As I was scrolling the Israeli market ETF, EIS, I came across a stock that engages in business having to do with metrology.

My first thought was, how is this a top 10 holding in the ETF?

Metrology is the study of measurement, but that doesn’t answer how it landed at the number six spot in $EIS.

If you look closely, it has to do with quality and process control over semiconductor components.

The stock this article covers does exactly that. It recorded a Q2 earnings beat and barely moved, but slid in the days after and is still down about 40% off its all-time high, despite most analysts keeping their buy ratings and price targets above current prices.

What is Nova?

Nova, ticker symbol $NVMI, () is an Israeli metrology company founded in 1993 and headquartered in Rehovot.

What this means in terms of semiconductors is that they measure and inspect chips during the manufacturing process to catch any defects before the wafers move to the next step. This is important because after this phase, the cost of the next step ramps up the price, so catching a mistake before money is wasted is a necessary step.

Nova isn’t a chipmaker, they’re the quality control.

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Earnings Recap

Nova posted record revenue numbers at $255M, up 8% QoQ and 16% YoY. While GAAP EPS was at $2.20 and Non-GAAP at $2.51, up 14% YoY. To make it even better, forward guidance for Q3 has non-GAAP EPS in a range of $2.70-$2.85 which is a ~28% YoY growth just in the middle of the that range.

But the stock eventually fell after earnings because of the growth of GAAP net income. It grew 3% YoY even though revenue was up 16% which was driven by three things:

1. Loan revaluations

2. An unfavorable FX market

3. Gross margin contracting by about 130 basis points

The FX and loan piece could just be one-time events that should reverse in the next quarter, but the margin contraction is worth watching for a reversal because it adds extra costs.

This 16% growth came from record revenue from their Advanced Logic and Advanced Packaging.

On earnings day, the stock stayed flat because nothing “missed,” but fell over the next couple days because investors wanted more given the run the stock had prior.

Cyclicality

Many believe semiconductor spending is a boom or bust business where metrology would be one of the first aspects to get cut. And a stock with a 48 P/E is priced for more growth than some believe is possible.

Cyclicality hurts metrology names because the tools get delayed or deprioritized, and in a broader sense, cyclical businesses always have peaks and lows throughout the year so financials don’t always look very stable on a short-term basis.

But who cares if it’s cyclical. That only matters for short-term investors. In the long run semiconductor spending is expected to increase. Morgan Stanley raised their growth forecast for semiconductor equipment spending by 23%, to $143B, for 2026 with it rising even more over the next few years to an estimated $182B. SEMI (industry trade group) has a similar forecasted growth rate at 23.1% for 2026. And just for DRAM equipment, which is where Nova is most relevant, is projected to grow from $38.8B to $56.9B over the next two years.

The CEO of Nova made a point that the upcoming DRAM node transitions will increase the need for metrology, directly benefiting Nova.

Bringing it back to cyclicality. With this massive projected growth, over time the industry will grow to the point where even the low points will be higher and higher each time. So on a short-term basis there will be lows, but zooming out will show that even those lows are actually higher and growing.

China’s Piece of the Revenue

A real concern is the risk of doing business in China. Any export or import restrictions could have a severe effect on the business and the stock price. Applied Materials, for example, expected a $600M hit to 2026 revenue because of export restrictions. So even though Nova’s China exposure is smaller, a single announcement can reprice the stock significantly.

On the Q3 2025 earnings call, management said China doesn’t cause a huge impact. Nominal China revenue was up but was a smaller share of total sales because other aspects of the business were growing faster. On the Q1 2026 earnings call, this was reiterated by saying China’s share of the revenue is falling because other business, like the advanced node business, are growing much faster in other regions of the world, while the China revenue is still growing but at a slower pace.

Management does acknowledge the risks from business in China, but the reported numbers back this up. Revenue from China is still growing, it’s just becoming smaller piece of the faster growing revenue pie.

The real risk isn’t that China’s revenue share is shrinking, it’s instead a sudden regulatory change that hits Nova the same way Applied Materials was hit, such as a straight up export ban on metrology tools Nova sells.

Insider Selling

Over the last 12 months, there have been 0 insider buys and over the last 6 months there have been 12 insider sales. These have all been from those high up in the company such as the CEO and Directors.

Insider selling isn’t always a bad sign, there are many reasons for insiders to sell. These were all pre-planned sales under 10b5-1 trading plans. Meaning, these sales aren’t because of insider information since that is what this plan protects against, so likely it is for tax or liquidity reasons.

Additionally, insiders account for only 1% of the company, and some of the sellers still hold shares, so this isn’t an exit, just a trim.

The red flag comes from there being 0 insider buying activity over this period. This could mean insiders believe the stock is overvalued at the current price, but that doesn’t mean the business is failing. It would be a serious signal if insiders continue to sell while stock prices fall with no buys.

Verdict

Cyclicality affecting short-term prices, China risks, and 0 insider buys are all real bear cases. None though that I believe break the verdict. What would change it is semiconductor spending slowing down, China risks escalating, and non pre-planned insider selling with further stock drops.

The record Q2 growth numbers despite margin issues, and overall sector growth projections, and the China framing help reinforce that this isn’t a failing business. Even with price target trims, each one is still well above the current price with no one downgrading their rating. And, at current prices (as of this article’s writing), the stock is down ~40% from its all-time high, meaning buying now is buying a dip in a great and growing company.

Given everything mentioned above, I think NVMI is a buy.

Sources: Nova Ltd Q2 2026 earnings release (novami.com investor relations), Nova Q3 2025 and Q1 2026 earnings call transcripts, iShares MSCI Israel ETF (EIS) holdings data via Yahoo Finance, TipRanks analyst price target coverage (Citi, Morgan Stanley, Needham, Evercore ISI, Cantor Fitzgerald), Applied Materials export restriction disclosures, SEMI industry equipment spending forecasts (semi.org), Morgan Stanley semiconductor equipment spending forecast via Yahoo Finance, SEC Form 4 filings for Nova insider transactions, StockScan and TradingView historical price data for Nova’s all-time high

Nothing in this article is investment advice. It reflects independent research and personal conclusions, not a recommendation, and carries no responsibility for how anyone else chooses to act on it. Do your own research before making any investment decisions.

