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3 Quiet AI Revenue Accelerators With Sales Growth Outpacing Peers
Written by Nathan Reiff. Date Posted: 7/7/2026.
Key Points
- Fabrinet, MACOM Technology Solutions, and Credo Technology Group are three overlooked semiconductor firms positioned to benefit from the growing AI supply chain.
- All three companies posted strong recent revenue growth, with Fabrinet, MACOM, and Credo reporting sales increases of 39%, 22.5%, and 157% year-over-year, respectively.
- Analysts remain largely bullish on all three stocks, citing attractive valuations and Buy ratings.
- Special Report: The company SpaceX cannot operate without
The AI boom is reshaping the market well beyond its most obvious beneficiaries—tech, energy, and utilities firms—and some of the best ways to benefit from it have largely gone overlooked. Even within a prominent AI industry like semiconductors, some companies have unique opportunities to serve as pick-and-shovel investments because of their role in the complex AI supply chain.
When considering possible AI revenue accelerators, it helps to look for firms that already have some sales growth momentum. Three companies—Fabrinet (NYSE: FN), MACOM Technology Solutions (NASDAQ: MTSI), and Credo Technology Group Inc. (NASDAQ: CRDO)—fit that description and boast strong analyst support, making them candidates for an increasingly prominent role in the AI industry.
Important Optical Packaging Firm With an Attractive Valuation
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Download your free copy of Your First Trade Playbook todayFabrinet is a precision optical packaging company responsible for many of the key components vital to hyperscalers and data centers, such as transceivers and silicon photonics components. That puts the company at a major bottleneck in the broader AI supply chain and positions it to play a role in a growing share of AI system deployments for the foreseeable future.
This has already been demonstrated by the company's strong sales, including record revenue of $1.2 billion in the latest quarter, a year-over-year (YOY) increase of 39%. Revenue came in ahead of expectations, and non-GAAP earnings per share (EPS) of $3.72 beat guidance as well.
Going forward, an essential step for Fabrinet will be successfully building capacity to support further scaling. From new capacity buildouts in recent quarters to investments in existing semiconductor fabrication facilities and the acquisition of new sites for development, the company has an aggressive, multi-pronged plan to generate several billion dollars in additional revenue capacity, although the exact timeline remains to be seen.
In the meantime, Fabrinet shows one of the most compelling valuations across the AI industry, with a price-to-sales (P/S) ratio of about 5. With six Buy ratings and four Holds, as well as 32% upside potential forecast, analysts are also bullish on this important but easy-to-miss AI player.
Massive Data Center Sales Growth Is Just One Part of MACOM's Appeal
MACOM is also in the semiconductor space, but it specializes in specific analog, microwave, millimeter-wave, and photonics tools and services. Data center applications are a primary driver of revenue growth—sales increased by 22.5% YOY in the latest reported quarter to solidly beat analyst predictions, while book-to-bill reached a record 1.5. Management has even gone so far as to raise its base-case growth rate for data center revenue from 35%-40% to more than 60%, a signal of impressive optimism that this will continue through at least the end of the fiscal year in September.
At least two other important factors help boost MACOM as a prospective investment. First, the firm has experienced noteworthy margin expansion in recent quarters, thanks to its excellent operational execution. With fiscal 2026 adjusted gross margin expected to be in the range of 59%-60%, this positive trajectory seems likely to continue.
Second, the company has other growth drivers outside of AI—crucially, industrial and defense sales have also climbed strongly.
It's no surprise, then, that analysts have given MTSI stock 11 Buy ratings compared to just three Holds. Although upside potential is minimal at just 10%, there is an unmistakable excitement across Wall Street surrounding MACOM's AI potential.
Major Growth in Multiple Categories, But CRDO Could Still Be Undervalued
Known for its zero-flap connectivity solutions, Credo could play a transformational role in keeping AI optical connections running smoothly and quickly. The company has been on a massive growth streak in recent months—shares are up more than 85% year to date, quarterly revenue ballooned by 157% YOY in the last quarter to a record $437 million, and non-GAAP net income of nearly $227 million was also an all-time high.
Optical revenue has been driving Credo's growth, and for the current fiscal year (ending in May 2027), sales in this area are expected to exceed $600 million.
Even so, the company's price/earnings-to-growth (PEG) ratio, a measure of relative value based on expected earnings growth, is competitive at 1.1. This may be why an impressive 17 analysts have assigned Buy ratings to CRDO stock, compared to just two Holds.
Lockheed Martin Secures the Ultimate Defense Moat
Submitted by Jeffrey Neal Johnson. First Published: 7/9/2026.
Key Points
- Lockheed Martin's record $194 billion backlog grew by $607.4 million after new Apache sustainment and GPS ground control contracts from the Army and Air Force.
- A first-quarter 2026 earnings miss and margin compression to 10.1% pushed Lockheed Martin to acquire Ultra Maritime for $3.45 billion, targeting higher-margin naval defense work.
- Recent stock weakness reflects a Russell index exclusion and routine executive stock sales rather than weaker fundamentals, with investors watching the July 23, 2026 earnings report for signs of margin recovery.
- Special Report: The company SpaceX cannot operate without
Global rearmament cycles are actively reshaping the physical economy. Investors are witnessing a rapid transition in which government defense budgets are shifting from discretionary spending debates to mandatory restocking mandates.
When sovereign nations realize their munitions and aircraft are depleted, capital flows into the defense sector with remarkable certainty. Lockheed Martin (NYSE: LMT) now operates more like a highly regulated, government-backed utility than a traditional aerospace manufacturer.
