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Tech dramas, rather than the Iran war, will be the earnings season focus

Energy earnings will offset slowdowns elsewhere. But it’s still all about Big Tech.

4/10/26 9:08AM

In an uncertain world, investors will get a welcome dose of clarity this week as the quarterly flurry of earnings reports starts in earnest.

Large financial firms line up to issue results first, with luminaries like Goldman Sachs (Monday) and JPMorgan Chase, BlackRock, Wells Fargo and Citigroup (all Tuesday) headlining the first two days of festivities.

As the largest US bank by assets — and the only non-tech company to crack the top 10 biggest S&P 500 earners — JPMorgan will get a fair bit of attention when it reports before the open on Tuesday.

Wall Street will, of course, be focused on its top and bottom lines: diluted Q1 earnings per share ($5.44) is expected to grow by about 7%, and revenue ($49.13 billion) by 8.4%, according to FactSet.

But investors will also be keen to see if the company has been able to rake in a more respectable share of the fees Wall Street has collected from blockbuster bond deals financing the AI building boom. (Last quarter, JPM’s investment banking fee revenue came in short of expectations.)

Such commercial concerns seem almost quaint compared to the last six weeks, when the Iran war whipsawed stocks and pushed the Nasdaq, Russell 2000, and Dow into corrections.

But whether the coming crop of earnings results is considered a bonanza or a bust will have less to do with the war in Iran and more to do with the updates on the ongoing AI boom, and what it means for the tech stocks that remain the overwhelming source of growth for the market.

The S&P 500 information technology sector includes familiar tech giants — foremost among them Nvidia, Microsoft, and Apple — that have dominated the market for most of the current decade. But other tech shares that are in the S&P’s communications services sector, including Meta, Amazon, and Alphabet, are also massive contributors to the market’s earnings power.

The top 10 stocks — all tech, except for Exxon — account for about 35% of the profits generated by the entire S&P 500, per FactSet. And for the most part, they won’t report results until late April, and in some cases, May. (Why, Nvidia? Why?)

These tech goliaths aren’t looking particularly expensive at the moment. Nvidia, for example, is essentially trading at 20x expected earnings over the next 12 months, near its lowest levels in the last decade. The same could be said for Microsoft.

Why? Some think low valuations reflect concerns that these former asset-light, cash-generating giants are unlikely to make a profit on the hundreds of billions of dollars — an expected $600 billion in capital expenditure this year alone — they’re pouring into AI.

Such unresolved questions will make any updates on capex plans or forecasts for free cash flow (perhaps the cleanest read on profitability that includes the impact of investment costs) of particular interest to the market.

And given their massive weight in market cap-based indexes like the S&P, these shares will be crucial determinants of how the next few weeks go. But beyond that, the big spending by hyperscalers matters massively to the rest of the market.

Goldman Sachs analysts estimate that AI investment spending will account for roughly 40% of S&P 500 earnings-per-share growth in 2026.

All of the biggest S&P 500 gainers so far this year are companies that, basically, have been selling their stuff to be used in the big AI build-out.

That includes memory plays like Sandisk, Western Digital, and Seagate Technology Holdings as well as fiber-optic networking companies like Lumentum, Ciena Corp., and Corning. Lesser-known players like Teradyne — which makes equipment to test AI hardware — and data center construction and engineering firms Vertiv Holdings and Comfort Systems USA are also toward the top of the list of index winners in 2026.

Any indication that the breakneck pace of growth for these companies — or for memory stocks like Sandisk, any signs of a slowdown in soaring prices — could generate outsized moves.

Another key drama playing out in tech is whether software companies — which were first battered by AI worries, then snapped up as a source of reliable cash flows amid the war, and since the ceasefire, dumped yet again — can convince Wall Street they’re not doomed to obsolescence in an AI future.

So far this year, it’s been an uphill battle.

Luke Kawa3h

Micron and Sandisk rally on new Street-high price targets from Susquehanna

Micron and Sandisk both hit fresh all-time highs in early trading after Susquehanna bestowed new Wall Street-high price targets on the two memory stocks.

Analyst Mehdi Hosseini upped his view on the former to $1,750 from $600, and to $3,250 from $2,000 for the latter.

“Supply is now expected to remain tight through 2027, sustaining elevated margins and thus warranting valuation re-rating,” he wrote, per Bloomberg.

It’s the fifth time in the past year that the average price target on Micron has gone up by more than 10% in a week. UBS’s Tim Arcuri more than tripled his price target on Micron earlier this week, and has already lost the title of “most bullish.”

But even as analysts are tripping over themselves to raise their price targets on these stocks, the ferocity of the rally in Micron has outpaced their best efforts.

The high-bandwidth memory specialist traded at a record premium to the consensus Wall Street price target this week, based on data going back to 2008.

Helena Cheng3h

Okta soars on Q1 earnings beat, raised outlook driven by AI security demand

Okta shares are surging in early trading Friday after the identity security provider posted Q1 fiscal 2027 financial results that exceeded Wall Street estimates. The strong results are fueled by accelerating corporate demand for cybersecurity software, as well as the deployment of autonomous AI systems.

