These are HSBC's favorite stocks this earnings season

HSBC highlighted 11 stocks positioned to rally during earnings season, with Alphabet, Amazon, and Monster Beverage among its top picks. Alphabet and Amazon both have buy ratings and earnings dates on April 29, while Monster Beverage reports May 14; HSBC sees AI demand, cloud growth, and continued energy drink category expansion as key catalysts. The broader backdrop is mixed, with first-quarter EPS expected to rise 12.3% year over year but geopolitical risk from the Iran war adding volatility.

Analysis

The setup is less about “beating earnings” and more about which firms can convert AI capex into visible monetization fast enough to justify multiple expansion. Alphabet and Amazon are the cleanest beneficiaries of the current market regime because they sit on both sides of the AI trade: they are spending heavily into the buildout, but they also monetize the infrastructure through ads, cloud, and developer workflows. That matters because the market is increasingly rewarding companies that can show revenue lift within one or two quarters of higher spend, not just promise long-duration optionality.

The second-order effect is competitive pressure inside cloud and digital advertising. If Alphabet and Amazon demonstrate accelerating demand, smaller cloud and ad-tech peers face a tougher fundraising and valuation backdrop as customers consolidate around platforms with proprietary silicon, model access, and distribution. That can widen the gap between the hyperscalers and everyone else, while also pressuring enterprise AI vendors that rely on third-party infrastructure pricing staying benign.

Monster is a different but interesting duration trade: the stock is not being priced like a secular compounder, yet its balance sheet and buyback capacity give it a cleaner downside profile than many consumer names in a volatile macro tape. The underappreciated angle is that category growth can remain resilient even if broader consumer spending cools, because energy drinks trade more like a habitual purchase than a discretionary refreshment. In a risk-off shock, that makes MNST a relative shelter rather than a growth acceleration story.

The main reversal risk is timing. If the market concludes that AI monetization is lagging capex, both GOOGL and AMZN could give back post-earnings gains quickly, especially after recent highs and crowded long positioning. Geopolitical easing is also a hidden headwind for the earnings-season rally narrative: if oil retraces and volatility compresses, the market may rotate away from the perceived quality-duration winners and back into cyclical laggards.

Key Decisions for Investors

• Go long GOOGL into the print with a 2-4 week horizon; best risk/reward is if management confirms capex-to-revenue linkage, with upside from multiple re-rating rather than just EPS beat. Use a tight post-earnings stop if cloud growth decelerates.
• Go long AMZN vs. short a basket of smaller cloud/software names over 1-2 months; the pair benefits if enterprise buyers continue consolidating around the largest infrastructure platforms and penalizes vendors without proprietary distribution or silicon.
• Buy MNST on pullbacks for a 3-6 month hold; downside should be cushioned by buybacks and balance-sheet flexibility, while upside comes from category resilience rather than macro beta. Favor call spreads over common if implied vol rises into earnings.
• For event-driven exposure, consider GOOGL/AMZN call spreads into earnings rather than outright longs; this captures the upside from a positive AI narrative while limiting the drawdown if the market deems capex commentary too aggressive.
• Fade any broad post-earnings rally in lower-quality AI enablers if GOOGL and AMZN confirm strong demand; that would be a signal to short the second-tier infrastructure names that trade on narrative rather than cash conversion.