Good morning, investors. So far, 135 S&P 500 companies have reported earnings this quarter.
Here are the six stocks I'm watching this earnings season and why.
Let's dive in ↓
Rare Prices
27% of the S&P 500 has reported earnings.
And the results have been impressive.
So far, among the 135 S&P 500 companies that have reported:
86% beat EPS estimates
80% beat revenue estimates
So far so good.
But the market is still overlooking a handful of exceptional businesses.
Here are six companies I’m watching this season and why.
Uber $UBER
Long-term story: Uber becomes the operating system connecting transportation, delivery, and autonomous mobility.
Long-term risk: Autonomous vehicle operators build direct customer relationships, reducing Uber's role.
Netflix $NFLX
Long-term story: Netflix becomes the world's leading global entertainment platform across subscriptions and advertising.
Long-term risk: Content costs rise faster than revenue growth.
Constellation Software $CSU.TSX
Long-term story: Constellation compounds capital by continuously acquiring high-quality vertical software businesses.
Long-term risk: Attractive acquisition opportunities become increasingly scarce.
PepsiCo $PEP
Long-term story: PepsiCo steadily grows through its portfolio of global food and beverage brands.
Long-term risk: Health-conscious consumers reduce demand for its core products.
Meta Platforms $META
Long-term story: Meta monetizes the world's largest digital attention and AI ecosystem.
Long-term risk: Regulation and platform disruption weaken its competitive advantage.
Copart $CPRT
Long-term story: Copart becomes the global infrastructure for vehicle salvage and remarketing.
Long-term risk: Competition weakens its network effects and pricing power.
I’ll keep you updated.
But for now, 63% of S&P 500 companies still have to report.
Earnings season is just getting started.
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Portfolio Update
The S&P 500 is on pace for its 10th straight quarter of earnings growth, with 86% of companies beating EPS estimates. Yet many stocks are still selling off. As I’ve said before, high expectations = high volatility.
I haven't bought any new stocks this year, but I've added Netflix and Uber to my watchlist. Cash remains at 23%.
Elsewhere
🚨 Intel posts blockbuster earnings, but Jim Cramer's tweet steals the spotlight. Jim Cramer posted "Intel's the one" shortly after the results, as traders joked about the infamous "Cramer Curse." I wouldn't read too much into the meme, but the timing was hard to ignore. (CNBC)
☁️ Alphabet beats earnings, but shares fall on higher AI spending. Google Cloud came in stronger than expected, while investors focused on Alphabet's higher 2026 capital spending plans. Cloud carried this quarter. Without it, I think the market reaction would've been much worse. (CNBC)
🚗 Tesla misses earnings as free cash flow turns negative and margins shrink. The company reported weaker profitability despite beating revenue expectations. The auto business is brutal, which is why I have never invested in it. (CNBC)
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