Key numbers:

Adjusted earnings per share of $0.91 compared to analysts’ estimate of $0.85.
Revenue of $765 million compared to an estimate of $752.7 million.

The company generated subscription revenue of $750 million, up 11% year over year. Okta also has $271 million in free cash flow, up from $238 million in the prior year’s quarter.

While standard cybersecurity software protects human workers, the latest catalyst sparking Okta’s strong corporate performance is the rapid emergence of autonomous AI agents that can access sensitive corporate databases and interact with privileged executive accounts.

“AI agents are rapidly becoming a new workforce inside every organization, creating a wave of identities that must be secured and governed alongside human users,” said Todd McKinnon, CEO and cofounder of Okta. “We’re expanding our opportunity as the world’s leading independent and neutral identity provider and helping customers make identity the unified control plane for their secure agentic enterprise.”

Okta raised its fiscal 2027 revenue guidance to between $3.185 billion and $3.205 billion, roughly in line with estimates of $3.18 billion. The company formally dropped its long-term projected non-GAAP tax rate from 26% down to 21%. This adjustment is a direct byproduct of the federal corporate tax frameworks under the One Big Beautiful Bill Act.

Shares of Okta have risen around 9% since the beginning of this year.

Helena Cheng5h

HPE, SMCI surge after Dell’s Q1 beat on strong AI server demand

HP Enterprise and Super Micro Computer shares are surging in premarket trading, getting a big boost from rival Dell’s strong Q1 results.

Dell’s $16.1 billion in AI-optimized server sales for the quarter alone proved that enterprise data center demand is accelerating faster than Wall Street had anticipated. The company posted revenue of $43.8 billion, exceeding Street estimates of $35.5 billion. Management now sees full-year sales of about $167 billion, well above the $142 billion expected by analysts.

The read-through is particularly relevant for Super Micro, one of the largest suppliers of Nvidia-powered AI server systems, and HPE, which has been expanding its AI infrastructure and liquid-cooling offerings through its partnership with Nvidia.

The moves suggest investors view AI infrastructure as a broad spending cycle that benefits server makers across the entire ecosystem.

Claire Yubin Oh6h

AST SpaceMobile plummets after Blue Origin rocket explosion

Shares of AST SpaceMobile plunged as much as 15% before the bell on Friday after a Blue Origin rocket exploded yesterday evening on the launchpad.

The New Glenn rocket blew up in what the Jeff Bezos-backed company described on X as “an anomaly” during a hotfire test at the launchpad, only days before it’s due to launch satellites for Amazon’s Project Kuiper next week. Bezos added via X that “it’s too early to know the root cause but we’re already working to find it.” Videos of the explosion circulating on social media show an enormous fireball.

Blue Origins' New Glenn rocket just exploded on the pad.
byu/Ph6222 inaviation

Though AST SpaceMobile’s satellites are not directly affected by the latest explosion, the company partnered with Blue Origin in November 2024 to use its New Glenn rocket to deliver AST’s next-generation Block 2 Bluebird satellites to low-Earth orbit. Citing multiple unidentified employees, the Financial Times reported that an initial assessment of the site showed severe damage to Blue Origin’s equipment, including its only launchpad.

The explosion is a stumbling block for AST’s goals to place at least 45 satellites in orbit by the end of the year. The journey to reach that goal already hit a pretty major speed bump in April, after Blue Origin reported that its New Glenn vehicle put AST SpaceMobile’s BlueBird 7 satellite at an altitude too low to maintain operations.

Paige Oamek & Luke Kawa20h

MongoDB sees knee-jerk drubbing then massive gains after impressive Q1 results, boost to full-year guidance

At first, it looked like another case of a software company selling off despite reporting strong results, with traders (or algorithms) sending MongoDB 21% lower in postmarket trading. That drubbing came even as the distributed database platform company beat Wall Street estimates on the top and bottom lines and lifted its full-year fiscal 2027 guidance.

What a difference seven minutes make. Those losses vanished, and then the stock proceeded to trade more than 20% higher.

Here are the Q1 numbers:

Revenue of $687.6 million (compared to analyst estimates of $664.5 million).
Adjusted earnings per share of $1.32 (estimate: $1.19).

Management hiked its full-year adjusted EPS guidance to a range of $5.95 to $6.14, up from a previous view of $5.75 to $5.93 and north of the $5.88 that analysts are anticipating. The annual sales outlook was also lifted to a range of $2.92 billion to $2.96 billion, up $600 million from its prior guidance and above the $2.9 billion consensus estimate.

The Q2 outlook provided by the company also bettered what the Street had penciled in for the top and bottom lines.

So for those keeping score at home, that’s a $5.6 billion drop in market cap as a knee-jerk reaction, followed by a $12.6 billion surge in value off the lows. Price discovery; it’s truly a beautiful thing.

Shares are still down year to date even after today’s volatility, but hey, the way things have been going, just give it a few minutes.