Reward 1000 Tiger-coinsThe 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?
Comments
My pick is $Microsoft(MSFT)$ and $NVIDIA Corp(NVDA)$ — both at the core of the AI ecosystem with clearer profit paths. In contrast, firms where AI remains a cost center could face margin pressure if ROI lags. I’ll also keep an eye on guidance revisions, as they’ll reveal whether optimism around AI spending is starting to cool.
With the VIX $Cboe Volatility Index(VIX)$ above 23, I’m leaning toward selling volatility via iron condors or strangles on stable names like $Apple(AAPL)$ or $Procter & Gamble(PG)$ . I expect Q3 earnings growth to exceed 13% again, but the real story is how firms guide future AI returns.
@Tiger_comments @TigerStars
Earnings season is important because public companies must disclose their financial health, revenues, expenses, profits and strategic direction. It is like a report card and it keeps management honest and accountable to their shareholders.
Share prices can swing dramatically based on earnings results. A beat or a miss can reshape investor sentiment, trigger sector rotations and even shift macro narratives.
This earnings season is even more important as the US government shutdown continues into its 3rd week and the geopolitical tensions between the US and China continue.
I will be focusing on the Magnificent 7 especially $NVIDIA(NVDA)$ and $Alphabet(GOOG)$ as I have a vested interest in them.
@Tiger_comments @TigerStars @TigerClub @CaptainTiger
Check them in the history - “community distribution“
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
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@Huat99
@Snowwhite
I’d prioritise semiconductors, hyperscale cloud, and industrial automation — sectors where AI capex translates directly into earnings growth. Nvidia, AMD, and TSMC remain central, but watch for second-wave beneficiaries like Broadcom, Super Micro, and ASML.
In tech, I expect AI-related spending to stay robust, even as overall earnings growth moderates to mid-single digits. Firms that turn AI infrastructure into profitable services, Microsoft, Amazon, and Oracle, should outperform.
Elsewhere, I’d stay cautious on consumer cyclicals and rate-sensitive sectors until guidance confirms margin recovery.
My approach: sell volatility pre-earnings, take profits swiftly post-results, and keep tight stops. In this environment, discipline is alpha, not aggression.