Dell Technologies just delivered a quarter that should reframe how long-term investors think about the AI infrastructure buildout. In Q1 FY27, Dell reported record revenue of $43.8 billion — an 88% jump year-over-year — while AI-optimized server revenue surged 757% to $16.1 billion. Profit beat expectations by the widest margin in at least five years.

The numbers behind the numbers are even more striking. Dell booked $24.4 billion in new AI orders during the quarter and ended with a record $51.3 billion AI backlog — meaning the demand pipeline is not just large, it is growing. The Infrastructure Solutions Group, which covers servers and data center equipment, posted $29 billion in revenue, up 181%. This is not a blip. This is a structural shift in how enterprises are spending capital.

What makes Dell interesting for patient investors is the business model. Unlike pure-play AI chipmakers trading at lofty multiples, Dell is a diversified hardware and services company that happens to be sitting in the exact middle of where enterprise AI spending is flowing. It builds the racks, ships the servers, and manages the integration — with recurring relationships across Fortune 500 customers that are deepening, not shrinking.

The record cash generation from this quarter also translated into continued shareholder returns, reinforcing the company’s capital discipline. Dell is not just riding the AI wave — it is compounding its position inside it. For investors looking for AI exposure without paying strictly software valuations, Dell’s combination of earnings momentum, backlog depth, and dividend history is worth a serious look.

While investors obsess over AI chip stocks and semiconductor cycles, one of the most reliable compounding machines in retail quietly posted another standout quarter. Costco Wholesale reported Q3 fiscal 2026 results on May 28, and buried beneath the headline numbers is a story that long-term investors should find genuinely compelling: the membership model is getting stronger, not weaker, even as macroeconomic pressures squeeze consumers everywhere else.

Net sales rose 11.6% year-over-year to $69.15 billion, and net income climbed 15% to $2.19 billion — or $4.93 per diluted share. But the detail that stands out is gas. Costco reported record-breaking gas volumes in the quarter, with members filling up more frequently as the Iran conflict pushed fuel prices higher. The CFO noted that members were topping off vehicles more frequently because of concern about future gas prices. That behavioral shift — using Costco as a hedge against price spikes — is exactly the kind of sticky, habitual behavior that cements long-term member loyalty. Gas is a loss-leader, but it is also a magnet that drives warehouse visits and incremental spend.

The membership metrics themselves tell a deeper story. Paid memberships grew 4.1% to 82.9 million, with paid executive memberships — the higher-tier, higher-fee option — surging 9.6% to 41.2 million. The worldwide renewal rate held at 89.7%, and in the U.S. and Canada it was an extraordinary 92.2%. Membership fee income rose 10.7% to $1.373 billion. That figure is not just revenue — it is a near-pure-profit annuity stream that funds Costco’s ability to undercut competitors on price and keep members locked in. The September 2024 fee increase alone accounted for more than a quarter of that membership income growth, with minimal churn to show for it.

What makes this quarter worth studying is not the magnitude of the beat but the durability of the underlying model. In an environment where discount retailers are warning of shifting consumer sentiment, Costco’s comparable sales grew 9.8% — or 6.6% stripping out gasoline inflation and foreign exchange. The warehouse model, which requires members to pay for the privilege of shopping, creates a psychological contract that most retailers can only dream about. Members feel compelled to shop enough to justify the fee.

For patient investors, the question is never whether Costco is a great business — it demonstrably is. The question is valuation, and Costco has always carried a premium that tests conviction. But each quarter that demonstrates widening membership renewal rates, accelerating executive tier upgrades, and behavioral stickiness even in inflationary environments is a quarter that reinforces the thesis. Durable businesses with pricing power and habitual customer relationships tend to look expensive right up until they dont.

There is a peculiar problem happening on Wall Street right now: Marvell Technology has been raising its own revenue guidance three times in under six months, its stock has more than doubled year-to-date in 2026, and the average analyst price target still sits roughly 24% below where shares are currently trading. When a company outruns its own coverage, something interesting is happening beneath the surface.

Marvell (NASDAQ: MRVL) is not a household name, but it quietly occupies one of the most strategic positions in the AI infrastructure buildout. The company designs custom silicon chips called XPUs for major hyperscalers, along with the high-speed optical interconnects and networking hardware that allow massive data centers to move data without bottlenecks. Put simply: every AI cluster that gets built needs Marvell’s plumbing. That positioning is showing up in the numbers. Data center revenue hit $6 billion in fiscal 2026, up 46% year-over-year, and now accounts for 74% of total company revenue. Fiscal 2027 data center revenue is expected to grow another 40% — a guidance figure that itself was revised upward from 30% just three months earlier.

The catalyst that crystallized the bull case arrived in late March, when Nvidia announced a $2 billion investment in Marvell and integrated the company into its NVLink Fusion ecosystem — a rack-scale platform that allows hyperscalers to build semi-custom AI infrastructure fully compatible with Nvidia’s software stack. When the dominant force in AI chips decides to back a supplier with a multibillion-dollar check, it is worth paying attention. Stifel analysts subsequently raised their price target to $210 (a Street high), Citi lifted to $215, and Bank of America moved to $200. Yet consensus targets as a group have not fully caught up to where the stock is trading — a sign that models and earnings estimates are still being revised in real time.

