The Big 3: VRT, BE, GOOGL

get your podcasts. Welcome back to trading 360. I'm Marley Kayden. It's time for the big three. We've got three stocks for you and three charts we'll be taking you through. Ben Watson doing the heavy lifting on the charts here to take us through picks for today. Jessica Inskip, director of Investor research@stockbrokers.com. Great to have you both on. Jessica, thank you for joining us from the floor of the nice. A nice green day to start the morning. But we've got geopolitical risk back on the table. We're looking at oil close to $85 a barrel this morning. How are you looking at the market action we're seeing today. Well it seems like the market's still stuck sideways in a trading range. I think that geopolitical risk heightens that where the market's waiting on a catalyst. Hopefully that catalyst would be record earnings which it seems like we are set up to. We still have earnings increases. The AI trade is still very much intact. And there is this healthy rotation into the equal weight. So I see a really positive setup. However a resistance from the overall market to move higher without that catalyst. And I was discussing with with Sam and Jay Woods before we came on and we were talking about one of the biggest risks of the market. And we were discussing the balance sheet and perhaps what Kevin Warsh will do next week and how that could possibly lead into some tightening underneath the surface, which could be a risk. So what that says to me is there's uncertainty with geopolitical tension. There is some uncertainty with the earnings picture, but in certainty as well with Kevin Warsh. And until we have more clarity on the table, I don't think we're going to have room to go higher even if earnings follow through. I don't think there's anyone who will disagree with the thought that uncertainty is the word of 2026 so far. But you said the AI trade is intact. I see we have a bit of an AI theme throughout your your big three today. So let's dive into your first one here. You've got Vertiv Holdings as your first pick, ticker VRT there in the industrial space. Why did they make it into your big three today? So I pulled a screen this morning, one that I pulled three different ones every single week. But this is the one mainly on fundamentals where I look at price performance relative to earnings expectations, look for increasing revenue as well as expanding profit margins. And two of the three fell on this list. And there was a cluster of industrials. So I thought I'd pick out those industrials because they look very healthy from an earnings raising target perspective. And as well as suiting to that AI build out in Vertiv was top on the list. The AI power infrastructure backbone is what I call it. From the numbers over the past month, they've had a slight EPS estimate change, just fragmentary. However, the revenue growth was up 30%, EBITDA margin growth 22%, and their A Picks and shovels AI data playout. We've talked about that before with the AI data center. That's where we see a lot of CapEx spend. We have got companies that are having very specific chips, but either way, it's still requires that data center, and I want to go where the money is flowing in. Vertiv seems to be one of those. The analyst consensus is still strongly bullish. They have geographic expansion along the way. So it's not just something that is domestic. We've got some alternative geography as well, which is boding well with. We want to consider being very diverse. That's important. And then they have this tailwind with AI infrastructure super cycle build out. I think that's important to be cognizant of. Something I want to be invested in is the data center. It's not going to last forever, but Vertiv is on the top of my list, especially from the industrial side. All right. And Ben, as we as we look at the technicals here, an interesting chart set up because, you know, a strong performer over the last 52 weeks, we got back up near those all time highs in June. But over the last month we're actually down almost 10%. So as you look at the technicals here what are you seeing. Well I'm going to pivot off of something that Jessica said. And that is this has a tailwind. And the thing that we have to remember from a technical analysis perspective is that tailwinds don't always blow at the same strength all the time. And so I think we're experiencing one of those periods of time, at least here on the one year daily chart on Vertiv, where you've had a very strong upward move through the last 2 or 3 earnings announcements, really kind of coming out of that November, December time frame. Now you're into this period, post the April earnings where you're getting a little bit of a pullback. 