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Q1 Earnings: Great (but with a caveat)… Technology is doing the heavy lifting… Luke Lango’s “AI Summer”… One Louis Navellier Stock to Boost Your Summer… Nervous about buying tech today? Don’t be
As I write on Wednesday morning, markets are in bullish mode thanks to positive geopolitical and earnings news.
Firstly, Axios The United States and Iran are closing in on a one-page memorandum of understanding to end the war and establish a framework for nuclear negotiations, overnight reports said.
Naturally, President Trump is keeping everyone guessing. He described the deal as “perhaps a big assumption” and warned that “if they don’t agree, the bombing will begin.”
However, this remains progress, although it may be fragile.
In response, oil fell sharply, with Brent falling from $114 to $101 per barrel, and WTI falling from $102 to $95.
This is still high, but encouraging, nonetheless. Reopening the Strait of Hormuz would be a massive relief of pressure on the economy.
At the same time, in terms of profits, Advanced Micro Devices Company (AMD) He is the main winner of the day.
AMD beat both the bottom line and top line yesterday evening, posting revenue of $7.44 billion — up 36% year over year — driven by a 57% increase in its data center segment.
It’s further evidence that the AI infrastructure is largely sound.
Which brings us to the broader earnings picture this season…
Great…but with a caveat
That’s the simplest way to sum up the first quarter earnings season so far.
At a high level, the numbers were impressive. To clarify, here FactSetan earnings data analytics suite used by professionals:
For the first quarter of 2026, the blended earnings growth rate (year-over-year) for the S&P 500 was 27.1%.
If 27.1% is the actual growth rate for the quarter, it would represent the highest earnings growth rate the index has reported since Q4 2021 (32.0%).
Remember, the reference point for Q4 2021 was the period of high economic activity in the post-coronavirus reopening phase. So, the fact that we are on the same general playing field is noteworthy.
Additionally, the numbers were much better than forecast just weeks ago.
Back to FactSet:
As of March 31, the estimated earnings growth rate (year-over-year) for the S&P 500 for the first quarter of 2026 was 13.1%.
Ten sectors reported higher earnings today (compared to March 31) due to positive EPS surprises and upward revisions to EPS estimates.
These profits also came during a period of economic pressure that essentially represented a headwind to growth.
In this regard, here is our technology expert, Luke Lango, from him Innovation investor Daily notes:
(Growth is reported this earnings season) In the midst of an active war in the Middle East. While the price of oil was at $90-120. While the consumer was withdrawing his savings to cover grocery bills. While the Fed was paralyzed between inflation and recession.
So, that’s the “cool” part.
What about this warning?
Well, this is a classic case where the mean hides a skewed distribution. When we look under the hood, we see a huge gap in performance.
Technology is the name of the game
The Great Seven and their peers continue to bear the heavy burden of this earnings growth.
To illustrate, without the huge contribution of the technology sector, the S&P 500’s earnings growth in the first quarter would fall from double digits to nearly 5%.
To be clear, I’m not saying the non-tech sector is having a bad quarter. In fact, there are only two sectors currently posting year-over-year earnings declines (Healthcare and Energy). What I’m saying is that while non-tech growth is “good”, technology growth is “exceptional”.
For example, positive surprises from Alphabet Company (Google), Meta Platforms Inc. (dead) and Amazon.com Inc. (Amzn) Last week accounted for a staggering 71% of the total dollar-level net increase in earnings for the entire S&P 500 during that week.
As Luke has been saying for months at this point, there’s the technology…and then everything else.
How does this translate to stock prices and your portfolio?
Let’s take this to the portfolio level.
To get a sense of what’s really happening in this market, let’s take a look Standard & Poor’s 500 (SPX)the S&P 500 Equal Weight Index ($SPXEW)and SPDR Technology Sector ETF (XLK).
The S&P 500 is our baseline… The equal weight index gives us a better idea of the performance of the average S&P company – not necessarily “technology” – because it allocates equal weight to each company… and the XLK is our proxy for pure technology.
Below, we’ll take a look at the respective performance since the market low in late March.
While the equal-weighted S&P 500 index posted a strong rebound – up 9% – the S&P 500, weighted by big technology companies, almost doubled that return at about 16%.
But this is nothing compared to XLK – pure technology – which achieved significant growth of 32%.
We have a market in which a group of technology companies are achieving “exceptional” growth fueled by the generational shift in AI, while the rest of the market is achieving positive, but “normal” growth.
Here’s Luke’s summary:
Profits are rising now. By the handful.
But they are rising the fastest in the world of artificial intelligence. Which means that although the stock market will likely continue to rise, AI stocks will continue to lead the pack.