For long-term investors, the Marvell thesis rests on three compounding engines. First, the interconnect business — where Marvell leads in the chip architecture powering 800-gigabit and 1.6-terabit optical transceivers — is expected to grow more than 50% this fiscal year, with all five major U.S. hyperscalers set to receive Marvell modules. Second, the custom silicon business is expected to at least double in fiscal 2028, led by a second major hyperscaler program ramping into high-volume production. Third, the recent Celestial AI acquisition added co-packaged optics capabilities with a clear milestone: $500 million annualized revenue by late 2027, doubling again by 2028.

The honest valuation debate is real: Marvell trades at roughly 44x NTM EV/EBITDA, well above Broadcom at 25x and Nvidia at 17x. That premium demands flawless execution across every product line. If any one thread slips, the stock faces multiple compression. But the bear case ignores something important — CEO Matt Murphy has raised full-year guidance three consecutive times in under six months, each time citing accelerating bookings, not aspirational projections. Management guided fiscal 2028 total revenue toward $15 billion and non-GAAP EPS of well over $5, explicitly noting the outlook is based on demand seen now and designs already in execution. Patient investors know the difference between a company pricing in hope and one pricing in backlog.

Q1 fiscal 2027 earnings arrive today after the close. The street expects $2.4 billion in revenue and EPS around $0.74 to $0.84. Marvell has beaten estimates in each of the last four quarters. Whether the stock reacts favorably or not in the short term, the underlying story — a fabless chip company that has secured a structural position in AI infrastructure while compounding its revenue guidance upward — is exactly the kind of business that long-term investors tend to look back on and wish they had understood earlier.

For years, the AI investment narrative centered on one thing: GPUs. Nvidia became the poster child of the boom, and for good reason — training large language models is enormously GPU-intensive. But a shift is quietly underway, and Arm Holdings is at the center of it.

Bernstein this week published a market note arguing that Arm stands at the beginning of a CPU renaissance driven by agentic AI. The distinction matters. Chatbots run inference in bursts. AI agents — the kind that take multi-step actions, browse the web, write code, and orchestrate other tools — run continuously. That changes the compute profile entirely. Continuous, low-latency workloads favor power-efficient architectures, and Arm’s CPU designs are unrivaled there.

Bernstein projects that Arm could capture a fourfold increase in server CPU market share over the next four years, growing its addressable market to $137 billion. The firm also sees a path to five times current profitability by 2030. That’s not a moonshot number — it’s a compound growth thesis built on the structural shift from chatbot to agent.

The latest earnings give that thesis real footing. In Q4 FY2026, Arm reported a 49% jump in net income to $313 million, with revenue rising 20% to $1.49 billion. For Q1 FY2027, guidance calls for $1.26 billion in revenue — another ~20% year-over-year gain. This isn’t a company waiting for the future to arrive.

What makes Arm particularly interesting for long-term investors is its business model. Arm doesn’t manufacture chips — it licenses its chip architecture to semiconductor companies and device makers worldwide. Apple, Qualcomm, Amazon, and virtually every major chip designer uses Arm’s IP. Every time one of those companies ships a chip, Arm collects royalties. As AI agents proliferate across smartphones, data centers, and edge devices, the royalty stream compounds quietly in the background.

The stock has surged 46% in a week on the back of the Bernstein note and earnings — which means the near-term trade is probably not the point. The more interesting question for patient investors is whether the 5x profit thesis plays out over the next four years. If AI agents become as ubiquitous as smartphones — and there are real reasons to think they will — Arm’s royalty model could be one of the most durable compounding machines in tech.

Not every AI winner has “AI” in its name. Sometimes it’s the company collecting tolls on the road everyone else is building.

When markets get chaotic, most investors lose sleep. CME Group makes money.

The world’s largest derivatives exchange operator just posted record revenue of $1.9 billion in Q1 2026 — up 14% from the prior year — while the rest of Wall Street was navigating tariff uncertainty, Middle East tensions, and a rattled bond market. Average daily trading volume hit an all-time high of 36.2 million contracts, a 22% surge from Q1 2025. Net income jumped 21% to $1.15 billion, with an operating margin of 69.7%. Not many businesses in America generate seven-in-ten revenue dollars as operating profit.

The reason is structural. CME operates the exchanges where the world hedges its risks — futures and options on interest rates, equity indexes, currencies, commodities, and energy. Every time a pension fund wants to lock in a rate, a multinational wants to hedge its currency exposure, or an oil company wants to price its production forward, they pay CME a toll. The company doesn’t pick winners or losers in the underlying markets. It collects fees whether prices go up or down. And when volatility spikes — which it has been doing reliably in 2026 — volumes rise and so does revenue.

CEO Terry Duffy has called this environment “the need for risk management at unprecedented scale,” and the numbers back him up. Clearing and transaction fees climbed 15% to $1.54 billion. Market data revenue hit a record $224 million. These aren’t one-time tailwinds — they reflect a world that is structurally more uncertain than it was a decade ago. Geopolitical fragmentation, persistent inflation, and AI-driven volatility aren’t going away. If anything, they compound over time, which means the demand for hedging instruments — and the fees CME collects on them — has a structural tailwind beneath it.

For long-term investors, CME has the kind of moat that doesn’t erode easily. Exchange networks become more valuable as more participants join. Liquidity begets liquidity. Switching costs are enormous — a trader or institution that has built its hedging workflow around CME’s contracts doesn’t just wake up one morning and migrate to a competitor. The stock has gained nearly 10% over the past 52 weeks even as much of the market has been choppy, and shares closed at $305 on May 18.

The patient investor takeaway: businesses that profit from volatility rather than suffer from it are rare. CME is one of the cleanest examples in public markets — a toll road on global financial risk, with a 69% operating margin and a customer base that grows every time the world gets more complicated.