Father, or another beloved prayer.

Rest with God

He determines the number of the stars, He gives to all of them their names. — Psalm 147:4

Compline

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How Williams Companies Is Cashing in on the AI Power Boom

Written by Chris Markoch

Williams Company Inc. (NYSE: WMB) moved up a modest 1% after delivering mixed headline numbers in its Q1 2026 earnings report. The company delivered adjusted earnings per share (EPS) of 73 cents, easily beating expectations of 63 cents. However, revenue was a slight miss with Williams delivering $3.03 billion, below expectations of $3.28 billion.

Some context is required. For midstream infrastructure companies like Williams, revenue can be misleading due to commodity pass-through accounting. A more relevant metric of a company’s health is adjusted EBITDA. And that’s an area where Williams shone, reporting a record $2.25 billion.

The key takeaway from the report is that demand for natural gas far exceeds supply. The company cited research that natural gas demand will increase by 35% in the next decade. It’s a structural tailwind for WMB to move higher, even as it approaches its consensus price target and the top of its 52-week range.

Williams Doesn’t Directly Export LNG, But…

Natural gas companies are getting a tailwind from the supply disruptions in the Middle East, which are increasing demand for LNG from the United States. That’s not going to impact Williams directly, as its transmission pipelines are confined to the continental United States.

But the company does have an acquired interest in Louisiana LNG. That gives the company fixed-fee revenue tied to that export market. Also, the company’s Transco pipeline corridor is a primary gas artery for Gulf Coast LNG facilities. This is a specific, concrete relationship that positions Williams to benefit from expanding Gulf Coast export capacity.

Data Centers Hold the Key to Long-Term Demand

The data center opportunity may be the most underappreciated element of the Williams growth story. The company is investing approximately $9.6 billion in behind-the-meter power projects. That means it is essentially building turnkey natural gas power plants directly connected to hyperscaler data centers, bypassing the traditional grid entirely.

The portfolio includes six named projects: Socrates, Apollo, Aquila, Socrates the Younger, Neo, and Atlas, with in-service dates ranging from late 2026 through 2028. Combined ISO capacity across these projects exceeds 2,500 megawatts, under agreements ranging from 10 to 12.5 years. Williams also has approximately 6 gigawatts of additional projects in its backlog.

The strategic logic is straightforward. Hyperscalers need power that is fast to deploy, always on, and independent of grid constraints. Renewables cannot currently meet that standard without massive battery storage infrastructure that doesn’t yet exist at scale.

Williams is positioning itself as the answer to that gap. Instead of simply moving gas, this means Williams is embedding itself directly into customer infrastructure under long-term contracts.

The company’s backlog of approximately $15.5 billion between 2027 and 2033 accounts for about 18 months of current revenue. That’s a good reason to believe there’s a higher floor for WMB.

But how high is the ceiling? WMB is butting up to its consensus price target of roughly $79. Analysts have been slow to update their ratings and price targets since the report. However, since the company’s Q4 earnings report, a handful of firms have raised their price targets. The most bullish comes from Morgan Stanley (NYSE: MS), which raised its target to $90 from $83.

How Concerned Should Investors Be About the Debt?

The one area of the report that investors shouldn’t be too quick to dismiss is the company’s growing capital expenditures (CapEx). The new midpoint of $7.3 billion has pushed the company’s leverage to approximately 4.1x. That’s only a tick above the company’s target of between 3.5 to 4x.

In a vacuum, the number isn’t a concern. Williams has an investment-grade balance sheet and laddered maturity levels. However, in 2008, WMB was rocked after a credit shock hit the market, catching the company offside. While a credit shock of that magnitude seems unlikely, the risk of a mild credit shock is not zero.

That said, there’s probably an appropriate level of concern to apply to the company’s elevated debt level. It’s not zero, but it’s not a high-priority concern.

The heavy capital investment is front-loaded into the current calendar year. And on the earnings call, the company noted that the projects coming online in 2027 and 2028 will generate new EBITDA, helping reduce the leverage ratio before active debt paydown begins.

