Q3 2026
Q3 2026 IPS Newsletter — July Semiannual Leaderboard Update
- Run date:
- July 1, 2026
- Model:
- IPS
- Universe:
- Core Production Universe
- Benchmark:
- SPY adjusted total return
- Horizon:
- 12-month SPY-relative outperformance probability
Elite Compounder Stream
Q3 2026 Elite Compounders
IPS publishes three streams: Elite Compounders, Regime Alpha, and The Blend. Elite Compounders focus on durable structural quality and long-term participation strength. The Q3 update still favors AI infrastructure, but v6.1.3 is slightly more selective than the July 1 run. The Elite Compounder list remains anchored by the highest-quality AI and platform businesses. NVDA remains first on structural quality, AI infrastructure dominance, revenue acceleration, and SPY-relative participation — Q1 FY2027 revenue of $81.6B (+85% YoY) and Data Center revenue of $75.2B (+92% YoY). AVGO stays second on custom AI accelerators, AI networking, and infrastructure software; Q2 FY2026 revenue of $22.187B (+48% YoY), adjusted EBITDA $15.244B (69% of revenue), and AI semiconductor revenue of $10.8B (+143% YoY). GOOG and MSFT remain core platform compounders with more balanced AI exposure; tactical probabilities sit below NVDA/AVGO because they are less direct AI-bottleneck plays. META remains a Positive Alpha Candidate with active capex discipline. AMZN, AAPL, ORCL, ANET, and COST are Quality Watchlist names held below 60% on valuation, capex intensity, less direct AI bottleneck exposure, weaker relative-strength confirmation, or crowding.
1.NVDA — NVIDIA
Positive Alpha Candidate- Category
- Elite Compounder / AI Infrastructure Leader
- Structural
- 92 / 100
- Tactical
- 67%
- Key Theme
- AI accelerators and data-center compute
NVIDIA remains the highest-ranked Elite Compounder. Q1 FY2027 revenue reached a record $81.6B, up 85% YoY, with gross margin near 75%. That keeps NVDA at the top of the structural-quality stack.
IPS view: IPS still applies crowding, valuation, and export-risk controls, but the compounder thesis remains fully intact.
2.AVGO — Broadcom
Positive Alpha Candidate- Category
- Strong Compounder / AI Infrastructure
- Structural
- 86 / 100
- Tactical
- 65%
- Key Theme
- Custom AI silicon and networking
Broadcom's AI custom silicon and networking businesses continue to support the compounder thesis. Q2 FY2026 AI semiconductor revenue was $10.8B, up 143% YoY, driven by custom AI accelerators and AI networking.
IPS view: AVGO remains one of the best blends of AI infrastructure exposure and durable software cash flow.
3.GOOG — Alphabet
Positive Alpha Candidate- Category
- Elite Compounder / AI and Cloud Platform
- Structural
- 87 / 100
- Tactical
- 63%
- Key Theme
- Search cash flow plus AI cloud acceleration
Alphabet stays in the top three because it combines Search cash flow with accelerating AI and cloud exposure. Q1 2026 Google Cloud revenue rose 63% to $20.0B, led by GCP, enterprise AI, and AI infrastructure.
IPS view: GOOG offers a strong balance of structural quality and AI optionality with less valuation stretch than the most crowded hardware names.
4.MSFT — Microsoft
Positive Alpha Candidate- Category
- Elite Compounder / AI and Cloud Platform
- Structural
- 88 / 100
- Tactical
- 62%
- Key Theme
- Azure, Microsoft Cloud, and enterprise AI
Fiscal Q3 2026 revenue was $82.9B (+18%), Microsoft Cloud revenue $54.5B (+29%), and Azure and other cloud services grew 40%, reflecting strong AI and non-AI cloud demand.
IPS view: MSFT remains a high-confidence compounder with strong AI platform leverage.
5.META — Meta Platforms
Positive Alpha Candidate- Category
- Strong Compounder / AI Advertising Platform
- Structural
- 82 / 100
- Tactical
- 60%
- Key Theme
- AI-powered advertising and engagement
Q1 2026 revenue grew 33% to $56.3B, while operating margin remained 41%. The business is strong, but AI capex intensity caps the rank.
IPS view: META keeps capital-spending and AI ROI risks active; still a Positive Alpha Candidate.
6.AMZN — Amazon
Neutral / Quality Watchlist- Category
- Strong Compounder / Cloud + Retail
- Structural
- 80 / 100
- Tactical
- 59%
- Key Theme
- AWS, advertising, and retail efficiency
Amazon remains a Quality Watchlist name. High-quality business, but tactical probability is capped by capex intensity and cloud competition.
