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Chicago, IL – August 18, 2025 – Zacks Equity Research shares Astera Labs ALAB as the Bull of the Day and Conagra Brands CAG as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Kinder Morgan, Inc. KMI, MPLX LP MPLX and The Williams Companies, Inc. WMB.
Here is a synopsis of all five stocks.
Astera Labs, a Zacks Rank #1 (Strong Buy), is a global leader in purpose-built connectivity solutions for rack-scale AI systems. The company is a pioneer in software-defined architecture that is both scalable and customizable. The stock is displaying relative strength, breaking out to the upside amid a bullish move that pushed shares to new all-time highs.
The price movement is a sign of strength as we head deeper into the second half of the year. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.
Astera Labs is part of the Zacks Internet – Software industry group, which currently ranks in the top 30% out of more than 250 industries. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has year-to-date.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top industries, we can dramatically improve our stock-picking success.
Semiconductor stocks and related companies remain at the heart of the AI movement.
Astera Labs has been a major beneficiary. The company designs and manufactures semiconductor-based connectivity solutions for cloud and AI infrastructure. Astera offers an intelligent connectivity platform and high-speed connectivity integrated circuits as well as modules, boards, and other related products used in data centers.
Partnerships remain a key catalyst for Astera. The company has deepened its collaboration with chip leader Nvidia as it integrates NVLink Fusion into its connectivity platform, delivering low-latency, memory-coherent links for GPU clustering. These are essential for powering the next generation of large language models and agentic AI models.
ALAB stock has broken out to all-time highs following its latest earnings release. The broader technology sector is providing a durable backing for this industry leader.
Astera has exceeded the earnings mark in each quarter since last year’s IPO.
Earlier in August, the AI infrastructure provider delivered second-quarter earnings of 44 cents per share, which marked a 33.3% beat relative to consensus estimates. Revenues of $191.93 million surpassed projections by 11.1%. The figures translated to 238% year-over-year bottom-line growth on a 150% top-line improvement.
The company has delivered a trailing four-quarter average earnings surprise of 32.2%. Consistently beating earnings estimates is a recipe for success.
For the current quarter, the San Jose, California-based company expects to earn an adjusted 39 cents per share on sales of $206.5 million. Prior to the latest earnings release, Wall Street had been forecasting Q3 earnings of 34 cents on $181 million in sales. Clearly, investors are reacting positively to the lifted guidance.
Analysts are now in agreement and have raised their Q3 estimates by 14.71% in the past week to align with company expectations. The projected 39-cent profit in the current quarter would translate to a nearly 70% growth rate relative to the same quarter in the prior year.
Chief Executive Jitendra Mohan remains upbeat on future growth. “Astera Labs is at the forefront of the AI infrastructure transformation, and we are accelerating our investments to realize our vision of rack-scale connectivity in next-generation AI systems,” Mohan said in a news release.
This market leader has seen its stock advance more than 200% off the April lows. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Astera stock has broken out to all-time highs following the latest earnings announcement:
Notice how shares found support in June at both the 50-day (blue line) and 200-day (red line) moving averages, which are sloping up. The stock had been making a series of higher highs over the past few months. With both strong fundamental and technical indicators, ALAB stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Astera has recently witnessed positive revisions. As long as this trend remains intact (and Astera continues to deliver earnings beats), the stock will likely continue its bullish run.
Backed by a leading industry group and history of earnings beats, it’s not difficult to see why Astera Labs is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.
Recent positive earnings estimate revisions should also serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. If you haven’t already done so, be sure to put ALAB on your shortlist.
Disclosure: ALAB is a current holding in the Zacks Headline Trader portfolio.
Conagra Brands operates as a consumer-packaged goods food company primarily in the United States. The company offers both shelf-stable and temperature-controlled food products, as well as branded and customized products including entrees, sauces, and other culinary items.
Founded in 1919 and headquartered in Chicago, Illinois, Conagra maintains a diverse product portfolio and incorporates alterations within it as per the preference pattern of its customers. Some iconic brands of the company are Birds Eye, Duncan Hines, Healthy Choice, Marie Callender's, Reddi-wip, Slim Jim, Angie's, BOOMCHICKAPOP and many more.