50 period moving average is slowing down. Maybe rolling back over a little bit. But you are finding a couple of fairly solid and well tested levels of support here right around that 275 mark below that kind of that gap edge area, if you will, at the 230 area. So if you were to draw a big box around that, that becomes kind of the major support level. But a couple of things also going on at the same time, we're seeing that RSI as an indication of momentum directionally had been rolling off a little bit. Now you're starting to see higher lows in RSI at the same time that you're seeing equal lows in the stock. So there is that kind of underlying bullish divergence going into this earnings next week. But if you shift the view to the three year weekly chart this longer term perspective. Now we're looking at a 200 period moving average. And that has been accelerating to the upside. We've seen a little bit of pullback. And this has been the strongest pullback that we've seen since the end of last year. That may just simply be reflective of some legislative and community concerns around data center build out. That may be slowing investing, but I don't think it's it's changing the overall trend here. And it's far, I think, from changing the overall trend. We're just experiencing perhaps a short term period of time where there's a little bit of negative momentum, but it's not breaking these major support levels. Marley All right. As we as we look at Vertiv, though, having a nice session even today, up about 3.5% as they move to your next pick here, Jessica, we've got Blum Energy as your next choice, a name with a lot of positive headline catalysts around it. I mean, looking at its year to date move, it's up 775%. What made you put Blum in the big three today? Well, again, it fell on that string and that screen with the industrial sectors where the earnings estimates was outperforming price from a delta differentiation. And it shows with the stats that I see over the past month, their EPS target has been raised over 4.75%. Their revenue growth is over 130%. And again, this is data center build out. And reliable energy is really the theme here. And they've had EBITDA margin growth of over 626%. That is an astronomically large number that we want to see sustained naturally. But what I think is interesting is they had this Brookfield partnership that supercharged them, but it's the full stack cost advantage, something UBS even spoke to, where it's a reduced reducing the need more from a costly grid to reliable power, where centers are really wanting to the steady power near those data centers, but they want it to be reliable. If you build out these data centers, we need them to be reliable. And Bloom Energy is a portion of that. And another component of this is there was some short sellers that came into Bloom Energy. A lot of it had to do with sourcing scandium, and they were ignoring some recent filings. It seems like where those short sellers were overblown, where they actually were able to solve and resolve those sourcing problems. So another catalyst that can certainly help push it higher. But again, industrials on that, I, I a build out data center build out. This is the reliable energy aspect. And how it showed up again was a screen where I'm just looking where something is sold off relative to earnings and analyst expectations. All right. As we look at bloom having a really nice pop today. JP Morgan raised its price target pretty significantly up to 3.46 from 2.67 here. But as I look at these charts Ben very similar looking from my perspective to vertices chart. What are you seeing. Oh for sure Marley. And again you see that rolling over of the 50 period moving average. In fact this is the longest period of time that bloom has spent below the 50 period moving average on a closing basis. Well, really, over the course of the last year, there was a bit of time in the December and into the January time frame where it was below. And then you saw a little bit into April earnings announcement. From then on, it's been really up, up and away. Now we're starting to see maybe coming back down and normalizing. So going back to to Jessica's screen that she pulled, you know, looking for price that's been selling off relative to overall projections going into this earnings announcement. However. And I think one key to this is if you take a look at the implied volatility chart on the bottom of this particular page, that implied volatility at the moment is the highest that it has been. Now it's rolling over a little bit with this pop today. But implied volatility is an expression of volatility which is an expression of potential movement. So there is some expectation for movement. And that can go both ways up and down. Again looking at the longer term chart puts kind of into a longer term perspective. Still well above the 200 period moving average on a weekly basis. And if you look at the momentum it's been pulling back, this is the deepest drop we've had in momentum. Looking at that MacD over the course of the last year. But at the same time, it's coming as an offset to that very strong parabolic upward momentum move that we saw after the April earnings. So you know momentum taketh and it giveth away. And and so we're we're kind of getting back to that level of support. So that remains the test at this level is right around this $200 mark. And we'll hear from bloom. They have their earnings next Thursday. So we may have another catalyst here for this name coming up in the very near term. But even closer than that is is