Can These Red Hot AI Stocks Sustain Momentum?

The 2026 Q1 earnings season accelerates in a big way this week, with a wide variety of companies across sectors on deck to report their results. The earnings cycle has been dominated by finance so far, with big banks as the main highlight.

Among those on the docket this week are a few companies with exposure to artificial intelligence (AI), including Vertiv VRT and Intel INTC. Both Vertiv and Intel have been red-hot YTD, outperforming the S&P 500 by wide margins.

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Vertiv Guidance Remains Key

Vertiv has been a massive winner over the past few years amid the data center buildout, providing a portfolio of power, cooling, and IT infrastructure solutions and services. Sales growth has been robust, with the company posting at least 20% YoY sales growth rates in each of its last five periods.

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The growth trajectory is forecasted to continue throughout the soon-to-be-reported period, with current Zacks Consensus Estimates suggesting 30% YoY sales growth on 60% higher earnings. Both EPS and sales expectations have remained on a positive trajectory over recent months, a key factor heading into the release.

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The stock’s continued surge reflects positivity heading into the release, though guidance remains key to its short-term momentum. Shares currently trade at the highest forward 12-month sales multiple we’ve seen over the past five years as it’s been re-priced as an AI infrastructure play, but the 110% YoY growth in its backlog during its latest period helps explain why shares are commanding such a premium.

Keep in mind that the company is also becoming more efficient as it scales its revenue, with an operating margin of 23.2% in its latest reported period exceeding guidance and nicely higher from the same period in the year prior.

If Vertiv continues its operating efficiency and raises guidance, the stock can maintain momentum, though market expectations undoubtedly remain high. That said, shares still reflect a stellar play on the AI buildout from a long-term perspective given a strong demand picture for likely years to come, so keep an eye out for any opportunity to capitalize on potential weakness in shares post-earnings.

Intel’s Transition to Continue Driving Sentiment

While Vertiv shares are enjoying momentum thanks to execution, the surge in Intel shares has been driven by hopes that it will become a massive hub for AI chip manufacturing. Guidance for Intel concerning the story will be critical for its share momentum, with any missteps likely to weigh heavily on sentiment.

The current transition Intel is undergoing concerns its most advanced chip manufacturing process ever, namely the 18A node. It’s aiming to become a foundry that manufactures high-end AI chips for the entire industry, building chips that are cooler, faster, and more efficient relative to its competition.

Increasing customer adoption of its manufacturing capabilities and the overall profitability picture of the factories will be key commentary to watch for in the release, with positive reads on both keeping a successful transition story intact.

Its overall profitability picture has been quite challenged over recent years but has shown some signs of turnaround over recent periods. Please note that the chart below tracks gross margins on a trailing twelve-month basis.

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Current consensus estimates forecast both a decline in sales and earnings year-over-year, with EPS revisions showing stability over recent months. Sales revisions have taken a small step lower over the same timeframe, as shown below.

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Bottom Line

Both Vertiv VRT and Intel INTC, companies with considerable exposure to the AI frenzy, are on the reporting docket this week. Both companies head into their respective releases with high expectations, with Vertiv’s post-earnings reaction likely to be driven by guidance, with positivity likely to sustain if it’s raised.

Intel’s post-earnings reaction will continue to be driven by its broader transition into a manufacturing hub for AI chips, with customer adoption and the profitability picture of its factories reflecting critical factors to watch for.

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This article originally published on Zacks Investment Research (zacks.com).

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