Amazon.com and Krispy Kreme have been highlighted as Zacks Bull and Bear of the Day

Here is a synopsis of all five stocks:

Bull of the Day:

Amazon.com, the e-commerce and cloud-computing giant, has broken out to new highs following a standout quarterly earnings report that appears to have materially improved the investment case.

AWS growth accelerated sharply, margins expanded and Amazon disclosed that its custom AI chip business has reached a roughly $25 billion annualized revenue run rate. Advertising growth also remained strong, while the company continues to invest aggressively in AI infrastructure.

More importantly, the results provided some of the clearest evidence yet that hyperscaler AI spending can generate substantial returns. That appears to have shifted the broader narrative around AI capex from one centered on cost and free cash flow toward one increasingly focused on monetization and earnings growth.

Wall Street has responded quickly, with earnings estimates revised sharply higher over the past week. Combined with a top Zacks Rank, accelerating price momentum and a valuation that remains compelling relative to Amazon's history, AMZN currently stands out as one of the most attractive stocks in the Magnificent Seven.

AMZN Estimates Snaps Higher After Earnings Report

Following Amazon's stellar quarterly results, analysts moved quickly to raise their earnings expectations. Most notably, the Zacks Consensus Estimate for next year has jumped 47.6% to $13.06 per share.

Based on that outlook, AMZN now trades at just 20.8x forward earnings, a compelling valuation given the company's growth profile and improving profitability.

Sales are expected to increase 15.7% this year and another 14% next year, while EPS are projected to grow 18.7% annually over the long term. With estimates moving sharply higher and the valuation remaining relatively modest, Amazon offers an attractive combination of growth, earnings momentum and multiple expansion potential.

Shares of Amazon on the Verge of Another Breakout

Amazon shares surged nearly 25% in the days following earnings, pushing the stock to new record highs. Since then, AMZN has spent the last several sessions consolidating those gains in a tight bull flag just below the highs.

A decisive breakout above the consolidation, near the $280 level, could signal the start of another leg higher. With earnings estimates rising sharply and fundamental momentum accelerating, the technical setup provides another bullish signal for the stock.

Should Investors Buy Shares in AMZN?

Amazon currently checks nearly every box investors should be looking for: accelerating growth, sharply rising earnings estimates, a reasonable valuation and strong price momentum.

The setup is somewhat reminiscent of Alphabet in early 2025, when improving fundamentals and a compressed valuation eventually forced investors to re-rate the stock higher. Amazon may now be entering a similar phase.

With AWS accelerating, AI monetization becoming more visible and shares pressing against another breakout level, AMZN stands out as one of the most compelling opportunities in the Magnificent Seven today.

Bear of the Day:

Krispy Kreme, the iconic doughnut chain, has been a major disappointment since returning to the public markets in 2021. Shares have lost the vast majority of their value as weak unit economics, slowing US growth and an increasingly burdensome debt load overwhelmed what initially looked like an attractive expansion story.

The failed McDonald's rollout only added to those problems. Krispy Kreme had hoped its hub-and-spoke distribution network could dramatically expand product availability, but the strategy proved costly to operate and many delivery locations failed to generate sufficient returns. At the same time, elevated interest expense and years of negative earnings left the company with very little financial flexibility.

There are finally some signs of improvement. Krispy Kreme's turnaround plan is focused on refranchising international markets, reducing debt and concentrating investment on its most profitable opportunities. First-quarter adjusted EBITDA increased 38%, free cash flow turned positive and net leverage fell to 5.5x from 6.7x the previous quarter.

Unfortunately, Wall Street is not yet convinced the turnaround will translate into sustainable earnings growth yet. Analysts have continued to cut estimates, while revenues are expected to contract this year and again next year, earning DNUT a Zacks Rank #5 (Strong Sell).

It pains me somewhat to make Krispy Kreme the Bear of the Day, I remain a huge fan of the product, but the stock and the doughnuts are two very different things. There may ultimately be an attractive recovery story here, especially if deleveraging continues, but it is difficult to get constructive until earnings estimates finally begin trending higher.

Analysts Downgrade DNUT Stock

Earnings estimates for Krispy Kreme have been trending lower for several years, and that negative revision cycle remains intact. Over the recent period, the consensus estimate for next quarter has fallen 14.9%, while next year's estimate has been cut by 43%. The current-year outlook was revised slightly higher, but only from a loss of $0.07 per share to a loss of $0.06.

Krispy Kreme did manage to beat expectations in its latest quarterly report, but those estimates were already set at depressed levels. More importantly, the broader growth outlook remains weak. Sales are currently projected to decline 13.1% this year and another 9% next year.

Until those revenue trends stabilize and analysts begin raising earnings expectations more meaningfully, it is difficult to make a convincing case that DNUT's fundamental turnaround has taken hold.

Should Investors Avoid DNUT Stock?

For now, I think the answer is yes. Krispy Kreme is making progress on debt reduction and cash flow, but the operating outlook remains too weak to overlook. Revenue is still expected to contract, earnings estimates continue to move lower and leverage remains elevated.

That does not mean the turnaround cannot eventually work. If sales stabilize, deleveraging continues and estimate revisions finally turn positive, DNUT could become an interesting recovery story. Until then, however, there is not enough fundamental evidence to justify stepping in front of the negative earnings trend.

Additional content:

Schwab Stock Gains +6% in a Month: Buy Now or Wait for a Pullback?

