Exploring Opportunities in the Earnings Season

This earnings season, don’t fixate on stocks already at all-time highs—look for those with untapped expectation gaps.  

 

From the recent performance of major tech earnings like ASML, Netflix, TSMC, Tesla, and Google, the results have been disappointing.  

 

These highly watched, heavily bought AI stocks—whether their earnings are good or bad—have all seen poor post-earnings moves, without exception.  

 

The reason, I think, is that with the Nasdaq at all-time highs, the fundamentals of top-tier, high-consensus tech stocks have already been overly priced in.  

 

Especially for stocks at historical highs with sky-high expectations, like NVDA and PLTR—stars of AI hardware and software—avoid them.  

 

Based on the last two weeks of big tech performance, I doubt NVDA and PLTR, with their high attention, high consensus, heavy buying, and all-time high prices, will see big gains post-earnings. The odds are low unless they massively exceed expectations.    

 

Similarly, for this week’s Microsoft, Meta, and Amazon—high-consensus, all-time-high big tech—don’t hold your breath for post-earnings surges; it’s time to call it a night.  

 

As for Apple, with its weak stock performance, low consensus, and low expectations, there might be a trading opportunity. But it feels like a half-hearted chance, given Apple’s current AI progress—it’s just a trading play at best.  

 

So, where might the expectation gaps lie? Where are the meaty opportunities?  

 

They’re in stocks that haven’t hit all-time highs, have lower consensus, yet boast strong growth and AI-driven potential.  

 

Take AEHR, for instance: two weeks ago, it dipped post-earnings but later surged after announcing a major cloud provider order (likely AWS).  

 

Or GEV, a power sector leader, which last Wednesday blew past earnings expectations with a 16% EPS beat, raised full-year guidance, and saw a massive spike in gas turbine order backlogs—clearly a high-growth sector, with its stock soaring.  

 

Why do highly watched AI hardware and software stars underperform post-earnings, while GEV keeps hitting new highs?  

 

One reason might be that, as the upstream power chain for data centers, its price-in level is still insufficient.  

 

Since AI’s endgame is power, and quality power sector stocks aren’t yet priced like top AI hardware or software firms, it’s worth tracing the vine for expectation gaps.  

 

Note, I’m not suggesting you chase GEV’s rally—look at other quality stocks in the same sector still consolidating, like CEG.  

 

CEG, with its earnings due August 7, has days to go. Research its potential to beat expectations this season—how likely is it?  

 

In short, we should now focus on digging into stocks with expectation gaps—that’s our priority.$NVDA $PLTR $AAPL $GEV