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Chicago, IL – October 10, 2025 – Zacks Equity Research shares Carnival Corp. & plc CCL as the Bull of the Day and Constellation Brands, Inc. STZ as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Microsoft MSFT, Amazon AMZN and Alphabet GOOGL.
Here is a synopsis of all five stocks:
Carnival Corp. & plc recently posted another record quarter. People are still cruising. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by 47.9% this year.
Carnival is the largest global cruise company. It's brands include Carnival Cruise Line, AIDA Cruises, Costa Cruises, Cunard, Holland America Line, P&O Cruises, Princess Cruises and Seabourn.
On Sep 29, 2025, Carnival reported it's third quarter 2025 results and beat on the Zacks Consensus. It was the 12th consecutive earnings surprise.
Earnings were $1.43, beating the Zacks Consensus of $1.32 by $0.11.
Revenue was a record of $8.2 billion, up over $250 million from the year ago quarter on lower capacity. This was the 10th consecutive quarter that Carnival has posted record revenue.
Gross margin yields were 6.4% higher than last year.
All-time high net yields were 4.6% higher than 2024 and outperformed the company's June guidance by 1.1 points driven by strong demand and onboard spending.
Carnival's exclusive Celebration Key beach destination in the Bahamas also opened in the quarter and should be a growth catalyst for 2026.
Everyone has been watching the leisure and hospitality companies for clues about the strength of the consumer. But Carnival isn't seeing any slowdown.
Since May, Carnival's booking trends have continued to strengthen. It has higher booking volumes than last year and is far outpacing capacity growth.
It has already booked nearly half of 2026, which is in line with last year's record levels at the same time, but Carnival has been able to get historical high prices for North America and Europe segments.
Bookings have started for 2027 cruises. Carnival said it was already off to a great start, achieving record booking volumes in the third quarter.
Carnival is bullish after another strong quarter. It raised its net yields guidance to up 5.3% compared to 2024. That is up 0.3 percentage points over the June guidance.
The analysts are bullish as well. 6 estimates were raised for both 2025 and 2026 in the last month.
The 2025 Zacks Consensus Estimate jumped to $2.10 from $2.00 during that time. That is earnings growth of 47.9% as the company made just $1.42 in 2024.
But 2026 also looks strong with another 12.9% in earnings growth expected. This is what it looks like on the price and consensus chart.
Carnival shares recently hit a new 5-year high but have retreated from that in the last month.
Over the last 30 days, shares are down 10.2%, although they still remain higher on the year, up 13.8%. That is underperforming the S&P 500 by 1%, as it is up 14.8% year-to-date.
Carnival is cheaper on the pullback. It's now trading with a forward price-to-earnings (P/E) ratio of 13.7. A P/E ratio under 15 usually indicates a stock is a value.
Carnival also has a PEG ratio of 0.6. A PEG ratio under 1.0 indicates a company has both value and growth.
For investors looking for a company with record revenue, but is still trading at a discount, Carnival should be on your short list.
Constellation Brands, Inc. is facing headwinds as consumers are drinking less alcohol. This Zacks Rank #5 (Strong Sell) is expected to see a double digit decline in earnings in Fiscal 2026.
Constellation Brands is a leading producer and marketer of beer, wine, and spirits. It has operations in the US, Mexico, New Zealand, and Italy.
It's beer brands include the Corona Extra and Modelo Especial and others. It's wine brands include Robert Mondavi Winery, Kim Crawford and others. Constellation's craft spirits include Casa Noble Tequilla and High West Whiskey, among others.
On Oct 6, 2025, Constellation Brands reported its second quarter 2026 results and beat on the Zacks Consensus by $0.26. Earnings were $3.63 versus the Zacks Consensus of $3.37.
It has beat 2 out of the last 4 quarters.
Revenue was down 15% to $2.48 billion year-over-year. It continues to see a challenging macroeconomic environment. The consumer is spending less on alcoholic beverages.
Tariffs are hitting as operating margin declined 200 basis points due to the tariffs on aluminum.
On Sep 2, 2025, Constellation Brands surprised the Street with a business update. It cut its full year earnings and sales outlook. It reiterated that lowered outlook again with this earnings report.
Sales are due to decline 4% to 6% for the year. The analysts are more bearish, however. Zacks Consensus is looking for a decline of 11.1%.