IPS view: Structural assets remain powerful; tactical setup is weaker than the strongest AI infrastructure names.
7.AAPL — Apple
Neutral / Quality Watchlist- Category
- Elite Compounder / Quality Compounder
- Structural
- 86 / 100
- Tactical
- 58%
- Key Theme
- Ecosystem durability and Services growth
Structural quality remains high, but AI exposure is less direct and tactical probability sits below the strongest AI infrastructure names.
IPS view: AAPL remains a Quality Watchlist compounder, outside The Blend.
8.ORCL — Oracle
Neutral / Quality Watchlist- Category
- Strong Compounder / AI Cloud Capacity
- Structural
- 80 / 100
- Tactical
- 58%
- Key Theme
- OCI backlog and AI infrastructure contracts
AI cloud backlog remains attractive, but debt/capex intensity and weaker recent relative strength keep the score capped, and ORCL now falls behind AAPL in the Elite Compounder stack.
IPS view: Outside The Blend this quarter; remains an Elite Compounder Quality Watchlist name.
9.ANET — Arista Networks
Neutral / Quality Watchlist- Category
- Strong Compounder / AI Networking
- Structural
- 79 / 100
- Tactical
- 58%
- Key Theme
- Data-center Ethernet and cloud networking
ANET continues to benefit from AI networking demand and data-center growth, but hyperscaler concentration and valuation cap the tactical score.
IPS view: Held below the highest-ranked names on valuation and concentration risk.
10.COST — Costco
Neutral / Quality Watchlist- Category
- Elite Compounder / Defensive Compounder
- Structural
- 89 / 100
- Tactical
- 58%
- Key Theme
- Membership model and traffic durability
Excellent business quality, but valuation and weaker regime alignment limit the 12-month SPY-relative setup.
IPS view: Remains an Elite Compounder Quality Watchlist name, outside The Blend.
Elite Compounder summary
| Rank | Ticker | IPS Category | Structural | Tactical | Model View |
|---|---|---|---|---|---|
| 1 | NVDA | Elite Compounder / AI Infrastructure Leader | 92 | 67% | Positive Alpha Candidate |
| 2 | AVGO | Strong Compounder / AI Infrastructure | 86 | 65% | Positive Alpha Candidate |
| 3 | GOOG | Elite Compounder / AI and Cloud Platform | 87 | 63% | Positive Alpha Candidate |
| 4 | MSFT | Elite Compounder / AI and Cloud Platform | 88 | 62% | Positive Alpha Candidate |
| 5 | META | Strong Compounder / AI Advertising Platform | 82 | 60% | Positive Alpha Candidate |
| 6 | AMZN | Strong Compounder / Cloud + Retail | 80 | 59% | Neutral / Quality Watchlist |
| 7 | AAPL | Elite Compounder / Quality Compounder | 86 | 58% | Neutral / Quality Watchlist |
| 8 | ORCL | Strong Compounder / AI Cloud Capacity | 80 | 58% | Neutral / Quality Watchlist |
| 9 | ANET | Strong Compounder / AI Networking | 79 | 58% | Neutral / Quality Watchlist |
| 10 | COST | Elite Compounder / Defensive Compounder | 89 | 58% | Neutral / Quality Watchlist |
Regime Alpha Stream
Q3 2026 Regime Alpha
Regime Alpha focuses on tactical market regimes where multiple securities are confirming the same cycle or theme. The list remains centered on AI bottlenecks: memory, storage, servers, cooling, power, and networking. The key v6.1.3 change is that the model trims tactical probabilities for some names after recent volatility — the regime is intact, but the model is no longer treating every AI-infrastructure pullback as automatically constructive. MU remains the top Regime Alpha name; Micron signed 16 strategic customer agreements with $22B in commitments across data-center, consumer, and automotive markets, including take-or-pay terms, cash deposits, and pricing floors. DELL moves ahead of STX and WDC on confirmed AI server demand and backlog visibility. STX and WDC remain Positive Alpha Regime Trades but at slightly lower scores after recent RS volatility and rising regime-exhaustion risk. AMD is held at 60% with valuation and NVIDIA competition as active caps. VRT, CRDO, and ALAB represent the physical and connectivity layers of AI infrastructure — cooling, power, optical interconnect, retimers, and rack-scale connectivity. CEG remains on the list but lower; the AI power / nuclear-scarcity thesis is valid but tactical confirmation remains weaker than memory, storage, servers, and networking.