Despite a legacy of crafting exceptional food with an unwavering commitment to innovation, Conagra faces mounting challenges across its operations driven by persistent cost inflation, soft volumes and unfavorable operating leverage. Profitability continues to erode and margin pressure is expected to deepen in the near-term.
The company’s Foodservice segment remains under strain due to weak demand and limited recovery in commercial traffic, while international operations suffer from adverse currency movements. Management has offered a strategic vision focused on frozen products and snacks, but short-term guidance reflects muted sales growth, shrinking margins and declining earnings.
A Zacks Rank #5 (Strong Sell) stock, Conagra Brands is a component of the Zacks Food – Miscellaneous industry group, which currently ranks in the bottom 27% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has over the past few months
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
CAG shares have been underperforming the market over the past year. The stock is hitting a series of lower lows and represents a compelling short opportunity as we head further into the second half of 2025.
Conagra Brands has fallen short of earnings estimates in three of the past four quarters. Back in July, the company reported fiscal fourth-quarter earnings of 56 cents per share, missing the Zacks Consensus Estimate by -5.1%.
Conagra has posted a trailing four-quarter average earnings miss of -3.6%. Consistently falling short of earnings estimates is a recipe for underperformance, and CAG is no exception.
The company has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by -26% in the past 60 days. The fiscal Q1 Zacks Consensus EPS Estimate is now $0.37 per share, reflecting negative growth of -30.2% relative to the year-ago period.
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
CAG stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average (blue line) crosses below its 200-day moving average. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen more than 25% this year alone.
Continued macroeconomic uncertainty, tariffs and inflation further cloud the outlook, leaving execution risk elevated and investor confidence tested.
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that CAG is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.
A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of CAG until the situation shows major signs of improvement.
During the initial phase of the pandemic, when vaccines were unavailable, the world faced significant uncertainties. Crude oil prices experienced an unprecedented plunge, falling to a negative $36.98 per barrel on April 20, 2020. However, the rapid development and rollout of vaccines facilitated the gradual reopening of economies, leading to a remarkable recovery in the pricing of West Texas Intermediate (WTI) crude, which soared to $123.64 per barrel by March 8, 2022. Oil price data are from the U.S. Energy Information Administration.
This highlights the inherent exposure of most energy companies to extreme volatility in commodity prices. However, unlike most energy companies, Kinder Morgan, Inc., MPLX LP and The Williams Companies, Inc. are not highly vulnerable to commodity prices.
Although the fate of energy players is highly dependent on oil and gas prices, stocks in the midstream space have lower exposure to volatility in commodity prices than oil and gas producers. This is because midstream players generate stable fee-based revenues since the transportation and storage assets are being booked by shippers for the long term. Hence, their business model is relatively low-risk, which indicates considerably less exposure to oil and gas prices and volume risks.
Kinder Morgan: With its operating interests in oil and gas pipeline networks spread across 79,000 miles, KMI is a leading energy infrastructure company in North America. It derives most of its earnings from take-or-pay contracts, generating stable fee-based revenues.
The midstream energy major is likely to grow on the back of its business model, which is relatively resilient to volume and commodity price risks.
MPLX: MPLX’s midstream business comprises transporting crude oil and refined products. Thus, the partnership generates stable cash flows from its long-term contracts with the shippers. The partnership’s crude oil and natural gas gathering systems also generate stable fee-based revenues.
The Williams Companies: It is well-poised to capitalize on the mounting demand for clean energy since it is engaged in transporting, storing, gathering and processing natural gas and natural gas liquids.
With its pipeline networks spread across more than 30,000 miles, The Williams Companies connects premium basins in the United States to the key market. WMB’s assets can meet a considerable proportion of the nation’s natural gas consumption, which is utilized for heating purposes and clean-energy generation.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index.Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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This article originally published on Zacks Investment Research (zacks.com).
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