First-quarter earnings season kicks off this week, and it promises to be an interesting one, as the third month of the quarter, March, saw oil prices rise from about $72 a barrel to over $100 a barrel.
Most companies can be negatively affected by a spike in energy prices, either directly because energy is a significant input to their operations, or indirectly because higher energy prices can reduce consumer spending elsewhere in the economy. So, it wouldn't be surprising to see some growing pessimism about first-quarter earnings.
Yet, CEOs of large companies seem relatively optimistic about their companies' financial performance. That's according to FactSet, which tracks S&P earnings reports. Overall, 110 of the 500 large U.S.-listed firms in the S&P 500 index have issued quarterly EPS guidance for the first quarter (that guidance is a sort of pre-earnings announcement issued in advance of a company's actual earnings report).
Of those 110 companies, 59 (about 54%) issued positive EPS guidance, meaning they expect to report earnings that beat the consensus Wall Street estimate. That percentage is well above the five-year average of 42% issuing positive guidance and the 10-year average of 40%.
Let's dive in deeper to see what investment ideas might stand out.
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Guidance from tech companies was most optimistic
At the sector level, information technology companies see the most optimism in terms of positive earnings guidance. And at the industry level, the semiconductors and semiconductor equipment industry (within the information technology sector) has the highest number of companies issuing positive EPS guidance, according to FactSet.
That group includes the big chipmakers like Nvidia, Intel, Broadcom, and Micron Technology, as well as companies like Applied Materials, Lam Research, and KLA, which supply complex fabrication and test equipment to semiconductor and related industries around the world.
The entire industry group is up about 7% so far in 2026 (for comparison, the S&P 500 index is about flat for the year). Over the past 52 weeks, the group is up 84%, a much larger gain than the 25% the S&P 500 index produced over that time period.
Yet, if the group outperforms Wall Street earnings estimates, as many of its companies predict, I expect these stocks to rise even higher. Here are a few earnings announcements to watch in April and May include (some of these are estimated dates). How these companies performed in the most recent quarter may set the tone for the entire market.
- Lam Research – Wednesday, April 22
- Intel – Thursday, April 23
- KLA – Wednesday, April 29
- Applied Materials – Monday, May 4
- Nvidia – Wednesday, May 20
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Key Data Points
For investors interested in semiconductor and semiconductor equipment stocks, consider the State Street SPDR S&P Semiconductor ETF (XSD +3.62%), which is up about 18% this year and more than 110% over the past 52 weeks. I think it's a wise investment.
