Chicago, IL – March 18, 2025 – Zacks Equity Research shares NVIDIA NVDA as the Bull of the Day and FormFactor FORM as the Bear of the Day. In addition, Zacks Equity Research provides analysis on D-Wave Quantum Inc. QBTS, Alphabet Inc. GOOG and Microsoft Corp. MSFT.
Here is a synopsis of all five stocks.
I last wrote about NVIDIA as the Bull of the Day on January 29 in the immediate aftermath of the DeepSeek invasion.
I explained why buying near $120 offered excellent risk/reward to accumulate more shares of the primary engine of the AI revolution. That play gave investors and traders a quick 15%+ gain on the NVDA rally back to $140.
I then fleshed out the long-term thesis in this article from Feb 18...
DeepSeek and the 5th Industrial Revolution
But then a bigger correction unfolded for technology stocks as the Nasdaq 100 plummeted 13% in just 3 weeks.
So what did I do? I added more NVDA shares on the dip under $110.
Because the biggest NVIDIA catalyst event of the year starts today with CEO Jensen Huang's keynote address at the GPU Tech Conference (GTC) in San Jose.
While I could recap the broad investment case for owing the "engine of AI," the above article has already done that with a 5-year vision.
So I thought it would be fun to profile a unique new product line that Jensen unveiled at CES in early January. We are certainly due to hear more about it today. Here are excerpts from a recent X thread I wrote @KevinBCook.
At CES, Jensen wowed the crowd with something amazing: a personal AI supercomputer for your desktop powered by Blackwell.
This magic little box, not much bigger than your favorite paperback novel, can build models of up to 200 billion parameters.
That means it's more like a few bars of palladium on your desk. And it's only $3,000. Let's dive in!
If you see a picture of Project DIGITS, it actually looks like a mini DGX box. But it's locked and loaded with the new GB10 Grace Blackwell Superchip. Plus CUDA software and libraries.
And it wields a petaflop of AI computing performance for prototyping, fine-tuning & running large AI models.
“AI will be mainstream in every application for every industry. With Project DIGITS, the Grace Blackwell Superchip comes to millions of developers,” said Jensen Huang, founder and CEO of NVIDIA.
At the big CES reveal, you couldn't even buy it yet. I'm betting the wait list has grown long and today we could find out when they ship.
“Placing an AI supercomputer on the desks of every data scientist, AI researcher and student empowers them to engage and shape the age of AI,” Jensen added.
On his roadmap in January, Jensen explained the NVIDIA vision going from Generative-AI to Agentic-AI to Physical-AI.
In my "5th Industrial Revolution" article, I give some examples of Agentic AI where we can use software tools that work, build, and create for us automatically, thereby multiplying our time, energy, and creative potential.
But Physical AI gets even crazier as robotic systems can embody AI tools and software to conduct physical tasks for us. This takes the best of what NVIDIA offers to create training environments for, as an example, humanoid robots.
Once developers simulate a real-world situation, NVIDIA Omniverse and Cosmos can train the robot on billions of iterations to perform complex tasks for us... like folding laundry or even cooking a gourmet meal.
Now here's where it gets exciting for the potential of DIGITS. Each Project DIGITS features 128GB of unified, coherent memory and up to 4TB of NVMe storage. And you just plug it in to a wall outlet.
I have to believe that that DIGITS will give the power to small developers to build their own models for Physical AI. We may learn more about that today.
What I know for sure, is how DIGITS will empower those building Agentic AI applications from home or lab to go beyond most platforms.
From the company press release on Jan 6 from CES:
"To build agentic AI applications, DIGITS users can also harness NVIDIA Blueprints and NVIDIA NIM™ microservices, which are available for research, development and testing via the NVIDIA Developer Program."
A big key to NVIDIA success for the past two decades is evangelizing developers by giving them power tools in the form of GPU hardware and CUDA software to build just about anything they can imagine.
And that support only keeps expanding. With DIGITS, when AI applications are ready to move from experimentation to production environments, the NVIDIA AI Enterprise license provides enterprise-grade security, support & product releases of NVIDIA AI software.
Be sure to catch Jensen's keynote at 10 am Pacific today. You won't be disappointed when the Wizard of AI shows off his latest toys and magic.
FormFactor is a $2.5 billion OEM of automated wafer probe cards and other testing devices used in the back-end portion of the semiconductor manufacturing process.
FORM serves the requirements of the companies that design or make semiconductor and related products in the Foundry & Logic, DRAM, Flash, Display and Sensor markets.
The company’s product portfolio is comprised of probe cards, analytical probes, probe stations, thermal sub-systems, and related services.
