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Jensen Huang, the CEO of Nvidia, agrees, calling it: “foundational to scaling AI.”
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Warning: if you’re only focusing on chips and chatbot stocks, you will miss this entirely.
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4 years…But a massive chunk of that cash is headed somewhere surprising.
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Garmin Jumps on Guidance, Then Doubles Down on Buybacks and a Bigger Dividend
Reported by Thomas Hughes. Originally Published: 2/20/2026.
Key Points
- Garmin’s Q4 strength and 2026 guidance support a continued capital return story, including a higher dividend and a new buyback authorization.
- The article links Garmin to AI through its device-generated datasets, framing data as a strategic asset even if Garmin isn’t an “AI pure play.”
- Valuation is elevated, but analyst and institutional sentiment—plus technical levels—are positioned as key signals for the next move.
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Garmin Ltd. (NYSE: GRMN) is playing an important role in AI, and its capital return plan makes that clear. The company isn't necessarily driving AI breakthroughs, but it is advancing its technology with AI to deliver better service and utility to users. Garmin's devices continuously generate large amounts of high-quality data—biometrics, GPS, mapping and telemetry—and AI thrives on those data. Those data sets can be used both to train models and to run inferences with existing models, entrenching the business in the AI ecosystem.
How do capital returns reflect the company's position and AI relevance? By increasing them. The company proposed a 17% year-over-year (YOY) increase in its distribution for fiscal year 2026 (FY2026) and authorized a new $500 million share repurchase program. That repurchase authorization equals more than 1% of the pre-release market cap, helping ensure dilution-offsetting buybacks will continue in 2026. The dividend yields about 1.6% as of mid-February, is covered at less than 45% of consensus earnings, and the distribution increase is accelerating.
Garmin Performs at Peak Fitness, Guides for Winning Year in 2026
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Garmin capped a record-setting year with a strong fourth quarter, growing revenue 17% to more than $2.1 billion. The top line outperformed expectations by 550 basis points, supported by demand across segments. While Outdoors and Automotive OEM were weaker—revenue was flat or slightly down year-over-year—both posted growth in FY2025 and are expected to produce more robust results in FY2026. Other segments, including Fitness, Aviation and Marine, grew by a solid 42%, 16% and 18%, respectively, driven by new product launches and end-market demand.
Margins also impressed. Gross margin contracted by 10 basis points but was offset by 60 basis points of operational improvement. The net result: operating income grew about 19%, adjusted EPS came in at $2.79 (up 16% YOY) and was nearly 1,700 basis points ahead of MarketBeat's reported consensus. More importantly, free cash flow totaled $430 million, enabling an approximately 50% capital return payout ratio and measurable balance-sheet improvement.
As strong as Q4 was, the outlook for 2026 attracted the most attention. Garmin guided revenue and earnings to ranges well above consensus, forecasting top-line growth of nearly 10% and earnings that support its capital return plans while aiming to improve shareholder value.
Analysts and Institutions Buy Into Garmin's Value Proposition
Garmin isn't exactly a cheap stock in 2026, trading near 27x current-year forecasts and above the broad market average. However, that valuation already prices in a solid growth outlook—roughly a high-single-digit to low-double-digit EPS compound annual growth rate over the next decade. Under that scenario, Garmin would trade at about 12x its 2035 forecast, implying the potential for the stock to roughly double over that horizon.
Analysts and institutional trends suggest these groups are buying into that outlook. MarketBeat data shows a Moderate Buy rating and an upward trend in price targets. The high-end target is $310, implying roughly 20% upside from recent levels and sitting near record highs—likely a conservative estimate. Analysts' revisions are likely to push targets higher as the year progresses, and the technical setup suggests a move to $320 or above is possible.
Institutions provide an even stronger tailwind: they own more than 80% of the stock and were net buyers in Q1 2026. They have been net buyers over the past three years, supporting the long-term uptrend and increasing activity when prices dipped in 2026. The takeaway: there is solid institutional support to limit downside and a tailwind that can lift prices on rallies.