1.MU — Micron Technology
Positive Alpha Regime Trade- Category
- AI Memory / HBM
- Structural
- 61 / 100
- Tactical
- 65%
- Key Theme
- AI memory bottleneck and HBM demand
Micron remains the top Regime Alpha name. Setup is supported by tight supply, AI memory demand, and $22B of strategic customer commitments across 16 agreements — including take-or-pay terms, cash deposits, and pricing floors spanning data-center, consumer, and automotive markets.
IPS view: MU stays #1 in Regime Alpha in Q3.
2.DELL — Dell Technologies
Positive Alpha Regime Trade- Category
- AI Servers / Data Center Infrastructure
- Structural
- 65 / 100
- Tactical
- 63%
- Key Theme
- AI server demand and infrastructure buildout
DELL moves ahead of STX and WDC in v6.1.3. The AI server theme remains confirmed and Dell's server demand and backlog visibility are strong enough to keep it near the top of Regime Alpha. Treated as a regime trade rather than a compounder because AI servers can be margin-sensitive and working-capital intensive.
IPS view: Moves up on confirmed server-cycle demand.
3.STX — Seagate Technology
Positive Alpha Regime Trade- Category
- AI Storage / Data Growth
- Structural
- 59 / 100
- Tactical
- 62%
- Key Theme
- AI data growth and high-capacity storage
Storage remains part of the confirmed AI data-growth basket, but v6.1.3 trims the tactical score slightly after recent RS volatility and rising regime-exhaustion risk.
IPS view: Still a Positive Alpha Regime Trade, but at a lower tactical probability than the prior run.
4.WDC — Western Digital
Positive Alpha Regime Trade- Category
- AI Storage / NAND/HDD Cycle
- Structural
- 59 / 100
- Tactical
- 62%
- Key Theme
- AI-driven storage demand
WDC benefits from the same basket confirmation as MU and STX. Storage cycle intact, but the model adds more caution after recent volatility.
IPS view: Regime call intact, tactical score slightly lower.
5.AMD — Advanced Micro Devices
Positive Alpha Regime Trade- Category
- AI Accelerator / CPU
- Structural
- 76 / 100
- Tactical
- 60%
- Key Theme
- AI accelerators and EPYC server CPUs
AMD benefits from AI accelerator and data-center CPU exposure. Model keeps valuation and NVIDIA competition as active caps.
IPS view: Held at 60% tactical probability.
6.VRT — Vertiv
Positive Alpha Regime Trade- Category
- AI Data-Center Power / Cooling
- Structural
- 70 / 100
- Tactical
- 60%
- Key Theme
- Data-center thermal and power infrastructure
Represents the physical layer of AI infrastructure — cooling and power. Model still treats it as a more volatile regime name rather than a durable compounder.
IPS view: Included in The Blend as a regime trade.
7.CRDO — Credo Technology
Positive Alpha Regime Trade- Category
- AI Networking / Optical Connectivity
- Structural
- 56 / 100
- Tactical
- 60%
- Key Theme
- High-speed AI data-center connectivity
AI clusters continue to require high-speed, low-power connectivity. CRDO stays a high-upside regime candidate, not a low-risk compounder. Single-Stock Theme Watch and volatility keep it just below The Blend cutoff.
IPS view: Positive Regime Trade, outside The Blend.
8.ALAB — Astera Labs
Regime Watchlist- Category
- AI Connectivity / PCIe Retimers
- Structural
- 57 / 100
- Tactical
- 59%
- Key Theme
- Rack-scale AI infrastructure connectivity
Purpose-built connectivity for AI infrastructure with strong growth, but short public history and valuation sensitivity keep the tactical score capped.
IPS view: Regime Watchlist, outside The Blend.
9.AVGO — Broadcom
Hybrid Regime + Compounder- Category
- AI Networking / Custom Silicon
- Structural
- 86 / 100
- Tactical
- 59%
- Key Theme
- Custom AI silicon and AI networking
AVGO appears in both streams this quarter because its AI networking and custom silicon franchise participates directly in the confirmed AI infrastructure regime while also qualifying as an Elite Compounder.
IPS view: Hybrid classification highlights dual exposure.
10.CEG — Constellation Energy
Regime Watchlist / Single-Stock Theme Watch- Category
- AI Power / Nuclear Scarcity
- Structural
- 73 / 100
- Tactical
- 56%
- Key Theme
- Data-center electricity demand and nuclear scarcity
The AI power and nuclear scarcity thesis remains valid, but tactical confirmation is still weaker than memory, storage, servers, and networking.
IPS view: Retained on the list but lower this quarter.