FormFactor reported revenues of $763.6 in 2024, with SK Hynix accounting for 22% of the company’s top-line. This year's sales consensus now calls for growth of only 1.2% to $773 million, after their disappointing Q4 report and guidance in early February.
And analysts have taken EPS estimates for the year down over 20% from $1.63 to $1.26, slipping below 10% annual growth. This is the primary catalyst making FORM shares a Zacks #5 Rank.
We'll look at FormFactor's guidance for the year after we dive into their core business.
Probe Cards help FormFactor to serve customers’ design layout and electrical test requirements by testing semiconductor device types such as systems on a chip (SoC), mobile application processors, microprocessors, microcontrollers, graphic processors, radio frequency, analog, mixed signal, image sensors, electro-optical, dynamic random-access memory (DRAM), NAND flash memory and NOR flash memory devices.
Analytical probes cater to the needs of a diverse set of applications such as device characterization, failure analysis, prototype design debugging and electrical simulation model development.
Probe stations are designed to take care of customers’ complex measurement requirements by creating integrated measurement systems.
Thermal sub-systems aid in the testing of devices at a particular temperature or across a range of temperatures by producing thermal chucks and other test systems.
FormFactor is facing headwinds due to weaker demand in high-volume markets like client PCs and mobile handsets. The expected sequential decline in demand for non-HBM DRAM probe cards and systems further reinforces a cautious outlook for the first quarter of 2025.
FORM expects first-quarter 2025 revenues of $170 million (+/- $5 million), about $20 million below prior consensus estimates.
The company expects a non-GAAP gross margin of 38% (+/- 1.5%).
On a non-GAAP basis, FORM expects earnings of 19-cents (+/- 4 cents) per share vs prior EPS estimates of 33-cents.
Owing to its manufacturing locations in Asia, the company derives most of its revenues from the region. North America has started to grow in recent quarters because of the increasing level of manufacturing activity in the region.
Bottom line: FormFactor plays a key role in the precision testing of semiconductor foundry products. But the current growth slump should make investors cautious here as the stock trades over 25X EPS. The next quarter or two should tell us if a turnaround is afoot. The Zacks Rank will let you know.
Quantum computing stocks such as D-Wave Quantum Inc. gained momentum in December after Alphabet Inc. introduced Willow, the quantum computing chip. However, in January, NVIDIA Corp.’s CEO, Jensen Huang, commented that commercializing quantum computing would likely take at least 15 years, causing D-Wave shares to plummet.
But D-Wave shares surged 46.9% on Friday, reaching a year-to-date gain of 20.8%. So, what’s driving the latest rally, and should we consider buying D-Wave stock now? Let’s delve into it.
During Friday’s trading session, D-Wave shares rose on positive market reception of its earnings report the previous day. D-Wave reported a net loss of 8 cents a share on $2.3 million sales. However, it was the company’s promising forward guidance that drew attention.
D-Wave expects sales of $10 million for the first quarter, way above analysts’ estimate of $2.55 million. D-Wave is optimistic about its first quarter performance mainly due to its partnership with the Julich Supercomputing Centre, which is set to receive a D-Wave Advantage annealing quantum computing system.
Also, D-Wave’s bookings in the fourth quarter have remarkably surged 502% to $18.3 million. This increase in order book restored confidence that the quantum field is progressing steadily. But it’s just not D-Wave’s quarterly report that boosted the stock. A recent scientific breakthrough has also lifted the D-Wave stock. The company claimed that its annealing quantum computer surpassed a top classical supercomputer in solving intricate magnetic materials simulations for materials discovery.
Given its latest breakthrough and positive forward guidance, risk-tolerant investors may hold onto D-Wave stock. The company is investing heavily in quantum computing research and development, a sector projected to add $1.3 trillion to the economy by 2035, per McKinsey. This is because quantum computing can solve problems more efficiently than traditional computing and is vital for training artificial intelligence (AI) algorithms.
Brokers, too, are optimistic about D-Wave. They have raised the highest price target of D-Wave stock to $11 from the last closing price of $6.91, an upside of 59.2%.
However, let’s admit that quantum computing is still in its nascent stage, and currently, its practical applications are not mature enough for the industry. Moreover, big tech players like Alphabet and Microsoft Corp. are eyeing the quantum computing landscape, potentially making D-Wave a takeover target, which may worry its shareholders.
Significant challenges also lie ahead for D-Wave as the company reported an EBITDA loss of $56 million in 2024, thus raising doubts about its position as a leader in this emerging quantum computing field. So, risk-averse investors may wait for further encouraging developments before placing a bet on this highly speculative stock.
D-Wave, as of now, has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
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