Earnings guidance was lowered in September to $11.30 to $11.60 from $12.60 to $12.90. It kept that guidance.
The Zacks Consensus is looking for $11.50. That's down 16.6% from last year when Constellation Brands made $13.78.
Here's what the earnings look like on the 5-year price and consensus chart.
Shares of Constellation Brands have taken a tumble in 2025. It's down 35.8% year-to-date and is near its 5-year lows.
That's underperforming the S&P 500 which is up 14.8% in 2025.
Constellation Brands is cheap. It has a forward price-to-earnings (P/E) ratio of 12.4. A P/E ratio under 15 can indicate a company is a value.
It also has a low PEG ratio of just 0.4. A PEG ratio under 1.0 usually indicates a company has both growth and value.
Constellation Brands is shareholder friendly. It has repurchased $604 million in shares through Sep 2025. It also pays a dividend, which is currently yielding 2.9%.
For investors interested in a beverage company like Constellation Brands, you might want to wait on the sidelines for the macroeconomic environment to improve.
Microsoftis betting big on artificial intelligence and cloud infrastructure to drive its next phase of growth. The company plans to ramp up capital expenditures to nearly $30 billion in the first quarter of fiscal 2026, reflecting its AI-first strategy to expand data center capacity, GPU availability and global infrastructure. These investments aim to strengthen Microsoft's leadership in the rapidly expanding AI economy and position Azure as the preferred platform for next-generation workloads.
Looking ahead, Microsoft's Intelligent Cloud remains a key growth driver as enterprises accelerate their AI adoption.
With Azure at its center, the company expects Intelligent Cloud revenue growth of 25% to 26% in the first quarter of fiscal 2026 and Azure growth of around 37% in constant currency. Microsoft has announced multi-billion-dollar investments in AI and cloud infrastructure across key international markets, including India and the U.K.
Recent advancements further validate this strategy. Microsoft has integrated GPT-5 across Microsoft 365, GitHub, Visual Studio and Azure AI Foundry. It launched the Microsoft Agent Framework (MAF) for multi-agent AI systems and enhanced GPT-4o models to boost GPU efficiency. The addition of OpenAI's multimodal models in Azure AI Foundry and new partnerships like the Harvard Medical School Copilot license further expand its AI footprint.
According to the Zacks model, Microsoft's total revenues are expected to grow 13% in fiscal 2026 and 14.3% in fiscal 2027 year over year, showing steady momentum. This aligns with the booming AI infrastructure market, projected by Fortune Business Insights to witness a compound annual growth rate of 29.1% from 2025 to 2032 and reach $356.14 billion. With record AI investments and strong enterprise adoption, Microsoft's $30B AI build-out is set to drive its next major growth phase.
Amazonis intensifying its AI investment race against Microsoft through massive AWS expansion. Amazon plans nearly $100 billion in AI-related capital spending in 2025, which will outpace rivals, to bolster AWS infrastructure and custom AI chips. Amazon's Bedrock platform enables clients to use multiple models, including Anthropic, Meta and Stability AI. While Microsoft relies on OpenAI, Amazon focuses on vertical integration and scalability. With AWS still holding roughly 30% of cloud market share, Amazon leverages its dominance to drive faster, broader AI innovation and enterprise adoption.
Alphabetis escalating its AI investment race with Microsoft, boosting 2025 spending to $85 billion for data centers and cloud infrastructure. Alphabet leverages its DeepMind and Google Research arms to advance models like Gemini, powering AI features across Search, YouTube and Android. Alphabet's strategy integrates consumer and enterprise AI through Google Cloud, supported by global infrastructure expansion and acquisitions such as Wiz. With strong data advantages and product integration, Alphabet remains a dominant force in the AI innovation race.
MSFT shares have appreciated 24.5% in the year-to-date period, outperforming the Zacks Computer – Software industry and the Zacks Computer and Technology sector's growth of 20.9% and 22.8%, respectively.
From a valuation standpoint, Microsoft trades at a premium with a forward 12-month Price/Sales ratio of 11.68X compared with the industry's 8.63X. MSFT has a Value Score of D.
The Zacks Consensus Estimate for MSFT's fiscal 2026 earnings is pegged at $15.41 per share, up 0.4% over the past 30 days. The estimate indicates 12.98% year-over-year growth.
Microsoft currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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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/performancefor 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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