When you ask people to name the top defense stocks to anchor a portfolio with safety and give broader defense exposure, what do they say?

Lockheed Martin ($LMT)

General Dynamics ($GD)

Northrop Grumman ($NOC)

RTX ($RTX)

In my own portfolio, it’s more on the speculative smaller-cap end such as Ondas ($ONDS) and Kratos ($KTOS).

But what if there was a fifth name to add to that list outside of the U.S. that can compete with these options?

Elbit Systems

What is Elbit? Ticker symbol ESLT, it is Israel’s largest publicly traded defense company and one of the most valuable companies there, trading on both the NASDAQ and Tel Aviv Stock Exchange.

They are a defense contractor creating equipment for land, air, and electronic warfare through:

• Drones, UAVs, artillery, combat vehicles, electronics for jets and helicopters, surveillance, reconnaissance, and aerospace.

Operating in more than 30 countries, through subsidiaries, productions, and R&D with headquarters in Haifa. Founded in 1966 as a defense electronics company, they’ve grown immensely in the defense space, with an IPO in 1996.

They have six decades of experience, history, profitability, and government relationships.

This isn’t a stock running on hype or a larger story, but running on necessity and solid growth.

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Earnings Beat and a Drop

After Q2 earnings were reported, ESLT dropped roughly 8%. Except they beat earnings.

• Revenue up 15.9% YoY to $2.29B

• Non-GAAP EPS at $4.14 beating $3.24 estimates

• Record backlog at $32B, up 34% YoY

But the miss came from GAAP EPS miss, at $3.61 vs. the $3.69 estimate. This was a GAAP specific miss driven by a change in international tax rates and not a problem within the company.

Backlog and revenue both beat estimates, but one outpaced the other. Backlog up 34% while revenue up 16%. This can be seen as a conversion problem, perhaps a slow rate of converting contracts to revenue. But considering backlog jumped so much, it is more likely that a large intake of orders was recorded in the last quarter contributing to the large discrepancy. Either way, it is something to watch out for in the coming quarters to confirm which it is.

Their headquarters may be in Israel, but their business is international. 73% of the backlog comes from outside the country, proving its global presence.

On the tax front, again, not a company specific problem. International tax rates were increased to a minimum of 15%. Meaning companies can’t just find the country with the lowest tax rate and countries can’t keep a lower one to incentivize production. The Israeli government had to increase their tax rate from 5.6% to 16.4% to comply with international law. This will shrink the margin but I see Elbit’s growth offsetting the additional costs.

R&D spending increased to $70M in the first half of 2026. But this was paid mainly through Elbit, meaning the customers didn’t have to pay extra costs to cover this. This is Elbit investing in themselves through new facilities and robotics and increasing investment guidance to ~$300M from $220M. All this contributes to tighter Q2 margins.

To summarize this section: this pullback seems like a reaction to external changes rather than issues within Elbit, essentially a correction for a stock that trades at a high price per share.

Peer Comparison

Here’s how Elbit compares to its closest peers.

^{Numbers as of 8/19/2026}

Starting with analyst coverage not shown in the table, Elbit is followed by six analysts on Wall Street, compared to the 20+ covering the other four names.

Elbit stands with the lowest market cap, highest P/E ratio, and lowest dividend yield. It seems to be the most expensive (price and valuation), smallest size, and smallest return in the group.

But, it’s growing at the fastest rate at 15.9% revenue growth compared to a median of 9.3% and the highest 5yr dividend growth at 10.1% compared to a median of 6.8%.

Revenue Growth

Revenue growth is 1.7x that of its peers with a P/E multiple 2.5x greater. The P/E ratio is running ahead of the growth, potentially signaling investors are expecting higher than 15.9% growth in the future. Likely to be proven by the 34% YoY increase in backlog once that converts to revenue. So the question isn’t whether the growth justifies the premium. But rather, is that premium a reasonable bet on backlog conversion and growth pace holding up?

My answer is yes. Mainly because I personally don’t look too much at the P/E multiple if growth is strong in a proven company. For a significantly smaller sized company in terms of market cap, to be outgrowing its larger U.S. peers seems like a good bet to me the multiple is reasonable. But growth decelerating will have a larger impact on the stock than if that were to happen to the comparison stocks.

Dividend Yield

Coming in at the lowest dividend yield at 0.53%, you get about $4/share per year. Not a lot considering the huge price you pay per share. But the 5yr dividend growth is actually stronger than the others. It’s growing its dividend at a faster rate while only having a payout ratio in the mid 20s percent. This means they are reinvesting into the company close to 80% of their earnings while having stronger growth than those with much higher payouts in the mid 30-50s percent.

Overlooked - the Israeli/Europe Angle

So why is Elbit overlooked in the defense sector for retail investors? My guess is that when most consider a defense stock to add to their portfolio, they go with one of the proven four that we compared Elbit to. Not everyone wants international exposure when those close to home are already established and many times safer. So it could be an unfamiliarity with the Israeli market.

Israel

Israel spends a larger percent of their GDP on defense than the U.S. does (~8% vs. ~3%), not for growth reasons but because it needs to. The existential threats they face mean defense isn’t an option but a necessity. Because of this, it’s a great place to invest in this sector. In a country that needs to advance their defense capabilities to survive.

The market already recognizes this dynamic of defense spending. Post the Oct. 7th massacre, ESLT rose ~300% from the low while the overall Israeli market, tracked through the ETF $EIS, rose ~175% from that war low.

Europe

Looking more broadly. Europe’s defense spending has doubled since 2019 and members of NATO have committed to spending near 3.5% of GDP on military spending and another 1.5% on security.

Elbit has a $1.4B European contract with backlog passing a record $32B. So Elbit has already directly benefited from the increase defense spending worldwide. Not every door is open to Israeli partnerships due to political friction, like France banning Israeli firms from major arms expos, but the overall sentiment is positive towards business with Elbit. One country’s sentiment isn’t enough to stop the massive growth Elbit is currently achieving.

Where I Land

I’m considering adding Elbit to my own portfolio, and am watching for these three factors moving forward:

1. Growth staying strong and ideally accelerating.

2. Backlog conversion. Recording a record backlog is one thing, converting it to revenue and increasing growth is another.

3. And, valuation. The multiple is a real premium and seeing where it goes either through price dropping further or earnings picking up.

