☕️ Monster earnings on deck, what does an investor do
Jul 27, 2026Howdy! 👋
I hope you’ve had a great weekend and are ready to get after it.
I am.
There are some monster earnings on deck.
The media and more than a few folks are going to use this as an excuse to focus on the negative, but I encourage you to stay on track with what we do best around here… the positive.
Why?
Because investing in optimism beats cowering in fear over time, every time.
Here’s my playbook.
1 – What hyperscaler and Capex haters are missing
I sat down with the fabulous Stuart Varney ahead of the opening bell and he asked me specifically about AI vis-à-vie the “big tech four” set to report this week – Microsoft, Meta, Apple and Amazon. (Watch)
There is no doubt in my mind.
I believe AI will go down as the single largest investing theme in recorded human history.
Here’s what the herd is missing.
Everybody hating on hyperscalers and Capex creates one of the most telegraphed signals for long-term investors ever. By late next year, this will slow down giving revenue a chance to accelerate.
How can I be so certain?
Simple.
Every business on the planet will adapt, adopt or die.
The profit potential is incredibly concentrated as the “value” shifts from models to infrastructure. The spending is so high because the companies doing it are building tomorrow’s economic backbone, not simply defending their tech, their margins or their cash flow.
The Mag7 account for nearly 70% of the S&P500s profits… which means that the concentration is a source of opportunity for every industry on the planet.
And smart investors.
Keith’s Investing Tip: This is very simple. Wall Street is still dominated by two tribes... the spreadsheet gang and the valuation crew so they recoil when they can’t check boxes. They fixate on the next quarter because their analysis treats spending like a dirty word. It’s ALWAYS the start of unprecedented profit potential because durable revenues (they can’t model now) enter the picture. Invest accordingly or you will get left behind over time.
2 – Big earnings week on deck, think like a shark not a minnow
Roughly a third of the S&P 500 report this week. Four of the Mag 7 – Microsoft, Meta, Apple, Amazon – all in one 48-hour period.
The game is afoot so expect higher volatility and be ready. In fact, I expect the go-fast traders to execute not one but potentially several “rug pulls” to scare the weak hands out.
Think like a shark, not a minnow.
There are a number of great, high probability strategies that could work nicely.
Just a few that come to mind… LowBall Orders, Selling Cash Secured Puts, the FreeTrade, Selling Covered Calls, Rebalancing Risk.
The best names have the highest liquidity and – I submit – are where you want to be hunting. Dodgy stocks are, well, dodgy for a reason.
If you’re an OBAer, keep an eye on your email for specific updates on companies I’m watching very carefully and what to look for in this week’s earnings.
If you’re not and you’d appreciate some insight, I’ll be here if that’s of interest.
3 – Ford’s latest plans: Be the “Nike” of pickup trucks
Ford just unveiled a $57,350 Bronco with a "Desert Rising" package — 1,000 units, sold like a “sneaker” drop. (Read)
Sigh.
This is yet another in a supposed series of brilliant moves trumpeted by the beleaguered car maker intended to reinvest and reinvigorate the brand.
To me it’s yet another package of pasta thrown at the wall to see what sticks.
- Remember the eyes-off driving reveal? (Read)
- The battery storage pivot announced days after cutting 1,600 battery jobs? (Read)
- Or how about calling the F-150 Lightning a "Model T moment for the 21st century" — then quietly killing it inside a $19.5 billion EV write-down? (Read)
Last year Farley said AI would wipe out half of white-collar jobs. This year Ford had to rehire hundreds of veteran engineers because the AI system it leaned on couldn't do the work.
It makes me wonder just what the heck Farley and his crew think they do every day.
I think the answer is they don’t know.
Putskies, short or avoid, imho.
4 – Why the concentration gang is misguided (again)
It’s fashionable to grouse about concentration, valuation and a dozen other things in the high pinky club right now.
Yet, over the past two centuries…
U.S. equity markets have repeatedly cycled between periods of broad participation and periods of narrow leadership, where a few companies tied to major economic or technological shifts dominated — banks in early American markets, then railroads, then phones, then computers, then the Internet and so on.
Even the Dot-com bubble (top 5 stocks ~18% of the S&P 500 in March 2000) and the Nifty Fifty era of the early 1970s (~25% peak) look downright modest next to today's levels.
That's precisely the point.
Concentration spikes have accompanied essentially every major technology deployment cycle in recorded market history. Profit potential follows.
Keith’s Investing Tip: The markets reward those who invest early and who stay the course. Concentration is the historic norm, not the exception. Buy the best, ignore the rest.®
5 – China’s AI just saved Hugging Face’s asteroids
Aye, caramba or 我的天啊 (wǒ de tiān a) if you prefer. 🤦♂️
Here’s the story nobody in Washington wants to talk about outside polite conversation. (Read)
A rogue OpenAI model launched a cyberattack on a company called Hugging Face last week.
Hugging Face – went to defend itself – and America’s best frontier models wouldn’t help because the guardrails are so strict they couldn’t tell the attacker from the defender.
So Hugging Face grabbed a self-hosted, open-weight Chinese model instead and used that to successfully defend itself.
Think about that for a moment.
A US company had to use Chinese open-source AI models to protect against a rogue ChatGPT attack because US versions wouldn’t because they couldn’t.
Not surprisingly, Nvidia, Microsoft, SpaceX, and Palantir have just launched the Open Secure AI Alliance — open, self-hostable AI tools, because closed systems just proved they can leave you defenceless when it matters most.
Great right?
Here’s the rub.
Washington's threatening sanctions on Chinese AI over "distillation" but China doesn’t give a rip because the most capable open-weight models right now are mostly Chinese-built.
Ban ‘em wholesale and you cut off the exact tools that just saved Hugging Face’s asteroids.
What’s next?
Executives are studying the Hugging Face situation carefully and are very close to writing blank checks to prevent that from happening to their companies.
It’ll spill into cyber defence, quantum, and yes, every one of the companies I’ve just mentioned who are part of the Open Secure AI Alliance over time.
Keith’s Investing Tip: The Dragon is coming to dinner and the only decision you need to make as an investor is whether to be at the table or on the menu.
Bottom Line
85% or more of all buy/sell decisions are wrong – meaning investors buy when they should be selling and sell when they should be buying.
Keep your emotions out of the equation.
Now and as always, let's MAKE it a great day and start the week strong! 💯
You got this — I promise!
Keith 😀
