Custom Chips and Custom Orders Could Redefine AI Leadership

One of the biggest winners in the AI supply chain just locked in a massive contract. With fresh guidance and record demand, the setup could offer traders a rare window into sustained momentum.

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Western Digital | WDC

Price: $92.05

Western Digital continues to ride the AI storage wave. Shares have climbed 93% this year, fueled by robust demand for high-capacity drives in cloud and AI training workloads.

Last quarter’s $2.6B in revenue represented 30% growth, with gross margins improving to 41% from 35% a year earlier.

Management also reduced debt by $2.6B, reinforcing balance sheet strength.

The market has rewarded WDC with a technical breakout, highlighted by a “Golden Cross” on the charts.

Analysts remain bullish, citing momentum in HDDs as hyperscalers prioritize cost-efficient data solutions.

A modest dividend reinstatement signals confidence in long-term cash flow.

Why it matters: WDC offers leveraged exposure to AI infrastructure. If demand for mass storage continues at pace, the stock may retain momentum, though volatility will remain high given cyclical hardware dynamics.

Palo Alto Networks | PANW

Price: $194.45

Cybersecurity heavyweight Palo Alto Networks is back in the spotlight after announcing plans to acquire CyberArk for $25B, its largest deal ever.

The move positions PANW deeper in identity security, a logical expansion given that most breaches stem from compromised credentials.

Alongside the deal, Q4 revenue grew 16% to $2.54B, with product sales up 19%. Gross margin held at an impressive 73%.

Analysts have responded with a wave of target hikes. Piper Sandler reiterated its $225 target, while RBC and Rosenblatt lifted theirs above $220, keeping Buy ratings intact. 

Shares at $192 are up 6% this year, lagging broader tech but consolidating near key support.

CEO Nikesh Arora has also voiced skepticism about “agentic AI browsers” in enterprises, emphasizing PANW’s focus on controlled, credential-secure systems.

Why it matters: With cybersecurity budgets staying resilient, PANW’s expansion into identity security could support double-digit growth into 2026.

Execution on the CyberArk deal will be the swing factor.

Boeing | BA

Price: $229.75

Boeing’s defense unit faces turmoil as 3,200 machinists strike for a second month, disrupting F-15 fighter jet and missile system output.

Management has begun hiring replacement workers, a move that risks escalating tensions with the union.

The company offered a 20% wage hike and $5,000 bonuses, but negotiations remain stalled.

Shares at $231 are still up 34% this year, thanks to a recovery in commercial deliveries and optimism for defense contracts. 

Yet headlines around labor unrest add uncertainty. Defense accounted for 30% of Boeing’s $42B in H1 revenue, making this strike more than a sideshow.

Investors recall last year’s seven-week commercial strike that hurt production and highlighted supply-chain fragility.

Why it matters: Boeing’s turnaround story rests on stable execution.

Prolonged strikes could delay defense deliveries and weigh on sentiment, offsetting momentum in commercial aviation recovery.

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Lululemon | LULU

Price: $167.77

Lululemon plunged more than 12% after Q2 earnings, despite topping EPS at $3.10 versus $2.88 expected. The culprit: guidance. 

Management cut full-year EPS to $12.77–$12.97, well below Wall Street’s $14.45 consensus, citing tariffs and loss of de minimis shipping exemptions.

That tariff hit alone could shave $240M off profits this year.

Revenue slightly missed at $2.53B, and U.S. comps fell 4%, underscoring product fatigue in lounge and social categories.

CEO Calvin McDonald admitted assortments had become “too predictable” and pledged to lift new styles to 35% of offerings by spring.

Shares have been cut nearly in half this year, now at $206, down from highs above $420.

Why it matters: The brand still commands global recognition, but investors need proof that product innovation can reignite demand.

Without a design reset, margin pressure may linger.

Broadcom | AVGO

Price: $335.01

Broadcom stunned the Street with fiscal Q3 results that topped expectations and a bold forecast for Q4.

Revenue hit $15.96B, up 22% from a year ago, with adjusted EPS of $1.69 beating consensus by four cents. 

More importantly, management revealed a $10B custom chip order from a new hyperscale client, a deal that cements its position as a serious challenger to Nvidia in AI semiconductors.

AI-specific sales surged 63% to $5.2B, with networking parts and VMware software adding fuel.

The company expects AI revenue to climb to $6.2B this quarter, pushing full-year totals even higher than earlier projections.

Shares jumped after hours and now sit near record highs around $320, up 32% year to date and nearly double in the last 12 months.

Why it matters: With a $1.4T market cap and growing XPU pipeline, Broadcom’s ability to deliver on massive custom orders could be the next leg in AI hardware leadership, a critical test for bulls betting on share gains versus Nvidia.

From AI chips to consumer apparel, this week’s catalysts spotlight execution.

Broadcom and Western Digital demonstrate the benefits of scaling AI demand, while Palo Alto places a significant bet on identity security.

Boeing and Lululemon highlight risks when operations falter — labor unrest and stale product cycles.

Investors should watch who executes cleanly, because in this market, performance and positioning trump size.

Stat of the Day – 8%
That’s the current Polymarket-implied probability of a U.S. recession, down from 66% four months ago, also the lowest level this year.