These aren’t dealbreakers, but more so, what I’m looking out for to stay confident in the stock.

So why consider Elbit? Because they are actively in the middle of two of the highest conviction defense stories in the world and keeping up with their biggest competitors while even beating in growth.

Sources: 24/7 Wall St., Yahoo Finance, Financial Modeling Prep, Investing.com, StockTitan, GuruFocus, Seeking Alpha, stockanalysis.com, Elbit Systems SEC Form 20-F filings, Times of Israel, Jewish News, Koyfin, Simply Wall St, defensebudget.org (SIPRI data), Statista, Israel Policy Forum, militaryspend.org, Breaking Defense, CNBC, Global Defense Corp, stockanalysis.com

Nothing in this article is investment advice. It reflects independent research and personal conclusions, not a recommendation, and carries no responsibility for how anyone else chooses to act on it. Do your own research before making any investment decisions.

After posting great numbers, the stock dropped 7.35% and dropped further over the next day of trading.

Why $AAPL, Why Now?

Apple sits as a core holding in my portfolio. It’s a top three in percentage holding and number two in unrealized gains. Its role in my portfolio isn’t for growth like Broadcom or Shopify, but for a mix of safety and tech growth even if that is slightly slower.

The reason Apple dropped after earnings wasn’t because of its financials, but because of its forward guidance. Investors are worried about potential chip shortages, but more importantly, forward growth came in at 9-11%, below the analyst estimate of 12%. Growth is still coming, but at a slower pace.

Apple isn’t taking part in the AI capex play these other companies like Amazon, Nvidia, or Microsoft are, and that’s why I think it’s worth its premium. It has the same tech exposure without the balance sheet risk of the less proven AI capex space becoming overbuilt or slowing down.

Potential Supply Constraint and Skewed Spotlight

Demand has nothing to do with the guidance miss. Supply is where the issue is.

From the earnings call, Apple mentions that DRAM and NAND memory is being allocated more towards AI data centers over consumer devices. Because of this, Apple has discontinued some high-memory configs. But this isn’t a problem with the company, just an overall sector problem.

This supply drop exists because everyone is pouring funds into capex for AI. But not Apple.

Being one of the MAG 7, Apple is extremely well covered as a stock. But what’s skewed is the media/retail attention towards AI stocks.

I've noticed that most tech articles and posts cover the big names such as NVDA or AMZN and their capex spending and new AI related news.

Apple isn’t getting the same attention as the other major tech players because it isn’t part of the markets trend of AI.

Skeptics Pushback

Growth Deceleration

Single-digit growth isn’t always safety, for some it is stagnation or a sign of decelerating growth.

1. These are analysts estimates and analysts can be wrong.

2. Single-digit growth is acceptable if temporary. In this case, it is driven by fears of supply shortages and rising costs.

But Apple is delivering year after year with new products and updates. If they keep up at the pace they are going, I don’t see single-digit growth happening or staying longer than a quarter. And if supply shortages don’t affect the company the way analysts expect, then there is really no cause for concern.

Valuation Premium

Coming in at a 35.07x P/E ratio, Apple is not considered to be cheap. Skeptics would argue that it’s high especially for a stock that analysts predict has future growth in the single digits.

For the most part, tech stocks have higher P/E multiples because of their growth. In Apple’s case, this is a multiple that has been earned through proven execution and returns that have grown immensely over the years.

A comparison for this phase of Apple’s journey would be Realty Income ($O). Realty Income trades at a 45.89x P/E ratio making it more expensive than its peer REIT’s. But that multiple is justified by the safety it commands. A 30+ year streak of paying and increasing dividends along with stock price growth that may be single to low double digits, but is very safe and reliable. If analysts are right about Apple’s future growth, then I see this as the tech version of Realty Income in terms of safety.

CEO Transition

Tim Cook lead Apple’s stock price on a massive return over his tenure, and changing leadership for a company this size may have uncertainties that would stop investors from considering this a safe stock.

John Ternus (Cook’s replacement), has been at Apple for 25 years with a hardware engineer and product roadmap background. Given his background, he is in good standing to navigate a hardware/supply-driven shortage. In terms of the fears analysts have for Apple’s future, Ternus is the perfect counter because of his specialties.

When I’d Reconsider

Adjusting Expectations

I would adjust my expectations without considering the thesis broken under a couple circumstances:

1. If single-digit growth lasts for a few quarters, but tied to the macro-economy or short term supply shortages, as this has nothing to do with the quality or performance of the company.

2. A rough start to Ternus’ tenure as CEO. Not every CEO has a smooth transition and products can have sub-par launches, but it’s how they rebound that determines the rest of their time as CEO.

Sell/Trim Triggers

Under a few conditions, I would sell or trim my position and consider the thesis broken:

1. Single-digit growth lasting a full year without any ties to the macro or supply chain environment, as this signals weakness within management.

2. I usually don’t consider a high P/E a sell signal, but if the P/E multiple rose significantly and disproportionately faster than growth, I would trim as it may be a sign of the safety story I’ve talked about falling apart.

3. Internal dysfunction caused by senior leadership leaving under Ternus. It is never a good sign when leadership leave because of a new CEO.

These are all points I’ll be watching going forward. None are currently happening. Growth slowdown and CEO transition are two points to keep a closer eye on, but neither one is at the point I’d consider selling. Growth slowdown is just guidance, not an actual result, and Ternus isn’t CEO yet so there’s nothing to look at as of now. Regardless, I’ll be watching closely at the future of Apple.

Bottom Line

Apple may not be the growth position in a portfolio it once was, even though it still has lots more room to run, it’s becoming more of a safety anchor that still brings tech growth. You’re trading the high growth of the unproven AI capex buildout for a more grounded and proven growth.

Could Apple be the Realty Income of the tech sector where you’re paying a higher multiple for a reasonably “safe,” proven track record that constantly delivers?

The post earnings drop may have been harsh, but it doesn’t change the underlying business, the reaction was all about future guidance. Going forward, I’m not expecting perfection. But I will be watching how the CEO transition plays out to see if this single-digit growth is here to stay or will be a thing of the past.

Until then, this is a key position in my portfolio that has earned its spot and may just be transitioning to a more safety compounder than growth role.

