This earnings season will focus on forward guidance around AI-driven growth, capital investment in hardware, and the impact on earnings, margins, and associated risks
NVIDIA (NVDA) remains a standout due to its leadership in AI chips and data center computing, with robust revenue growth expected。。。
AI-related capital expenditure is accelerating, supporting earnings growth despite economic and regulatory challenges
Market reactions will hinge on AI outlooks and related investment plans, with backlog visibility and product launches acting as key signals amid volatility
Tag :@Huat99 @Snowwhite
Most Volatile Earnings Season Coming! What to Focus?
@Tiger_comments：The market expects Q3 earnings growth of 8%, marking the 9th straight quarter of YOY gains. But here’s the twist — historically, S&P 500 companies almost always beat estimates. 💡 In 37 of the past 40 quarters, actual earnings topped forecasts. 🔺 On average, actual EPS beats estimates by 7–8%. 📊 If that trend holds, Q3 earnings growth could easily exceed 13%, making it the 4th consecutive quarter of double-digit profit growth. Actual earnings growth rate has exceeded the estimated earnings growth rate at the end of the quarter in 37 of the past 40 quarters for the S&P 500. The only exceptions were Q1 2020, Q3 2022, and Q4 2022. Earnings season: Justify the truth for AI capital spending In the upcoming earnings season, capital expenditures — especially those tied to artificial intelligence — will come under intense scrutiny. The key question: Can this massive spending be monetized? Data shows that U.S. mega-cap companies are projected to spend $1.1 trillion on AI between 2026 and 2029, while total AI-related investment across all sectors is expected to exceed $1.6 trillion. This spending far surpasses the $309 billion in combined capital expenditures over the past 12 months by Mag 7 tech giants (excluding Tesla), most of which has already been poured into AI infrastructure. For many companies, AI remains a cost center rather than a revenue driver. While this may not yet pose a major headwind, it could become one in the future. The market now stands at a crucial crossroads: on one side lies the boundless potential of AI-driven transformation; on the other, the profit and valuation pressure from massive capital outlays. Options Strategy for This Earnings Season With the VIX now above 23, volatility is pricey — and that flips the script. Last quarter, traders bought straddles when IV was cheap. This time, it’s all about selling volatility. 1️⃣ Sell Straddles / Strangles When options imply bigger moves than earnings usually deliver — it’s time to collect premium. Ideal targets: Stocks with historically small earnings-day moves — think AAPL, MSFT, PG, KO, INTC. IV collapses, theta pays. 2️⃣ Iron Condors for Safety Want to sell vol but limit risk? Use an iron condor — sell the near strikes, buy wings for protection. You still profit from the IV crush, but your downside is capped. When volatility is cheap, you buy it. When volatility is expensive, you sell it. The key to success will be timing and selectivity: Sell volatility right before earnings Close positions immediately after results And stay disciplined on risk — because in a season this volatile, complacency costs more than fear itself. What would you focus on this earnings season? Which company would be your pick? How do you expect earnings growth & AI capex?
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