Welcome to the summer of artificial intelligence.
One of the stocks to consider this AI summer
I can’t write a digest Transform the power of profits without turning to legendary investor Louis Navellier, editor Growth investor.
Earnings are not just a metric that Lewis tracks, they are the foundation upon which his four-decade career has been built.
The logic behind his quantitative algorithms is straightforward: when a company consistently beats earnings expectations, institutional money follows. When big money moves, stock prices follow.
Now, Louis and him Growth investor Subscribers have had an exceptional earnings season — for example, last week, 16 of the 20 companies in his portfolio that reported earnings beat estimates, with an average earnings surprise of 29%.
One of the recent achievers is GE Vernova (Jeff) — and he happens to be one of the AI-adjacent names that Locke is teasing right now because of AI Summer.
You see, GE Vernova provides the energy infrastructure — the turbines, network technology, and power systems — that keeps data centers connected and active. As the demand for AI grows, so does the demand for what GEV produces.
Here’s Lewis explaining how this demand will impact GEV’s profits:
First-quarter earnings rose 1,700% year over year to $4.75 billion, or $17.44 per share.
Adjusted earnings were $1.98 per share, beating estimates of $1.67 per share by 18.6%.
This is no light blow. These are the kind of numbers that quickly gain institutional attention.
Growth investor Subscribers who followed Lewis at GEV last August saw gains of 77% as I wrote. But if you’re not into GEV, you’re not too late.
The current buy price for Louis is $1,288, about 2% above GEV’s trading price as I write on Wednesday. So, if you’re looking for a stock to ride this AI summer, there’s still room to enter.
One more thing from Lewis before we move on…
Yesterday, this came across my desk from him, regarding this earnings season:
With earnings looking stronger than expected, it’s easy to follow the temptation to sit back and watch profits roll in.
I think this is wrong. Because you always have to be on the lookout for what’s next.
Right now, companies are spending billions to build AI – data centers, energy infrastructure, computing systems, and more.
But according to my research, the next phase of the AI boom is happening in a little-known lab in Tennessee.
Hardly anyone talks about it. But President Trump compared the size and scope of this project to the Manhattan Project.
It’s an interesting story, but I don’t want to go down that rabbit hole digest. However, you can get The full scoop from Lewis in his interview here.
Looking back, are you nervous about owning technology/AI after the historic rally since late March?
It’s a fair question.
As we just saw, XLK exploded 32% from its late March lows in a matter of weeks. This kind of move makes even seasoned investors feel like they’ve missed out on easy money — or worse, that they’re holding the bag at the top.
But before you think about your own AI situations, consider this…
AI and technology have something that most markets do not: extraordinary earnings visibility backed by multi-year public capital commitments.
Just last week, the hyperscalers reported earnings and, almost for a company, accelerated their AI infrastructure spending guidance.
The collective annual capital expenditures of these four companies are now expected to approach $700 billion in 2026.
At the same time, many have explicitly indicated that capital expenditures will continue to increase through 2027. CNBC Reports how much money was spent on building the built-in AI Microsoft (MSFT)It is expected to cross Alphabet, Amazon and Meta 1 trillion dollars A milestone in 2027.
It is expected that this spending will flow directly into the profits of companies supplying the construction…
Chip designers, power providers, data center operators, and software platforms.
Most importantly, it doesn’t depend on whether a jaded consumer decides to spend at Starbucks or buy a new car. Hyperscalers have made a public commitment to their shareholders.
This is a more isolated growth driver than most of the market can currently claim — an isolation that does not extend beyond the AI ecosystem.
not-AI shares You are not necessarily heading towards an accident. But they don’t have the same structural view of earnings. They are exposed to consumer demand, interest rates and slowing global demand. The risks are more traditional, and the upside is more limited.
Which brings us back to where we started today…
“Great…but with a warning.”
The “wonderful” is real: Earnings growth of 27.1%, which beat expectations, was achieved in the midst of a war, a paralyzed Fed, and a stressed consumer. This is not hype. This is real power.
But the warning is just as real…
If we exclude technology and AI, we are looking at growth of approximately 5%. Good – but not the things that will speed up your retirement.
So, the rules of play are pretty straightforward. Survive technology and AI with confidence – whether you do it alone, or with… Help Louisor Luke’s guidance – The data, profits, and $1 trillion in CapEx committed to Hyperscaler all back this up. As for the rest of the market, be more selective and careful.
As always, know what you own and why and when you will sell it. But with these guarantees in place, enjoy this “AI Summer.”
I wish you a good evening,
Jeff Remsburg
(Disclaimer: I own AMD, GOOGL, MSFT, and AMZN.)