Sources: CNBC, Investing.com, TechTimes, TradingKey, Seeking Alpha, CBS News, 9to5Mac, TechCrunch, Robinhood

Nothing in this article is investment advice. It reflects independent research and personal conclusions, not a recommendation, and carries no responsibility for how anyone else chooses to act on it. Do your own research before making any investment decisions.

Revenue up 32% to $1.31B YoY and EPS at $0.62 beating the $0.41 estimate.

What happened after the beat is why the stock fell. Net deposits, which management says is their core business metric, grew 28% for the quarter largely off a very strong June. While July was slowed to ~13% annualized. EPS beat came from a one-time gain, not core earnings.

The Everything App

There are two main reasons driving HOOD’s growth.

The first is a simple idea. The median age of HOOD’s users is mid-30’s with 3/4 under 43 with a quarter under 27. That’s a user base that is growing into prime investing age. As they age and make more money, there will be more to invest, growing account balances.

The second growth driver is separate from the users. Robinhood has been adding new reasons to come back and continue using the platform. Starting a credit card offering 3% cash back, gold membership with perks such as a 3% Roth IRA match, Banking, Trump accounts, and more.

These aren’t just additions, but reason after reason to consolidate more of your financials onto the app.

This expansion isn’t exclusive to Robinhood. Schwab began as a trading platform in 1995, introducing a bank in 2003, and after some more additions and growth, adding a mobile trading app in 2011 and removing commissions in 2019. Today, Schwab manages $11.9 trillion in client assets. Now, this doesn’t guarantee Robinhood will be as successful, but it’s moving somewhat faster, creating in a decade what took Schwab 16 years to do.

Robinhood has shown that it can be the one “everything app” needed for personal and retail finances, with a trajectory that grows alongside its users.

Recent Developments

Zooming in, within the first 4 months of Robinhood Banking opening, it crossed $1B in deposits. The credit card passed 1 million holders in the first two years. And in July, Robinhood released the Platinum card aimed at competing with the Amex premium cards.

The bigger picture growth: Robinhood was chosen as the sole broker and trustee for the Trump Accounts, meaning Robinhood is already creating future users before any other broker can get the chance.

Bull/Bear Pairs

Trump Accounts

Growth vs. cost. To date, Robinhood is the only broker available to open a Trump account on. This locks in tons of new future users before any other bank or broker gets access. Furthermore, it’s another example of more AUM and revenue as accounts grow over time.

The downside is this costs Robinhood money to administer and they don’t even get credit for the millions of accounts they onboard. Share prices fell after the Q1 earnings report on the news of the costs behind the program.

But this is a short-term cost that will pay off over the years as those accounts mature and grow.

Valuation

At a 40x P/E multiple, HOOD isn’t cheap but I wouldn’t say it’s expensive either. The growth justifies the multiple.

You may be paying a premium for the growth and deceleration would hit the stock hard, but this is just a growth stage and not priced on hype. Take a look at IBKR with its 35x multiple or SOFI at 38x, another two growth stories. And SCHW at 19x, more mature and slower on the growth.

Revenue vs. Crypto/Options

There is the opinion that Robinhood is just a trading app with many believing the biggest drivers of revenue for HOOD are the options and crypto market, with little real diversification and heavy tilt in this segment. But the Q2 earnings data shows another side. Crypto revenue fell 38% while overall revenue rose 32%. This means crypto is a much smaller portion than some are lead to believe.

Sell Triggers

I’d sell under a few circumstances:

1. If client assets were compromised and not in a security scare that’s fixed right away.

2. If payment for order flow (PFOF) was banned as it is a core piece of the revenue model.

3. If net deposits dropped for a few consecutive quarters instead of one or two bad months, as this is a sign of growth decelerating in the segment management describes as the most fundamental to HOOD’s revenue.

Thesis Adjusting Triggers

Now, there are some negative cases that would not break the main idea of this article:

1. A couple of bad quarters over the long term are totally fine if a major factor behind that is macro trends such as interest rates or weaker/bear market. These are just noise and not something wrong with the business.

2. If the company’s growth slowed and moved past the growth phase into a mature stable one such as Schwab. A sign of this happening could be the start of dividend payments as they wouldn’t need as much cash to reinvest into the business.

Bottom Line

Despite an earnings beat, the stock dropped from a weaker month of deposits. But Robinhood’s story is far from over. From growth tied to its user-base and multiple attractive features, it has a genuine growth path that doesn’t seem to be slowing down. The near-term reaction isn’t a warning but a pullback that looks like a buying opportunity more than a red flag.

Sources: Robinhood Q2 2026 earnings report, Robinhood Investor Relations, Barron’s, Reuters, Robinhood 10-Q filing, Robinhood user demographics reports (Business of Apps, PortersFiveForce), Charles Schwab company history, Robinhood Gold IRA match terms, U.S. Treasury/BNY Mellon Trump Accounts announcement, Robinhood Platinum Card announcement, Robinhood brokerage data (equity fundamentals: HOOD, SOFI, IBKR, SCHW)

Nothing in this article is investment advice. It reflects independent research and personal conclusions, not a recommendation, and carries no responsibility for how anyone else chooses to act on it. Do your own research before making any investment decisions.

With Shopify you get the stability of commerce and retail exposure mixed with the high growth of tech and AI. The business leans commerce, but the stock feels like it trades similar to a tech stock with its volatility and high P/E multiple.

To be clear, Shopify isn’t a retailer, it’s a software company that retailers and commerce businesses use. But Shopify’s revenue is driven by how those businesses perform, which is why I’m using “retail” as shorthand for commerce exposure. On the other hand, “tech" refers to how the market actually prices the stock.

Shopify is distinct from similar companies like Amazon in that Amazon is a general store selling to the average shopper, while Shopify is for the individual person building their own business selling to customers. Different side of the same coin.

That being said, is Shopify a retail or tech stock? That distinction might be where the growth opportunity is found.

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Why Shopify Wins

The new business trend is worth breaking down further. Of new businesses in 2026, 14.4% are retail/e-commerce related, up from 12.4% last year. So it isn’t just more new businesses, it’s more of the kind that need what Shopify offers.

I’m not a user of the platform so the reasons why someone would choose this over other similar options is somewhat of a mystery to me. Is it the big name that everyone knows or the product itself? My guess is a mix of both. What I do know is that it offers a place to run a storefront, payment, manage inventory, and website all in one spot. The brand recognition stemming from advertisements and use from large companies, and the all-in-one style are why I think new customers flock to Shopify.

