1. Amazon Takes on Nvidia
Nvidia (NVDA -0.03%) chips cost a fortune, and moving to anyone else’s means rewriting code that took months to get right. Amazon (AMZN +0.13%) is now challenging Nvidia’s core defense with TorchNeuron, a new software tool it will release under an open-source license today. Amazon stock closed almost 5% higher on Monday at $262.45.
- TorchNeuron acts like a universal AI translator: It lets code written in PyTorch, the toolkit behind most artificial intelligence (AI) apps, run on Amazon Web Services’ (AWS) Trainium chips with just one setting. Amazon says 85% of AI developers already write in PyTorch, so the pool of potential switchers is huge. While Amazon still plans to deploy two million additional Nvidia GPUs in 2027 and 2028, it wants better bargaining power in every chip deal.
- AWS is growing at a torrid pace: Amazon needs a mountain of data-center equipment for AWS, so it signed a new deal with 3M (MMM +5.75%) on Monday. It includes warrants for up to 3.16 million shares tied to $6 billion in optical hardware purchases. Morgan Stanley (MS +1.04%) projects 47% AWS growth in 2027 at a 42% operating margin, and gave Amazon a fresh price target of $350.
The long-term case for Amazon hinges on one question: does AWS earn more on every dollar it spends? All three Monday updates point to yes. Trainium lowers chip costs, TorchNeuron speeds adoption, and the 3M warrants capture AI infrastructure upside.
2. Karooooo’s Smart Move: Stock Up Before Prices Rise
Karooooo’s (KARO -0.64%) Cartrack unit installs tracking devices in vehicles and sells fleet-management software. It is sitting on a pile of tracking devices now, and reported strong subscriber constant-currency revenue growth. Yet, Shares fell more than 8% ahead of the opening bell after quarterly results showed earnings below analyst expectations. Management also left the full-year guidance unchanged. Team Hidden Gems has a 5-year price prediction of $128.44.
- Memory prices are tying up cash: Karooooo stocked up on tracking devices as a buffer against rising memory prices. Its device inventory jumped 92% from February. The trade-off? Free cash flow (FCF) slumped to 100 million South African Rand from 358 million Rand a year ago in the six months through August. Management says device levels now fit its growth plans, so FCF should recover in the second half. We’ll watch.
- Subscribers are arriving faster: Cartrack set a Q2 record with 94,516 net subscriber additions (new sign-ups minus cancellations), up from 70,740 a year earlier. Fool contributing analyst Anders Bylund believes “the growth story will kick into a whole new gear over the next couple of years. So far, most of its revenues have been collected in South Africa. Now, the company is building infrastructure to support expansion in Southeast Asia and Europe. And it doesn't take much of an investment to launch services in a new market.”
3. SpaceX, Netflix, ISRG Earnings: What to Watch
As earnings season gets into full swing, three notable companies report after Tuesday’s closing bell.
- Space Exploration Technologies (SPCX +0.01%) reports third-quarter results, its second as a public company. CFO Bret Johnsen said SpaceX would reach $100 billion in annual recurring revenue (yearly revenue from repeat customers) by year-end. That number could go higher after the recent compute deals. Last quarter, its AI unit lost $1.26 billion as spending jumped to $15.8 billion from $7.7 billion. We’d watch whether AI revenue grows faster than that bill.
- Netflix (NFLX -0.82%) is targeting around $3 billion in ad revenue this year, roughly double last year’s. It’s the first full quarter with the latest price increases, so advertising has to keep pace as subscription growth slows. View hours grew just 2% in the first half, so any growth there would help. Netflix is recommended by both Team Rule Breakers and Team Hidden Gems.
- Intuitive Surgical (ISRG +1.24%), maker of the da Vinci surgical robot, has beaten earnings estimates four quarters running. The soft spot is the U.S., where da Vinci procedure growth slowed to 12% in the second quarter, versus 20% internationally. Instrument sales follow procedure counts, so U.S. growth matters. Team Rule Breakers recommends the stock.
4. Latin America’s Shopping Cart
Team Hidden Gems sees MercadoLibre (MELI +1.62%) reaching $4,467.12 within five years, about 2.4 times today’s price of roughly $1,860. Team Rule Breakers sees even more upside with a five-year prediction of $4,782.
The two teams have recommended Latin America’s e-commerce and payments leader more than 50 times since 2009, and both teams agree that MercadoLibre’s recent margin squeeze reflects smart spending on future growth.
- Spending to win: MercadoLibre grew revenue about 50% to $10.2 billion in Q2 2026, and shoppers bought 795 million items on its platform, up about 45%. Earnings per share fell about 11% in the quarter because management spent heavily on free shipping and marketing. We see those costs as a down payment on market share in a region where online shopping makes up only a mid-teens percentage of retail sales.
- Honor roll: MercadoLibre earns a Hidden Gems Superscore of 89 and a Rule Breakers Superscore of 85, high marks from both teams’ Moneyball systems. Team Hidden Gems scores the company’s use of AI at 96, and Team Rule Breakers rates its innovation an 89. Much of that innovation lives in Mercado Pago, MercadoLibre’s digital wallet, which brings banking tools to Latin Americans faster than physical banks can open branches.
Shares trade about 23% below their 52-week high, and both teams plan to hold MercadoLibre while its bets on shipping and payments compound across Latin America.
5. Today’s Question!
When a past multibagger goes quiet, do you see it as an opportunity or a sign the story’s over? How do you decide?
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