your last pick in the big three. I know this is one of your top picks for the year in alphabet. Jessica. They've got their earnings coming up tomorrow. So how are you looking at alphabet right now. Absolutely. I love the way Ben just explains concepts in implied volatility. That was beautiful. I just want to give him a comment there nonetheless. Why I want to talk about Google and Alphabet specifically today is their new chip that has been released frozen version two pun intended. There is we're moving into this year of Agentic AI. Agentic AI comes with inference. Inference is a consistent cost to your your whatever you're utilizing with artificial intelligence, because the LLM needs to take it and digest it and it's digesting that, spitting it back out. That is ever so costly. I like to think of it as CapEx is your big build out. When we're looking at fundamentals of a company, inference is almost turning into something that will be opex because it's consistently required in order to keep the plumbing flowing, but it's slowing down. So the reasons why we've had these shift from GPUs, these general purpose GPUs, which was originally Nvidia, then they have a software mode with Cuda. We've got level two, which is your workload specific chips. Google's TPUs are going to fall in there that Amazon's Inferentia the new jalapeno chip from OpenAI. Now there is this other level that Google has unlocked with their frozen version two. And it's a model specific silicone. So with the CPUs they're very specific utilized for inference only, but they could be picked up and applied almost anywhere. Whereas with frozen it's taking Gemini and it's putting a piece of the model on that chip, which is a very strong bet. And I believe that's why they call it experimental on the end all be all architecture. That's something that we're constantly trying to solve. That's where the biggest opportunities are within artificial intelligence right now is understanding the bottlenecks. But taking that a step further and understanding the architecture that it's going to be needed for the solution going forward. And it's interesting studying just computer components and decisions that were made back in the 80s, where it needs to be really rethought to be extremely efficient. And I see Google has taken that step with TPUs, again, with experimental with this frozen version two. I just really enjoy saying that. And I, I, I think it's interesting because the architecture is going to be locked, but if it works and it creates the efficiency that they're saying, then we're going to see another catalyst forward with artificial intelligence, with Google leading the way. I also love all the names of the chips and the models. So I'm right there, right there with you. Although sometimes I have to do pronouncers on them. Kimmy, I had to look up. I was like, Kimmy! Kimmy. I'm not sure. But then as we look at alphabet, it's down 1% today. It's got its earnings coming our way tomorrow. Second best performer in the mag seven year to date. How are you looking at the technicals here. Well I've got to say as we put this relative to the other two that we've been looking at. You know one of these things is not like the other. One of these things just isn't the same because Google alphabet here in this particular case, kind of winding up in this symmetrical triangle, it's a different picture than what we were seeing in the other space. So I'm going to key off of Jessica's comment about that frozen chip and say investors are maybe in the point of just letting it go here, but you've got some upward momentum. It's sitting at this kind of near the apex of this symmetrical triangle under the 50 period moving average, a little bit weaker day today as it kind of rolls back off to this 345 level. And that could precipitate a break to the downside. But a break to the downside puts it back into a horizontal support. Maybe around that 325 mark or so. But momentum is pretty solid going into this earnings announcement tomorrow. That's not a guarantee. But you get that implied volatility that is extraordinarily high. Not the highest that it has been. But it is relatively high relative to the last two earnings announcements. And so that suggests again some expectation of movement. And by the way I'm just going to comment. This is one of the reasons why I like Jessica so much. She knows the way to my heart by commenting on my technical analysis, but taking a look at this longer term chart. And that's where we start to see the similar comparison. Very strong move to the upside in the weekly chart, pulling back into a fairly solid multiply tested level of support well above the 200 period moving average. And you look at this in terms of a trend strength indication. And that trend is not at all in the location of being threatened at this point. Marley doesn't mean it can't change, but it's sitting at a fairly strong level of support from a support level. All right. We're at a strong level of support just in advance of those earnings, which of course, we will have tomorrow live on market on close. But I really appreciate you both being with us for big three