Maybe Not a Stock to Hold Forever, But a Strong Performer for Now

The continued buildout of renewable energy projects, specifically solar and battery storage, is a real threat to Williams. However, the threat is likely not a significant one to the business until 2035 or later.

At that point, battery storage at grid scale will become economically competitive with natural gas. It’s also when the company’s current wave of LNG export contracts begins to roll off. Adding to the bear case is that the timeline also roughly coincides with the company’s longer-dated transmission contracts coming up for renewal.

These three headwinds converging around the same horizon are worth monitoring. If any one of them accelerates faster than expected, that 2035 timeline could compress. But what may happen in the future isn’t the same thing as what’s happening right now. For now, Williams looks like a solid choice for income and growth during this unprecedented period of natural gas demand. READ THIS STORY ONLINE

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DigitalOcean’s AI Surge: How Far Can This Rally Go?

Written by Thomas Hughes

Digital Ocean (NYSE: DOCN) is an AI infrastructure play potentially beyond compare. It not only owns and operates a network of high-performance data centers but also has the software stack to support them. It is a cloud computing solution for small and medium-sized businesses, enabling them access and scalability alongside ease of use, and the business is gaining traction. Plans include expanding its footprint over the coming year, driven by a rising tide of AI demand; the question for investors is how high this AI play can go.

DigitalOcean Accelerates, Outperforms, and Raises Guidance

DigitalOcean had a solid Q1 earnings report, with revenue growth topping 22%, accelerating sequentially and compared to the prior year.

Revenue outpaced the consensus by a substantial margin, indicating a fundamental misunderstanding of the growth opportunity, and is expected to continue accelerating in the upcoming quarters. Growth was driven by large clients and AI demand, with annual run-rate revenue (ARR) from large clients up by 180% and AI-related ARR up by 221%.

Margin news was mixed, with margin contracting in some comparisons and expanding in others. The critical details are that the core business is profitable, profitability improves with scale, and weaknesses are tied to spending increases. Spending increases aim to increase capacity and underpin management’s decision to increase guidance. They now expect at least 50% revenue growth in the subsequent fiscal year and may be cautious in the estimate. The company is already expanding its footprint, and pricing is a factor to consider as well. Demand for GPU capacity is driving rental prices through the roof, and DigitalOcean is exposed to the market.

Strong Market Getting Stronger, But Upside May Be Limited

The MACD indicator suggests that this rally is just getting started. It is a measure of market momentum and can be used to gauge whether a market is strengthening or weakening. In this case, the convergence between the MACD peak and price action suggests the market is strengthening and likely to continue higher over the long term, with periodic corrections aside.

Analysts, institutions, and valuation suggest the upside may be limited, but they are not the only factors in play. Analysts rate the stock as a conviction Moderate Buy with 75% Buy-side bias, but price action has outpaced the consensus price target. The likely outcome is that DOCN stock price corrects at some point, touching base with the consensus level before continuing its advance in the longer term. Additionally, institutions were selling heavily in late 2025 and early 2026, which presents a headwind for the market and could amplify any correction that forms.

Valuation is the biggest concern, as the stock trades at over 125X its current-year earnings forecast. The market is pricing in a robust outlook, but even so, valuation is expected to fall only slightly over the next few years, leaving the stock highly valued relative to its forecasts and tech peers. The worst-case scenario is that this company fails to meet its outlook, leading to a market reset and a massive stock price correction, but that is unlikely given the recent Q1 results and the guidance update.

2 Catalysts for DOCN Price Action May Strengthen

While analysts and institutions limit the upside potential, they also provide support for this market. The market has outrun the consensus price target, but the trend remains positive, with recent revisions leading it into the high end of the range. Those revised price targets would be sufficient for more than 30% upside from the $150 level, where the DOCN stock price surged following the report. Institutions, on the other hand, sold heavily in early 2026 but reverted to buying in early Q2 and may continue to accumulate as the quarter progresses.