Powering Up the Ultimate Defense Utility Grid
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See the company that just rewrote the DOE's timelineThink of a public utility. Consumers pay their water bill regardless of economic conditions because the service is essential. Defense spending has entered that same paradigm. Governments are prioritizing national security above most other fiscal concerns, effectively helping to guarantee revenue for prime contractors.
Lockheed Martin sits at the center of this structural shift, turning geopolitical tension into predictable, compounding cash flow. The company recently added $607 million in localized Department of Defense contracts to an already record-breaking $194 billion revenue backlog. Despite recent index exclusions and fixed-price margin compression, a strategic $3.45 billion sub-sea acquisition and an impending second-quarter earnings rebound position Lockheed Martin for potential multiple expansion. The underlying data points to a business engineered for multi-decade revenue visibility, offering a compelling opportunity for those evaluating capital deployment in an increasingly fractured geopolitical landscape.
Building an Impenetrable Revenue Fortress
Revenue visibility is the lifeblood of institutional capital. Lockheed Martin effectively secured its near-term cash flow with a two-pronged DoD award totaling $607.4 million. The bulk of this capital is a $502.4 million Army contract focused on sustainment for the AH-64 Apache's targeting and night-vision systems. A secondary $105 million Air Force order secures upgrades to GPS ground control.
Sustainment contracts carry significant weight for fundamental investors. Selling an airframe generates revenue once. Sustaining its avionics and targeting systems can generate recurring cash flow for decades. That $194 billion backlog serves as an impenetrable moat, insulating Lockheed Martin from the typical macroeconomic demand destruction.
International developments are providing secondary tailwinds. Following the July 2026 NATO Summit in Ankara, Lockheed Martin established a PAC-3 Missile Sustainment Facility in Europe. This localized footprint, paired with fresh joint ventures to scale missile production alongside industry peers, ensures the company remains entrenched in European rearmament logistics.
The broader market heavily discounts the value of these long-tail sustainment facilities. Yet they consistently provide the baseline cash flow required to fund dividend growth and share repurchases. When evaluating Lockheed Martin's fundamental strength, investors should look beyond the initial point of sale and recognize the multi-decade service agreements that keep allied forces operational.
Ultra Maritime Drops Anchor on New Growth
A pragmatic evaluation of any equity requires acknowledging fundamental friction. The first quarter of 2026 delivered operational headwinds for Lockheed Martin. Earnings per share landed at $6.44 against a consensus estimate of $6.79, while segment operating margins compressed from 11.6% to 10.1%.
This margin decay traces directly back to unfavorable adjustments on F-16 production and cost pressures within classified aeronautics programs. Inflationary environments are notoriously hostile to fixed-price government contracts. When supply chain costs rise, the defense contractor absorbs the difference, squeezing margins before the contract can be renegotiated.
Management is actively pivoting to offset these aeronautics losses through aggressive vertical integration. The recent $3.45 billion acquisition of Ultra Maritime brings highly specialized anti-submarine warfare technologies into Lockheed Martin's Rotary and Mission Systems portfolio.
Acquiring advanced sonobuoy and acoustic countermeasure manufacturing allows Lockheed Martin to capture higher-margin naval defense market share. Global demand for anti-submarine capabilities is surging as naval theaters become more contested.
Integrating Ultra Maritime directly addresses this need, offering investors a clear pathway to margin expansion that circumvents the bottleneck of traditional aircraft assembly lines. This strategic move shifts the revenue mix slightly away from heavily scrutinized fixed-price aircraft programs and toward consumable, high-tech maritime defense systems that command stronger pricing power.
Lockheed Martin’s Low Beta and Strong Dividend Support Its Defensive Appeal
Investors analyzing recent price action might notice localized weakness that seems disconnected from the broader defense sector rally. Understanding the mechanics of institutional rebalancing helps clarify this discrepancy.
Lockheed Martin was recently dropped from the Russell 1000 Value-Defensive Index. Index exclusions trigger forced liquidations in passive funds and exchange-traded funds that track that specific benchmark. This creates a temporary supply glut of shares on the open market, depressing the price independently of Lockheed Martin's actual financial health.
Surface-level insider trading data also shows a cluster of executive selling over the past six months, particularly within the Aeronautics division. Context changes the narrative entirely. Aeronautics President Greg Ulmer retired on June 1, 2026, handing leadership to Orlando Sanchez, Jr. Executive retirements frequently trigger the liquidation of vested stock options for tax and estate planning purposes. Framing this routine action as a bearish sign of internal confidence is a misreading of standard corporate succession mechanics.
While passive funds rebalance and executives transition, the underlying equity mechanics remain highly defensive. The stock carries a heavily muted beta of 0.11. A beta this low indicates the equity moves almost completely independently of broader market volatility. When paired with a robust $13.80 annualized dividend payout, recently reinforced by a $3.45 per share second-quarter payout on June 26, Lockheed Martin presents a structural floor. Investors often use this low-beta, high-yield combination as a portfolio hedge to help mitigate downside risk during periods of macroeconomic uncertainty.
Will Q2 Earnings Turn the Fundamental Tide?
The true test of management's ability to halt margin decay arrives with the second-quarter earnings report on July 23, 2026. Analysts expect consensus earnings of $7.23 per share, requiring a sharp operational recovery from the first-quarter miss.
Hitting or exceeding this target will validate the thesis that fixed-price contract friction has peaked and that the Ultra Maritime acquisition is already providing margin relief. Conversely, another miss could signal that supply chain costs remain sticky, potentially testing the company's foundational support levels.
Investors evaluating defensive allocations might consider watching the upcoming earnings call closely to see if management can successfully translate a record-breaking $194 billion backlog into expanded operating margins and predictable cash flow. The data suggests the backlog is unshakeable, but the execution of converting that backlog into bottom-line profitability will dictate the next major move for Lockheed Martin.
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