On the tech side, what Shopify isn’t, is an AI company. Shopify sells software to retailers. But like most these days, AI is incorporated into the platform. For Shopify, AI is there to help the small businesses and there to support the large ones. The growth story isn’t just a bet on more people starting businesses, but betting on AI to make it easier for people to run one successfully.

The proof is in the 10-K. Shopify’s numbers show that those that stick with the platform end up spending more over time. Retention = increased revenue. And not just individuals and mom-and-pop shops come to Shopify. Larger recognized names like Allbirds, Bremont, Sephora, and Heinz all rely on the platform.

In the most recent quarterly earnings, SHOP excelled with revenue up to $3.58 billion, +34% YoY. GMV up 32% to $115.6 billion, and forward guidance for next quarter raised to above 30% growth. This contributed to a closing 17% increase in stock price in one day. The growth is showing in the numbers as well.

This is the commerce case. Returning customers, growing revenue, real e-commerce fundamentals.

Valuation Concerns

The most obvious bear case when looking at the stock is the high P/E multiple. SHOP trades at a huge 115x earnings. Compared to Etsy ($ETSY) at 33.99x, Shopify comes in significantly higher. Some would argue and make a good point, that the stock is very overvalued compared to its peers. It may be priced to perfection. We’ve seen how the stock can have big hits or big gains. It dropped about 30%, on a broader market tech selloff to start the year before the war with Iran even took an effect on the market, and has had 15-20%+ swings in both directions on earnings. But the most recent quarter earnings have shown that this is just noise. Many tech stocks carry high P/E ratios but aren’t considered sells. Q2 2026 earnings showed the stock is picking up its growth and even raising its future expectations. The high valuation may look scary, but it’s a worthy price to pay for a stock that has proved itself through massive growth since its 2022 low.

115x isn’t a multiple you’d expect from a company whose revenue depends on commerce exposure. This is the market pricing Shopify like a tech stock.

Year-to-Date Performance

On the year so far, SHOP has performed worse compared to its peers (we’re going to look at Etsy). Shopify is down ~4% while Etsy is up about 45%. So why buy SHOP when its competitors are outperforming it by a wide margin?

Looking at Etsy, its stock price may have grown way more, but financially, it probably shouldn’t be jumping as much as it has. Etsy’s revenue grew just 6.2% YoY last quarter and even posted a net loss due to a one-time discontinuation of one of its components, bringing the pre-loss income to $114.3M. Meanwhile, Shopify’s revenue grew 34% and had a $1.5 billion net income. Etsy is a straightforward e-commerce company that happens to be having a good year despite its weaker financials. It’s also worth mentioning that Shopify is operating with almost no debt with a debt/equity ratio of 0.13, while Etsy is dealing with $3B in convertible debt against a stockholders’ deficit. Shopify’s balance sheet is strong to the point that management authorized a $2B share buyback starting six months ago in February. Only a company confident in its financials would do this. If you’re looking for short term trading then Etsy may have been the way to go a few months ago, but long term, I’d rather buy the company that is constantly improving and has a stronger balance sheet.

Amazon’s Threat

Another big bear case is “what about Amazon?” And the answer is, Amazon is a different company with different exposure. Yes, it has the retail and e-commerce side, but it also has the media and now AI/data center exposure. Sure there’s the threat of Amazon pushing any commerce player out of the market, but if that were the case, these large companies wouldn’t be going to Shopify, they’d be going to Amazon. The two have been in the market together for years, if it were to happen, I think it would’ve by now. Instead both are growing separately. They are both fighting for different customers. Amazon sells to the shopper while Shopify sells to the person behind the business.

Meta’s AI “Threat”

I put threat in quotations because to me, this isn’t something anyone should worry over. In July, Rothschild and Co Redburn downgraded SHOP to neutral because Meta is trying to get into the e-commerce space with their AI that analysts call an “existential threat.” The idea is that Meta’s AI will be able to replicate and replace Shopify. This sounds bad, but in practice it’s nothing to fret over. Look at the TikTok shop and Instagram Shopping, many of the merchants selling on there are running through Shopify. Shopify even has official integration in these platforms. So Meta’s “threat” may not be a threat but just an additional tool.

Why I’d Sell

Shopify’s own 2022 history would look like a sign to sell to most, with an ~80% drawdown, but it wasn’t in the end. For short term investors that would be an easy sell. But for the long term, that was just a rough patch. That being said, if another crash like 2022 occurred, I’d consider selling as it may be a problem with management or the trend of the company/sector itself.

Adding to that, watching Shopify’s own numbers in quarterly earnings gives a solid read on the health of the company. I’d watch for the trend of GMV growth and business formation trends on Shopify itself. If those numbers start to get worse with no sign of recovering, I’d take that as a sell signal.

What Kind of Stock is It?

The business is driven by commerce exposure at its core, but the stock trades like mega-cap tech. The retention data in the 10-K shows the fundamentals are tied to how commerce businesses perform, but the P/E multiple and earnings swings behave like high growth/tech stocks.

This mismatch is the opportunity. You are buying the exposure of e-commerce while also buying the high growth potential of tech. Right there in the middle, is where this thesis lies. So, my answer is that this is both, just depends what you look at.

Sources: Shopify Q2 2026 earnings press release, Shopify 10-Q (Q2 2026), Shopify 10-K (merchant cohort revenue disclosure), Robinhood (price data, fundamentals, financials), U.S. Census Bureau Business Formation Statistics, Etsy Q2 2026 earnings press release, Etsy 10-Q (Q2 2026), TipRanks (Rothschild & Co Redburn downgrade coverage), Blockonomi (ARK Investment Management trade coverage), TikTok for Business (Shopify integration documentation), Yahoo Finance (Q1 2026 earnings reaction coverage)

Nothing in this article is investment advice. It reflects independent research and personal conclusions, not a recommendation, and carries no responsibility for how anyone else chooses to act on it. Do your own research before making any investment decisions.

Most people are buying the energy and tech companies most likely to benefit from the AI and Data Center boom, but what I believe should be looked at more, are the companies building the power infrastructure that boom depends on.