Regime Alpha summary
| Rank | Ticker | IPS Category | Structural | Tactical | Model View |
|---|---|---|---|---|---|
| 1 | MU | AI Memory / HBM | 61 | 65% | Positive Alpha Regime Trade |
| 2 | DELL | AI Servers / Data Center Infrastructure | 65 | 63% | Positive Alpha Regime Trade |
| 3 | STX | AI Storage / Data Growth | 59 | 62% | Positive Alpha Regime Trade |
| 4 | WDC | AI Storage / NAND/HDD Cycle | 59 | 62% | Positive Alpha Regime Trade |
| 5 | AMD | AI Accelerator / CPU | 76 | 60% | Positive Alpha Regime Trade |
| 6 | VRT | AI Data-Center Power / Cooling | 70 | 60% | Positive Alpha Regime Trade |
| 7 | CRDO | AI Networking / Optical Connectivity | 56 | 60% | Positive Alpha Regime Trade |
| 8 | ALAB | AI Connectivity / PCIe Retimers | 57 | 59% | Regime Watchlist |
| 9 | AVGO | AI Networking / Custom Silicon | 86 | 59% | Hybrid Regime + Compounder |
| 10 | CEG | AI Power / Nuclear Scarcity | 73 | 56% | Regime Watchlist / Single-Stock Theme Watch |
The Blend Stream
Q3 2026 The Blend
The Blend combines both streams into a single consolidated leaderboard while still preserving each stock's identity as either a compounder, a regime trade, or a hybrid. It is the best summary of the current IPS view — high-quality compounders such as NVDA, AVGO, GOOG, and MSFT alongside confirmed regime names such as MU, DELL, STX, WDC, AMD, and VRT. Compared with the prior July run, GOOG and MSFT move slightly higher while STX and WDC move slightly lower. That does not mean the storage regime has broken; v6.1.3 is giving more credit to stable compounder quality when regime names show short-term volatility. This is the intended purpose of The Blend — it prevents the list from becoming either too conservative or too speculative, keeping the strongest AI compounders while still giving meaningful representation to confirmed regime trades.
1.NVDA — NVIDIA
Positive Alpha Candidate- Category
- Compounder + Regime
- Structural
- 92 / 100
- Tactical
- 67%
- Key Theme
- AI accelerators and data-center compute
Top compounder with direct exposure to the confirmed AI compute regime.
IPS view: Highest-conviction blended name.
2.MU — Micron Technology
Positive Alpha Regime Trade- Category
- Regime Alpha
- Structural
- 61 / 100
- Tactical
- 65%
- Key Theme
- AI memory bottleneck and HBM demand
Confirmed regime leader with tight supply and $22B in strategic customer commitments.
IPS view: Top regime trade included in The Blend.
3.AVGO — Broadcom
Positive Alpha Candidate- Category
- Compounder + Regime
- Structural
- 86 / 100
- Tactical
- 65%
- Key Theme
- Custom AI silicon and networking
Elite compounder that also participates in the confirmed AI networking regime.
IPS view: Hybrid classification, high blended score.
4.GOOG — Alphabet
Positive Alpha Candidate- Category
- Compounder
- Structural
- 87 / 100
- Tactical
- 63%
- Key Theme
- Search cash flow plus AI cloud acceleration
Stable compounder quality gets more weight in v6.1.3 after regime-name volatility.
IPS view: Moves higher in The Blend this quarter.
5.DELL — Dell Technologies
Positive Alpha Regime Trade- Category
- Regime Alpha
- Structural
- 65 / 100
- Tactical
- 63%
- Key Theme
- AI servers and data-center infrastructure
AI server demand and backlog visibility continue to support the data-center infrastructure cycle.
IPS view: Regime trade included in The Blend.
6.MSFT — Microsoft
Positive Alpha Candidate- Category
- Compounder
- Structural
- 88 / 100
- Tactical
- 62%
- Key Theme
- Azure, Microsoft Cloud, and enterprise AI
Defensive AI/cloud compounder quality improves the blended ranking.
IPS view: Moves higher in The Blend this quarter.
7.STX — Seagate Technology
Positive Alpha Regime Trade- Category
- Regime Alpha
- Structural
- 59 / 100
- Tactical
- 62%
- Key Theme
- AI data growth and high-capacity storage
Storage thesis intact, but recent volatility activates Regime Exhaustion / RS Volatility discipline.
IPS view: Moves lower in The Blend on tactical caution.
8.WDC — Western Digital
Positive Alpha Regime Trade- Category
- Regime Alpha
- Structural
- 59 / 100
- Tactical
- 62%
- Key Theme
- AI-driven storage demand
Same as STX — strong basket signal, but more tactical volatility.
IPS view: Moves lower in The Blend on tactical caution.
