From 24/7 Wall St. · Joel South · · 2m
Three stocks poised to break out before September ends
A chipmaker and two power producers are beating forecasts while trading well below their peaks, creating a rare gap between fundamentals and stock price.
In brief
A chipmaker and two power producers are beating forecasts while trading well below their peaks, creating a rare gap between fundamentals and stock price. When strong operational results and new contracts fail to move stock prices higher, it often signals an opportunity before the market catches up. Originally reported…
AI infrastructure gap widens
Three major data center beneficiaries are trading well below their peaks despite raising forecasts and signing hyperscaler contracts. The divergence between fundamentals and stock price creates opportunity heading into month-end.
Marvell's custom silicon ramp accelerates
Marvell raised fiscal 2027 revenue guidance to $12 billion and expects data center revenue to grow 60% this year. Custom silicon is projected to more than double in fiscal 2028, aided by an expanded Google partnership.
Marvell's concentration risk
The stock sits at $244.25, up 188% year to date but below its $329.80 peak. Heavy reliance on a small set of hyperscalers and a forward PE of 55 leave little room for error.
Constellation's nuclear deals surge
Constellation signed 920 megawatts of long-term nuclear contracts with investment-grade customers, plus Meta and Microsoft agreements. Q2 adjusted EPS beat consensus by 9.5% while management raised full-year guidance.
“Once we do get clarity, we're going to see here in PJM what we've seen in many places where deal flow will kick off with a bit of a bang.”
Constellation's stock disconnect
Shares closed at $254.71, down 27.6% year to date and 10.5% in just the past week. Management projects base EPS growth of 20% annually through 2029 with $2.8 billion in buybacks remaining.
Vistra trades at peer discount
Vistra trades at a forward PE of 14, well below Constellation's multiple, while Q2 adjusted EBITDA jumped 30% year over year. The company formed a digital infrastructure joint venture with NVIDIA, KKR, and the Kuwait Investment Authority.
“The customers, the large load customers, they are interested in contracting with existing, and they are interested in contracting at a premium with existing because it's still a discount to what new build costs.”
Vistra's hedging and integration
Shares finished at $140.68, down 12.6% year to date. The company holds roughly 100% of 2026 generation volumes hedged and 94% for 2027, providing visibility while managing derivative mark-to-market noise.
Data center demand accelerates
The EIA expects data center server demand to climb sharply through 2050, with the South Atlantic and West South Central regions growing fastest. Both silicon and dispatchable megawatts are essential to meet this demand.
Catalysts ahead in October
Marvell's October 6 Investor Day is the near-term catalyst. PJM's expected large-load framework in early 2027 is the medium-term catalyst for Constellation and Vistra.
What to remember
When strong operational results and new contracts fail to move stock prices higher, it often signals an opportunity before the market catches up.
