Earnings are the heartbeat of the market - and every week brings a fresh set of opportunities and risks. With each report, we get new information about corporate health, investor sentiment, and the sectors driving leadership (or lagging).
In the Weekly Beat, we spotlight the most important earnings reactions from the prior week - the winners, the losers, and the surprises that moved markets. Then we shift our focus forward, breaking down the biggest setups and expectations for the week ahead.
Whether it’s mega-cap leaders, niche growth stories, or the sectors most tied to the economy, we’ve got you covered on what traders need to know right now.
After reporting a double beat, Autodesk $ADSK rallied over 9% its best earnings reaction in thirteen quarters. Free cash flow for the quarter was $451M, up an astounding 122% year-over-year.
The $82B computer hardware giant, Dell Technologies $DELL,beat headline expectations but fell nearly 9%. This was the fourth consecutive negative earnings reaction, one of the longest beatdown streaks in the S&P 500.
There weren't any S&P 500 earnings reactions to cover, so we highlighted the Gaming & eSports ETF $ESPO. This fund continues to print fresh all-time highs, driven by off-the-charts fundamental growth in its largest holding.
The largest weight in ESPO is Roblox $RBLX, which is flirting with the resolution of a massive accumulation pattern. Supporting the technicals are new highs across the board in their key performance indicators.
There weren't any S&P 500 earnings reactions to cover, but North of the border, Canada's energy giants are ripping.
Enbridge is a $105B Canadian pipeline operator that has quietly been transforming its business model. It's now an AI stock, and the market is rewarding it with fresh 10-year highs.
After reporting mixed results, the $10B packaged foods producer, Campbell's $CPB, rallied nearly 8% for its best earnings reaction since 2020. The market had priced in much worse results, and when the company released less bad news, the bulls took control.
The $21B discount store chain, Dollar Tree $DLTR, posted a double beat and suffered its second consecutive negative earnings reaction. This was a shockingly terrible earnings reaction from a company that reported what seemed to be good numbers.
After beating the market's expectations, the $30B cloud provider, Hewlett Packard Enterprise $HPE, rallied 1.5% for its seventh positive earnings reaction in the last ten quarters. Annualized recurring revenue (a key performance indicator for the company) is growing at an impressive 75% year-over-year as the AI-as-a-service business continues to boom.
Finally, the $233B software giant, Salesforce $CRM, beat its headline expectations and the market hated it. Despite 120% year-over-year growth in AI annual recurring revenue, the stock has been punished for three consecutive earnings reports.
What's happening next week 👇
Next week, we'll be focusing on the mega-cap tech stocks Oracle $ORCL and Adobe $ADBE. Additionally, we'll be monitoring the homebuilders, as the second-largest name in the industry, Lennar $LEN, which is scheduled to report.
Beyond those, we’ll also be watching:
The secular gas station leader, Casey's General Stores $CASY.
America's largest pure-play grocery store, Kroger $KR.
And the software infrastructure giant, Synopsys $SNPS.
In addition, we'll hear from several small-cap stocks, which appear poised to skyrocket as the Russell 2000 $IWM continues to make new highs.
It's set to be another eventful week, so there will be plenty to cover in The Daily Beat.
Now, let’s dig into the setups we'll be monitoring closest next week.
Here's the setup in ORCL ahead of Tuesday's earnings report 👇
Oracle is expected to post $15.04B in revenue and EPS of $1.48 after Tuesday's closing bell.
Heading into the report, the price is consolidating after rallying 120% in 80 trading sessions. With the bulls firmly in control of the primary trend, we want to bet on this being a "not a top" pattern.
This has been one of the biggest AI winners since the low in 2022, gaining over $500B in market capitalization.
So long as the bulls hold the line at 218, the path of least resistance is likely to remain higher for the foreseeable future.
Here are the past 3 years of earnings results & reactions for ORCL 👇
Over the past three years, Oracle has consistently missed Wall Street's top-line expectations, but shareholders have been rewarded for it.
The stock has had some of its best earnings reactions ever this cycle, rallying over 13% multiple times. This includes last quarter's post-earnings ripper, which was a textbook gap-n-go.
The bottom line is that this stock has tremendous power in the new AI Revolution, and the market loves what they're doing.
We expect another blockbuster quarter and a positive reaction next week.
Here's the setup in ADBE ahead of Thursday's earnings report 👇
Adobe is projected to report $5.92B in revenue and EPS of $5.19 after Thursday's closing bell.
Technically, the stock is carving out a textbook multi-year distribution pattern. A close below 330 would shift the path of least resistance from sideways to lower for the foreseeable future.
Many of its old-school software peers, such as Salesforce $CRM, have shown similar weakness. This supports an eventual resolution of this massive top.
Thursday's report could be the catalyst for the bears to take control of this name decisively.
Here are the past 3 years of earnings results & reactions for ADBE 👇
As you can see, seven of Adobe's last eight earnings events have been beat/beat/drops. This negative fundamental backdrop supports the negative technicals.
In its multiple decades as a publicly traded stock, the market has never punished shareholders so consistently for
Mr. Market is telling us loud and clear that this company is doing something wrong.
With the technicals confirming the negative fundamental outlook, we expect the market to punish ADBE for its earnings report after the closing bell on Thursday.
Here's the setup in LEN ahead of Thursday's earnings report 👇
Lennar is expected to report $8.97B in revenue and EPS of $2.10 after Thursday's closing bell.
Heading into the event, the price is finding resistance at a shelf of former highs.
Despite a significant rally in the S&P Homebuilders ETF $XHB, this name has continued to underperform.
Will that change after this report? Maybe, but we doubt it.
Either way, the line in the sand is clear. If LEN gaps above 144, we'll change our tone. Until then, the path of least resistance remains sideways.
Here are the past 3 years of earnings results & reactions for LEN 👇
Over the past three years, Lennar has been at the top of the leaderboard for worst post-earnings mover. The market has slammed the stock after eight consecutive earnings reports.
As you can see, over the past year, there has been a significant decrease in bottom-line growth, which supports the negative fundamental and technical outlook.
This company is doing something wrong, and the bears are capitalizing on it.
We expect another beatdown for LEN shareholders following Thursday's earnings event.
Happy Sunday
-The Beat Team
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