When crafting my portfolio and looking at what I had, I noticed I hold a semiconductor stock, some tech, multiple energy stocks, and some others. What I didn’t have, was the industrial/manufacturing exposure. So while researching what to fill that gap with, I stumbled upon GE Vernova.

This isn’t a startup or a speculative company even though its founding was less than five years ago. GEV formally split off from General Electric in April 2024, so it’s “new” in the sense of a new independent company. It has decades of turbine and grid manufacturing experience and existing relationships which are reasons to seriously consider this as a nice long-term hold and key holding of my portfolio.

That being said, I invest for the medium to long term. I think this stock fits that well. There is a $176 billion backlog of contracts to maintain revenue for years, and the booming AI/data center play is the key catalyst for more contracts to come.

Demand and Long Horizon

At its core, supply and demand is why GEV is a long term bet. As the energy demand for data centers increases, someone will have to build the supply that satisfies the demand. Not only that, but in a broader context, our demand for energy is constantly increasing outside of AI. AI is not the entire case, but it is the main accelerant.

Simply put, data centers need power → power producers need more grid capacity and energy generation → gas turbines and equipment are ordered → GEV builds it out → shows up as backlog and orders.

This isn’t a short cycle, it takes years to build the infrastructure regardless of the demand, and those demand drivers aren’t fading anytime soon.

What has to happen is gas turbine capacity scaling from ~20 GW to 24 GW by 2028 and 30 GW by 2030, and existing backlog has to convert to revenue at the rate management expects.

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Bull and Bear Cases

Now that GE Vernova is its own standalone company, nothing is hidden. Both the good and bad are shown out in the open.

Pair 1: Backlog/Order Growth vs. Wind Loss

As of Q2 2026, backlog is up to $176B from $163B in Q1. Q2 2026 orders are up 88% year-over-year to $24.2B. And just on equipment for data centers alone is over $5B to date which is more than two times all of 2025.

If you watched GEV after its last earnings report, it dropped on the news of the wind component of the business reporting an EBITDA loss of ~$270M in Q2 2026. With wind orders also down 40% and wind revenue down 10% YoY. Someone selling at the current price would likely say this isn’t just a wind problem, it’s the same culture that ran GE’s failed power division, and it could spread to the other two parts of the whole.

This doesn’t break the thesis though, because you can see the growth coming in from the power and electrification segments, while wind is the smallest of GEV’s three components. Additionally, this is not a problem exclusive to GEV. Siemens Energy (a close competitor) had similar shortfalls in their wind business.

Pair 2: Gas Turbine Capacity vs. Tariff/Quality Risk

Gas turbine capacity continues its planned scaling, with turbine backlog on track for 125 GW by the end of the year.

Indemnity claims have reached $800M in regards to the 2024 Vineyard Wind offshore blade failure, where court proceedings are about defects and quality control. Also, tariff impact is estimated at $100-200M, but down from an initial expectation of $250-350M.

I see this as a wind specific issue as long as the litigation and defects stay part of the Vineyard Wind situation and not GEV’s manufacturing and quality in general. If a similar defect turns up in the gas turbine section of the business, I’d take that as a more serious signal.

Pair 3: Valuation and Price

GEV currently trades at a 28.35x P/E multiple making it relatively cheap compared to its peers. Eaton ($ETN) trades at 42.2x, Quanta Services ($PWR) at 76.4x, Vertiv ($VRT) at 54.6x, and Hubbell ($HUBB) coming in lower at 27.9x. Now this low multiple might look good, which it is, but it also means it may be priced to perfection. This is implying the 28.35 multiple looks reasonable only if the mega-caps don’t slow the data center building down. If that happens, backlog conversion doesn’t show up as expected and right now the stock is priced like that won’t happen. GEV may be cheap, but its actual price is not, hovering around the $1000/share mark and about 16% below its YTD high.

Bear Cases Do Not Break the Thesis

These bear cases (wind losses, litigation, valuation) aren’t one connected issue with the business, but more so, multiple things that happen to occur at the same time.

Power and Electrification are the two main components of the business and are the ones carrying the thesis. They’re healthy and growing as shown by the backlog and forward guidance. Wind may be dragging that down, but considering it’s the smallest of the three, it still doesn’t break the thesis. If wind losses continue to rise over the next couple years, then I’d stop calling it background noise, but until then, it’s a part of the whole that doesn’t make much of a serious dent.

In terms of valuation, GEV is more reasonably priced than it is cheap. This gives room for a big hit if growth stalls. But it’s not an overvalued stock making it more attractive for a long term hold.

…But What Scenario Would Break It?

GE themselves went through the scenario back in 2017-18 when they were overbuilt and renewable energy got cheaper. The demand for gas turbines collapsed and backlog fell and stayed down for multiple years. It wasn’t just one-two bad quarters, it was a multi year complete collapse of demand. A $23B write-down, dividends cut, and stock price fell from ~$29 to ~$13. The market itself shifted and changed. Now, if backlog fell for a couple quarters then I don’t see that as a big issue, but if 2017 happens again and it’s multiple years, I’d take that as a market shift.

I don’t see that happening since the main catalysts driving the growth are AI and data centers. These aren’t like renewable energy, these are drivers that we are actively seeing change our way of life. But that’s just my read, not a guarantee.

Sources: GE Vernova Q2 2026 earnings release, GE Vernova press materials, SEC Form 10-12B/A, Reuters, CNBC, reNEWS, Windpower Monthly, The Motley Fool, TipRanks, Simply Wall St, StockStory, POWER Magazine, IEEFA, Carbon Commentary, Robinhood market data

Nothing in this article is investment advice. It reflects independent research and personal conclusions, not a recommendation, and carries no responsibility for how anyone else chooses to act on it. Do your own research before making any investment decisions.

Energy Transfer is exactly that transportation engine plus a high-yield dividend stock. It’s had its ups and downs which we will get into here, but it’s a growth story mixed with a ~6.6% dividend yield that may sound scary, but I think is actually quite sustainable.

What do they do?

At its core, Energy Transfer is a midstream company operating pipelines that transport oil, natural gas, and NGLs covering around 140,000 miles and operating in 44 states. They store those resources, have a midstream gathering and processing segment, and have stakes in Sunoco LP and USA Compression Partners.

The revenue comes from its fee-based business model, so they make their money based on the volume it moves.