Charles Schwab, one of the leading brokerage firms in the United States, has seen its stock rise almost 6% in a month. The company's shares even hit an all-time high of $109.05 during yesterday's trading session. 

Schwab's peers, Interactive Brokers Group and Robinhood Markets, have recorded 7.9% and 20.1% declines, respectively, over the same period. The stock has also outperformed than the industry and the S&P 500.

What Fueled the Surge in SCHW Stock?

As illustrated in the chart above, Schwab shares began trending higher following the release of its second-quarter 2026 results on July 21. The stock has since sustained much of that momentum, extending its upward run despite intermittent periods of sideways trading.

SCHW's earnings and revenues comfortably surpassed the respective Zacks Consensus Estimate, supported by broad-based strength across its businesses. Net revenues reached a record level, driven by robust trading activity, rising demand for advisory services and a stable interest-rate environment since December 2025. Revenues climbed 21% year over year to $7.07 billion, while total client assets reached a record $13.08 trillion.

Schwab added 1.4 million new brokerage accounts during the quarter. As of June 30, 2026, the company had 39.8 million active brokerage accounts, 2.4 million banking accounts and 5.9 million corporate retirement plan participants.

Further, clients' Daily Average Trades (DATs) surged to a record 11.9 million. Though management does not expect this elevated pace to persist, it now projects DATs of approximately 10.6 million for 2026, up from roughly 8.7 million targeted in the Investor Day scenario, reflecting record year-to-date trading activity.

This, along with favorable trends in trading, lending and equity markets, prompted Schwab to raise its 2026 revenue growth outlook to 17.5-18.5% year over year. Previously, the company had projected revenue growth in the 14-15% range. 

These factors helped fuel the rally in Schwab shares. The advance was further aided by broader market strength, supported by robust corporate earnings, favorable macroeconomic trends and some easing of concerns surrounding the ongoing Middle East conflict.

Other Factors Supporting Schwab

Schwab has continued to build scale in advice and managed investing, which generates higher revenue per client asset than self-directed activity. This has supported steady growth in wealth and banking solutions. Total managed investing solutions revenues recorded a CAGR of 11.1% over the five years ended 2025, while total client assets witnessed a 12.2% CAGR. Both metrics continued to advance in the first half of 2026. 

Prior acquisitions, including TD Ameritrade, USAA's IMCO assets, Wasmer Schroeder and Motif, have strengthened Schwab's distribution reach and product capabilities, while Forge adds exposure to private markets. The company's scale across retail brokerage and RIA custody continues to support durable account growth and net new asset inflows, even during periods of market volatility. 

Schwab is also expanding its adviser base and plans to open roughly a dozen new branches in 2026. Its Teen Investor account further broadens the company's reach among younger clients and supports long-term relationships. Over time, this continued shift toward advice and managed solutions should enhance monetization of its growing client asset base while reducing reliance on more cyclical trading revenues.

Schwab is moving from product development to rollout, aiming to deepen client engagement and expand fee-based growth. The company launched Portfolio Insights, its first generative AI tool for retail clients, and plans to introduce generative search on schwab.com and an Investor AI assistant in 2026. Like Interactive Brokers and Robinhood, Schwab is expanding into spot cryptocurrency trading, initially offering Bitcoin and Ether. These offerings are designed to personalize advice, improve service efficiency and broaden distribution while retaining human oversight and safeguards.

Schwab's balance sheet and earnings profile support ongoing capital distributions. The company remains focused on maintaining a low-cost capital structure, which has been supporting its capital distributions. In January 2026, it announced a 19% hike in the quarterly dividend to 32 cents per share. In the past five years, the company raised dividend payouts five times. Schwab announced a new repurchase plan worth $20 billion in July 2025. Management expects to maintain a 20-30% payout of GAAP earnings in the near term.

Analyst Sentiments Bullish for Schwab

Over the past 30 days, the Zacks Consensus Estimate for 2026 and 2027 earnings has moved higher to $6.46 and $7.83, respectively. This implies year-over-year growth of 32.7% for 2026 and 21.1% for 2027.

Schwab's Valuation Analysis

Schwab's valuation remains a point of contention. The stock's forward 12-month price-to-earnings (P/E) ratio is higher than the industry average, indicating that much of its expected growth is already factored into the stock price. This leaves little room for error and makes the stock vulnerable to any unfavorable developments or earnings misses.

Schwab is currently trading at a trailing 12-month forward P/E of 14.48X, which is above the industry average of 14.00X.

In contrast, the SCHW stock is inexpensive compared with Interactive Brokers and Robinhood. At present, Interactive Brokers is trading at 28.87X forward 12-month P/E and Robinhood at 38.17X.

Should You Buy Schwab Stock or Stay on the Sidelines?

Despite elevated expenses, competitive pressures and sensitivity to market activity, Schwab's growth prospects remain compelling. Strong client asset growth, record trading activity, expanding managed investing revenues and rising brokerage accounts support its earnings trajectory. 

Management's higher 2026 revenue outlook, upward earnings estimate revisions and continued investments in AI, advisory services and digital assets further strengthen the long-term story. Moreover, SCHW trades at a substantial discount to Interactive Brokers and Robinhood despite solid fundamentals and improving growth visibility. 

Supported by robust capital returns and durable scale advantages, the recent rally does not appear overextended, making Schwab stock worth buying at current levels.

SCHW carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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