Catalysts for this stock include its aggressive expansion. The plans include more than tripling total capacity by early 2028, potentially driving revenue growth into the triple-digit range and sustaining it for several quarters. Risks include the cost of buildout, including a nearly-$1 billion equity raise, and the threat of dilution. As it stands, the share count is up approximately 10% at the end of Q1, and though the company is well-capitalized, additional funding is not out of the question. Delays, missteps, and cost-overruns will be reflected in the stock price.

DigitalOcean is leaning on debt to fundits expansion, and its balance sheet can handle the load. Highlights at Q1’s end include increased cash, current and total assets, with long-term debt and liabilities declining, equity improving, a net-cash position, and low total leverage. The likely outcome is that cash flow will enable debt reduction as the buildout progresses, with cash flow increasing over time and equity rising alongside it. READ THIS STORY ONLINE

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Capital One’s Big Bet Faces Rising Credit Risk

Written by Peter Frank

It’s complicated, but just you wait. That’s the message from Capital One (NYSE: COF) in light of its first-quarter results as it undertakes a significant rejiggering of its business.

For many investors, that’s not been a convincing argument. The lender’s stock has fallen more than one-third since early January. But analysts expect the shares to rebound. Investors trying to decide whether the recent selloff is a red flag or a buying opportunity need to pick through the numbers carefully.

Capital One’s Road to Payments Giant

Capital One is arguably one of the most closely watched bets in American banking. When the company completed its takeover of Discover in May 2025, it bought more than a credit card company. It got its own payments network.

Instead of running its cards on the Visa (NYSE: V) or Mastercard (NYSE: MA)platforms, which charge merchants interchange fees, Capital One can route transactions on its own rails, potentially saving billions over time.

The combined company now lands solidly among the top four payment networks in purchase volume with Visa, Mastercard, and American Express (NYSE: AXP).

From the deal, management has promised more than $2.5 billion in annual synergies, including $1.5 billion from cost savings and $1.2 billion from network efficiencies.

Much of that might not show up until 2027, after the planned technology merger and migration of customers.

That’s the idea, but the first-quarter results told a more complicated story.

Earnings Missed Expectations

For the first quarter, Capital One reported adjusted earnings of $4.42 per share, missing analyst expectations of $4.61 per share. Revenue surged 52.3% year-over-year to $15.23 billion, thanks in large part to the contribution of Discover. But even that fell short of Wall Street forecasts.

The number that caught much of the attention, though, was net interest margin, which sank to 7.87%, down 39 basis points from the prior quarter. That measure of the difference between what a bank earns on its loans and what it pays on deposits again disappointed.

For its part, the company blamed fewer calendar days in the first quarter compared with the last three months of 2025 and the seasonal impact of customers paying down debt after the holidays. But strong retail deposit growth and the impact of the company’s sale of the Discover Home Loans portfolio also factored in.

There was some good news. Earnings before the bank set aside reserves for potential troubled loans rose 8% quarter over quarter to $6.8 billion. And signs that integration was coming along led to non-interest expenses falling 9% to $8.5 billion, and marketing spend dropping 23%.

Credit Losses Keep Climbing

Still, other trends were troubling. Capital One’s provision for possible credit losses surged 72% YOY to $4.07 billion—again coming in higher than analyst estimates. Overall, net charge-offs reached $3.8 billion for the quarter, up 41% YOY.

This is not the direction investors wanted to see. Capital One’s core business is consumer credit cards, and its customers have historically skewed toward subprime and near-prime borrowers. Even with Discover’s more affluent consumer profile, stressed household budgets with elevated inflation and interest rates could keep Capital One’s loan losses eating into earnings.

In fact, management’s decision to build reserves by an additional $230 million, most notably in auto and consumer banking, could suggest possible tough conditions ahead.

Capital Levels Provide Some Protection

The company does have room to cushion surprises. Capital One’s Tier 1 capital ratio stands at a healthy 14.4% and is in line with many in the financial sector. And while the dividend yields just 1.7% annually on a payout of $3.20 per share, the board has approved a $16 billion buyback plan near the end of last year.