Garmin Surges on Guidance, Cash Flow, and Capital Return Outlook
Garmin's share price jumped more than 10% after its Q4 release, confirming support at key moving averages and triggering a trend-following entry signal. The move pushed the stock above those support targets and to record highs, which makes it a riskier buy at current levels. It is still likely to trend higher over time; potential entry triggers include a retest of support near $220 or a decisive break to new highs.
Waiting for Walmart to Pull Back? Now's the Time to Buy
Author: Thomas Hughes. Posted: 2/19/2026.
Key Points
- Walmart is creating a buying opportunity for investors following weaker-than-expected F2027 guidance.
- The uptrend remains intact, with analysts suggesting a 10% upside from the early 2026 highs.
- Cash flow, capital return, and institutional support underpin the price action.
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Investors waiting for Walmart (NASDAQ: WMT) shares to pull back into an attractive entry point have had their patience rewarded. The stock peaked ahead of the Q4 2026 earnings report and has since turned lower. Technical indicators show the stock remains in a longer-term uptrend but could retrace into the $120 to $110 range before finding a base and rebounding. When that pullback finishes, the upside potential—including dividends and share-price appreciation—could translate into a low-double-digit CAGR over the coming years.
Walmart's stock price action is driven by cash flow as much as by growth. Strong cash generation supports balance-sheet health along with dependable capital returns and reinvestment. The dividend yield was 0.8% as of mid-February 2026—below the market average but highly reliable, with a payout ratio near 35% of expected earnings and a 52-year history of consecutive increases. Share repurchases are also consistent, reducing the share count each quarter; the board recently authorized a new $30 billion buyback, roughly 3% of the pre-release market cap.
Analysts Caution Doesn't Mean Sell Walmart: Buying Opportunity Exposed
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Analysts offered some caution after Walmart's Q4 release, but they generally remain constructive and supportive of the stock's outlook. MarketBeat tracks 35 analyst reports (those less than 12 months old), and the trend shows expanded coverage, firmer sentiment, and a 94% buy-side bias. The consensus price target has climbed about 30% on a trailing 12-month basis and was rising into the earnings release.
Recent updates included an upgrade to Strong Buy from Argus and several price-target increases or reiterations, lifting the high end of the range to $150. A move to $150 would be notable, as it would sit roughly 10% above the stock's all-time high.
The technical setup looks constructive. Although price action peaked before the report, it remains inside a broader uptrend that appears intact.
Technical indicators align with the recent peak: MACD shows convergence with the high and registered one of its strongest peaks on record, signaling strong momentum at that top.
That combination suggests the market is strengthening and is likely to at least retest the recent high after the current pullback. In that scenario, retesting the prior high would be the minimum target; pushing to new highs is a realistic possibility.
MarketBeat data shows institutions own about 25% of Walmart shares, while the Walton family holds an estimated 50% or more. Together, those groups control close to 80% of the float.
Institutions have been net buyers. Over the trailing 12 months institutional buying exceeded selling by more than $2 for every $1 sold, and that accumulation accelerated in early Q1 2026. In January and early February the balance approached $2.50 bought for every $1 sold, coinciding with Walmart's move to record highs. That institutional demand provides a supportive base that could step in near or just below the $120 support zone.
Walmart Guidance: Caution in the Face of Bullish Trends
Walmart's guidance was conservative. The company guided Q1 and full-year 2027 revenue and earnings below consensus, while still forecasting growth, margin strength, and strong cash flow. Given the company's Q4 outperformance and strength across key consumer channels, the guidance appears intentionally cautious.
E-commerce was a standout, up 24% systemwide, driven by same-day pickup and delivery services. The ad business grew 37% globally and 41% in the United States. On the core retail side, Walmart U.S. comps rose 4.6% on stronger ticket size and traffic; Sam's Club comps grew 4%, aided by a 6.9% increase in membership fee revenue; and International comps were up 7.5%.
Margin trends were positive: gross margins expanded slightly and were supported by expense control. The company delivered 10.5% growth in currency-neutral operating income (10.8% reported), a 12.1% increase in adjusted earnings, and 18% growth in free cash flow. Looking ahead, management expects revenue growth of about 4.5%, a modest slowdown from this year. One reason to view the outlook as cautious: this year's tax refunds have been reported to be roughly 10% larger on average than last year's, which could provide additional near-term consumer support.
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