Recent price action and the Hormuz angle

This is how the stock has traded since right before the start of the war with Iran:

It shows mixed feelings, lots of ups and lots of downs. But remember that the actual percent move is not so high. I didn’t buy this stock to actively trade it, but to hold for the long term, so these moves don’t bother me, just look how it always recovers.

Hormuz closure and oil prices matter, but not in the typical way they affect energy stocks. ET has very little direct exposure to the Straight, as its revenue comes from volume transported, not value of those goods. But, like many stocks in the short-term, they trade based on the sentiment of the overlying sector, in this case, energy. This helps to buy on dips, since macro context adds unnecessary stress to the stock.

Compared to the overall sector, we will use XLE as an example as it tracks energy stocks:

XLE is tied to macro conditions more than ET. For example, the ceasefire around April 8th contributed an ~8% drop over the next couple weeks while ET had dropped ~2.5% in that same time. There is no reason for this dip in ET since Hormuz pressure and oil prices don’t affect its it’s fee based, volume driven business. But it allows for better entries. Now look at the big dip from mid-May through June. XLE fell ~13% off of oil prices coming down because of peace talks, while ET fell less at ~8%. Again, nothing that affects the pipeline business, but overall sector trends affect all stocks under it.

This is why the war headlines don’t bother me. The business is safe from the macro trends in oil prices and the geopolitical issues around the world. Yes, they will affect the price as I have mentioned, but the volume ET transports will not change through headlines as oil does. It will only change if drillers themselves stopped to do their job.

Is the yield really sustainable?

With ET’s history of cutting dividends during COVID, it’s important to understand why the current yield is safe.

The Q1 2026 DCF shows they have $2.7B in distributable cash, and a 2.3x coverage ratio, which means they only needed to pay out about $1.16B as a distribution. Through their many businesses, they are generating over 100% what’s needed to cover distribution payments. For an MLP, 2.3x is very safe, and around $1.5B could be reinvested to further strengthen the business.

As for growth, adjusted EBITDA is up to $4.9B in Q1 2026 from $4.1B a year earlier. DCF shows $2.7B, an increase of ~$400M. This reinforces the 1.7x payout ratio since it’s clear the business is gaining traction and generating more profit. On top of that, EBITDA expectations for the remainder of the year raised to ~$18.6B, about $1B increase. Regarding the dividend payment specifically, management stated they want to grow dividends by 3-5% annually. For many growth stocks this is low, but in the case of Energy Transfer with its 2020 track record, conservative growth seems the smarter play.

In regards to debt, leverage target is 4.0x-4.5x EBITDA, which is a significant improvement from 2020 (when they cut dividends), which was as high as 5.5x. Management is actively working to make sure leverage doesn’t get back to these worrisome levels.

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Bull and Bear Case

For each bull reason, there is a bear, so let’s get into it.

Management is more conservative now than ever before, fueling confidence that the company can do well long term. On the flip side, they took on a $1.75B debt raise at 6.5-6.7%, but considering it’s a swap from expensive short-term debt and they’re still on track for the 4.0x-4.5x leverage target, I’m not concerned.

A big bull scenario for most energy stocks is AI and data center demand. ET falls into this. But, some may see that as far out, especially when New Mexico rejected ET’s pipeline that was going to supply natural gas to Oracle’s data center not once, but twice. And New York put a hold on building data centers. Why am I not worried? Because this is a long term hold and the energy demand for AI/data centers will arrive.

Again, it’s a fee based system, so it’s not tied to commodity prices, but commodities can still have an effect as discussed earlier.

The bull cases without bear counterpoints: transportation over land is an underappreciated piece of this sector, so when it gets going, it could be a boom no one sees coming. Additionally, on the psychological front, it’s a relatively cheap stock, around $20.35 as of this posting, so it’s easier for retail traders to wrap their heads around building larger positions.

I tried looking for bear cases against holding this long term, and couldn’t find any. There are short term bear cases such as the Greenpeace litigation over the Dakota Access Pipeline which is going in ET’s favor, and a high concentration of insider ownership where Kelcy Warren (Former CEO, now Executive Chairman) and some others own more than 50% of the company. Neither one threatens the business operations but are still worth giving a sentence to.

What would change my mind?

As of now, none of the bear cases would make me sell, but my opinion on Energy Transfer as a long term high-yield energy exposure play would change under two scenarios.

1. 2020 coming back with leverage climbing towards the 5.5x range with no reasonable reason why or plan to fix it, or coverage dipping below 1.2x.

2. Contracts stalling. But it depends when and why, because there’s a scenario where this goes from a growth+income play into a safe dividend stock once growth has been maxed out. Or the scenario where the business starts to go downhill.

Sources: Energy Transfer Q1 2026 earnings release and investor materials, Energy Transfer investor relations site, SEC filings (Form 10-K, Form 4 insider transaction filings), Robinhood market data, Reuters, NPR, CNBC, CNN Business, Bloomberg, Data Center Dynamics, Seeking Alpha, TheStreet, Source New Mexico, KVIA, KOB, KSFR, U.S. Energy Information Administration, International Energy Agency (IEA) Oil Market Report, J.P. Morgan Global Research, Wikipedia (2026 Strait of Hormuz crisis)

Nothing in this article is investment advice. It reflects independent research and personal conclusions, not a recommendation, and carries no responsibility for how anyone else chooses to act on it. Do your own research before making any investment decisions.

The setup

Drones are the future of warfare, with the shift towards autonomous systems, that’s the natural next step. Ondas is building for that future in two ways: private industrial wireless networks and drone/autonomous systems. The drone angle is where I believe the growth is.

The pullback vs. the pace of new business

The stock ran from about $2 in Summer 2025 to a closing peak of $14.01 on January 8, 2026, then reversed. It’s sitting just under $8 now, down roughly 44% from that closing high. In early June of this year it had an almost 50% run before dipping right back down, erasing its gains and turning red on the year once again. That’s a steep drawdown for any stock.

But the timeline of orders over that window tells a different story:

• December 2025: Ondas subsidiary OAS was selected as prime contractor for an autonomous border-protection program.

• March 2026: Ondas subsidiary Airobotics received the $20M initial purchase order under that same border program.