The bank’s efficiency ratio, which is a measure of how much it spends to generate each dollar of revenue. stood at 55.57%. That’s not bad for retail banks with large branch networks, but above the sub-50% levels enjoyed by many digital-first banks. Still, the level trended down from the previous and YOY quarters, and the gap suggests some redundancies still exist. The migration of Discover’s credit card customers onto Capital One’s technology platforms, if completed as planned, could provide some relief for these numbers.

The Discover Deal Must Deliver

The central question still is whether the Discover acquisition will deliver on its promises. The strategic logic of the Discover deal is clearly there. Owning a payment network may help expand the combined brands’ merchant acceptance globally, which is a lingering soft point, and could unlock substantial revenue.

But the integrations and cost savings need to arrive. That becomes even more interesting as Capital One also picked up another business in April when the lender closed on a $5 billion for Brex.

That additional strategic pivot moved the company even further beyond its traditional consumer business. Brex, a fintech platform that provides business payments and spend management services, delivers to Capital One an AI framework designed to automate accounting workflows. Beyond consumers, the purchase is a potentially neat fit for a lender to small businesses.

Analysts Still Expect Upside

With all the numbers and news to digest, analysts remain broadly bullish on the company, though some lowered their targets after the first quarter results.

As of now, the consensus rating on the stock is Moderate Buy, with an average price target of $258.14 implying roughly a one-third upside from current levels near $190. Price targets for 12 months range from $215 at the more cautious end to $310 at the most optimistic.

An agreement to pay $425 million to settle a class action suit alleging that Capital One had practiced deceptive marketing tactics also knocked the stock price in late April.

Investors Face a High-Risk Bet

For investors, there’s obviously still much to consider. Capital One is a high-conviction bet wrapped in genuine near-term uncertainty. For investors with a two-year time horizon and a stomach for volatility, the current price near $190 may prove to be an attractive entry point.

The 30+% decline from a recent peak may have already priced in a meaningful amount of bad news. If credit quality stabilizes and integration milestones are met, the stock has clear room to recover toward analyst targets.

But the risks remain. The company’s 1.7% dividend yield is unremarkable for income investors. And credit losses are still rising, while questions over two integrations remain. If you enjoy the uncertainty of predictions markets, this stock may be for you. READ THIS STORY ONLINE

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Netflix, Pulte, and Mobileye Are Buying Their Own Dips—Should You?

Key Points

Netflix’s Buyback Capacity Hits 8% of Market Capitalization

Pulte Signals High Buyback Spending to Continue

Mobileye Announces $250 Million Buyback With Shares Down Big

Analysts Eye Gains Ahead for Netflix, Pulte, and Mobileye

Something unprecedented just happened in Washington D.C…

The Macro Backdrop: A Different Picture Than Earlier This Year

Q1 2026 Results: The Numbers Are Hard to Argue With

Foundayo: The Oral GLP-1 Launch Changes the Narrative

Valuation After the Recovery

Pipeline Depth: Beyond the GLP-1 Conversation

Technical Structure: Where the Stock Stands

Scenario Modeling From Here

Bull Case

Base Case

Bear Case

Active Trader Framework

A Night Prayer

Quote of the Day

Today’s Meditation

The Perfect Pairing For Night Prayer

Recommended Products

Examination of Conscience

Reflect on the victories and losses

Act of Contrition

Practice gratitude

Renew your commitment to Christ

Rest with God

Compline

Williams Doesn’t Directly Export LNG, But…

Data Centers Hold the Key to Long-Term Demand

How Concerned Should Investors Be About the Debt?

Maybe Not a Stock to Hold Forever, But a Strong Performer for Now

DigitalOcean Accelerates, Outperforms, and Raises Guidance

Strong Market Getting Stronger, But Upside May Be Limited

2 Catalysts for DOCN Price Action May Strengthen

Capital One’s Road to Payments Giant

Earnings Missed Expectations

Credit Losses Keep Climbing

Capital Levels Provide Some Protection

The Discover Deal Must Deliver

Analysts Still Expect Upside

Investors Face a High-Risk Bet

More Stories