9.AMD — Advanced Micro Devices
Positive Alpha Regime Trade- Category
- Regime Alpha
- Structural
- 76 / 100
- Tactical
- 60%
- Key Theme
- AI accelerators and EPYC server CPUs
Improved data-center and accelerator participation, competitive caps retained.
IPS view: Included in The Blend on regime confirmation.
10.VRT — Vertiv
Positive Alpha Regime Trade- Category
- Regime Alpha
- Structural
- 70 / 100
- Tactical
- 60%
- Key Theme
- Data-center power and cooling
AI data-center power and cooling bottleneck exposure with enough regime confirmation to enter The Blend.
IPS view: Included in The Blend as a regime trade.
The Blend summary
| Rank | Ticker | IPS Category | Structural | Tactical | Model View |
|---|---|---|---|---|---|
| 1 | NVDA | Compounder + Regime | 92 | 67% | Positive Alpha Candidate |
| 2 | MU | Regime Alpha | 61 | 65% | Positive Alpha Regime Trade |
| 3 | AVGO | Compounder + Regime | 86 | 65% | Positive Alpha Candidate |
| 4 | GOOG | Compounder | 87 | 63% | Positive Alpha Candidate |
| 5 | DELL | Regime Alpha | 65 | 63% | Positive Alpha Regime Trade |
| 6 | MSFT | Compounder | 88 | 62% | Positive Alpha Candidate |
| 7 | STX | Regime Alpha | 59 | 62% | Positive Alpha Regime Trade |
| 8 | WDC | Regime Alpha | 59 | 62% | Positive Alpha Regime Trade |
| 9 | AMD | Regime Alpha | 76 | 60% | Positive Alpha Regime Trade |
| 10 | VRT | Regime Alpha | 70 | 60% | Positive Alpha Regime Trade |
New Inclusions, Exclusions, and Rank Changes
Important rank changes: DELL moves up in Regime Alpha and The Blend — AI server demand and backlog visibility remain strong, and server infrastructure is still a confirmed regime. GOOG moves higher in The Blend as stable compounder quality gets more weight after regime-name volatility. MSFT moves higher in The Blend on defensive AI/cloud compounder quality. STX moves lower in The Blend — storage thesis intact, but recent volatility activates Regime Exhaustion / RS Volatility discipline. WDC moves lower in The Blend for the same reason as STX: strong basket signal, but more tactical volatility. ORCL falls behind AAPL in Elite Compounders — AI cloud backlog remains attractive, but debt/capex and weaker recent RS keep the score capped.
Exclusions from The Blend: META (still Elite Compounder, outside The Blend) — strong business, but capex intensity and lower direct bottleneck exposure keep it below the blended top ten. AMZN (Quality Watchlist, outside The Blend) — AWS and retail remain attractive, but tactical score is capped by capex and competitive pressure. AAPL (Elite Quality Watchlist, outside The Blend) — high structural score, but less direct AI infrastructure exposure. ANET (Quality Watchlist, outside The Blend) — strong AI networking quality, but valuation and hyperscaler concentration cap the setup. COST (Elite Quality Watchlist, outside The Blend) — exceptional business, but valuation and weak regime alignment limit tactical probability. ALAB (Regime Watchlist, outside The Blend) — strong AI connectivity theme, but short public history and valuation sensitivity keep it below the blended cutoff. CRDO (Positive Regime Trade, outside The Blend) — high-upside AI connectivity exposure, but Single-Stock Theme Watch and volatility keep it just below The Blend. CEG (Regime Watchlist, outside The Blend) — AI power theme remains valid, but tactical confirmation is weaker than memory/storage/server names.
Q3 2026 IPS Investment View
The Q3 update remains constructive, but more selective. IPS still favors the AI infrastructure complex — AI compute, AI memory, AI servers, AI storage, AI networking, and AI data-center infrastructure. The important v6.1.3 adjustment is risk discipline: the model continues to reward confirmed regime baskets, but it now gives more weight to RS volatility, Regime Exhaustion Risk, and Single-Stock Theme Watch when fast-moving names begin to show instability.
The practical takeaway: The Blend remains the primary action list. It balances the durability of Elite Compounders with the upside potential of Regime Alpha names, while reducing overexposure to any single crowded AI sub-theme.
Model disclaimer
This content is based on an IPS Point-in-Time Indicative model update for Q3 2026. IPS estimates the probability of 12-month SPY-relative outperformance using structural quality, tactical alpha factors, regime fit, and diagnostic risk controls. Regime Alpha names may be more volatile and more cyclical than Elite Compounder names. This is not a price-target model, investment advice, or a guarantee of future performance.