• June 2026: Ondas won $30M+ in new orders in May, bringing Q2-to-date orders to $110M+ across its defense, security, and autonomous technology platform.

• July 2026: $70M in new orders over the prior month, covering unmanned ground systems, border security, counter-UAS, and ISR systems, including a $6.9M contract with the Australian Department of Defence for counter-drone kits.

• July 2026: $875.8M acquisition of DZYNE Technologies, a manufacturer of autonomous aircraft and counter-UAS systems. DZYNE shareholders will own about 13.8% of Ondas after closing of the acquisition. This deal is expected to contribute ~$191M in revenue this year and $300M+ next. Additionally, it is expected to be EBITDA positive from day one.

• Ondas also announced a partnership with Palantir Technologies, a serious technology and credibility signal.

Order flow doesn’t equal revenue in the same quarter. These are contracts and purchase orders that get realized over time. That’s a real gap in this analysis. However, as the stock has been falling from its January peak, the pace of new business has been accelerating.

What the revenue actually shows

Quarterly revenue, going back to 2024, as of company financial filings:

• Q3 ‘24 $1.5M

• Q4 ‘24 $4.1M

• Q1 ‘25 $4.2M

• Q2 ‘25 $6.3M

• Q3 ‘25 $10.1M

• Q4 ‘25 $30.1M

• Q1 ‘26 $50.1M

What starts as a gradual increase year-over-year becomes an exponential rise. Q1 2026 revenue came in at $50.1M, up 1,065% from the previous year and 66% quarter-over-quarter, beating the company’s expectations by 25%. Gross margin is up to 49%, up from 42% the prior quarter and 35% a year earlier, so even though the company is burning through cash, the growth isn’t coming at the expense of profitability.

Ondas raised its revenue expectations from $170-180M in January to $390M in May and $525M in July, a jump that comes from new acquisitions. Backlog jumped from $68.3M to $457M at the end of Q1 2026. To counteract the cash burn, management says they have $1.48B in cash, which is funded in part by a $1B equity offering.

Peer analysis

Compared to other drone/counter-drone companies, ONDS is right in the middle in terms of cheap/expensive:

Ticker - Market cap - P/E - P/B

• ONDS (Ondas) - $5.4B - 33.2x - 2.9x

• RCAT (Red Cat) - $1.2B - Negative P/E - 3.9x

• AVAV (AeroVironment) - $8.0B - Negative P/E - 1.7x

• KTOS (Kratos) - $9.6B - 277.7x - 2.6x

Data via Robinhood, as of July 24, 2026.

ONDS and KTOS both have positive trailing P/E ratios, while other peers do not which seems normal to me considering how new this industry is. ONDS's P/E is odd considering the -332% net margin it posted last quarter. I wouldn’t lean on P/E much here either way since Ondas is still unprofitable. On price-to-book, ONDS sits in the middle of the group. This just shows that in relation to its peers, this stock is right in the middle.

The government view

President Trump announced earlier this year that the U.S. government would increase its defense budget on drones from $3.9B in 2026 to a staggering $53-74B in 2027. If they also buy a stake in one of these companies, Needham believes Ondas is in the running.

The other side

There is still a lot of risk involved. Ondas is a small cap that is still unprofitable and is subject to many large price swings in both directions. And even with its large list of orders, that does not guarantee its revenue growth continues at the exponential way it has in previous quarters.

Another point to consider is the $32M of shares that insiders have sold on the last quarter. These could be for a number of reasons such as profit taking or tax reasons, but it is still worth remembering.

Furthermore there is a short interest of 34% (as of April 2026) of the float, which could cause short squeezes in either direction. Price targets ranging from $18-25 which means Wall Street analysts expect an 130%-220% rise. So the consensus is slightly mixed.

Dilution and cash burn picture

Digging more into the dilution reveals that there are outstanding warrants at the $28 strike with the CEO Eric Brock disclosing additional $20 strike warrants. Since the stock needs to jump by 150-250% to hit those strikes, by the time the dilution warnings start to flash, current holders will already be on a massive unrealized gain.

For cash burn, adjusted EBITDA in 2025 was a $31.3M loss and it doesn’t look good that just this years first quarter is already at a $10.9M loss. Considering the $1.4B in cash they hold, it will take years or a quarter of unlikely astronomical spending to burn through it all. Management has also said that they expect this year to be the worst, and better yet, only the first half of the year. Sort of like an “it needs to get worse before it can get better” situation.

Product level EBITDA is positive as of Q1 2026 which is ahead of schedule by half a year. The core business in OAS has an EBITDA profitability date of early next year which was moved up another half a year, and profitability as a whole is targeted for 2028. This shows that despite the dilution and cash burn, Ondas is staged for a nice recovery.

What I’m doing

I’ve held the stock since it was $3.39 per share, adding more over time after significant pullbacks. Honestly, I wish I’d added more a couple weeks ago. The price targets, contract wins, and revenue jumps all seem like an improving outlook. I’m holding what I have and waiting for potential better entries to add more.

The other view also matters: if EBITDA loss does not recover or a stall in contracts and backlog takes place, it could be a warning of growth decelerating, breaking the thesis of this price pullback being an opportunity.

Sources: Ondas Holdings SEC filings and earnings materials, company press releases (ir.ondas.com), the Q4 2025 and Q1 2026 earnings results and earnings call transcript, the January 2026 $1B stock and warrant offering 8-K and prospectus supplement, the May 2026 proxy statement and CEO shareholder letter, the July 2026 DZYNE Technologies acquisition 8-K and press release, the J Capital Research short report and related coverage (February 2026), GuruFocus coverage of order announcements and insider transaction data, DefenseScoop reporting on FY2027 DoD drone budget proposals, CNBC and Sherwood News reporting on the Q1 2026 earnings reaction and U.S. government drone-industry investment, TipRanks and InsiderFinance coverage of the Q1 2026 earnings call and EBITDA profitability timeline, Needham, HC Wainwright, and MarketBeat analyst commentary and price targets, peer data for Kratos, AeroVironment, and Red Cat via Robinhood, short interest data via Benzinga/Quiver Quantitative, price data via Robinhood as of July 24, 2026.

Nothing in this article is investment advice. It reflects independent research and personal conclusions, not a recommendation, and carries no responsibility for how anyone else chooses to act on it. Do your own research before making any investment decisions.