These stocks reporting earnings next week have historically beaten expectations

Lam Research and ServiceNow are highlighted as potential earnings beats next week, with Lam historically topping EPS estimates 92% of the time and averaging a 1.3% next-day gain, while ServiceNow has beaten 91% of the time and averages a 3.1% post-results rise. Wolfe Research reiterated Lam's peer perform rating, and Citi/Oppenheimer maintained constructive views on ServiceNow despite sharp YTD share weakness. Citi's $177 target implies 84% upside from Thursday's close, while Oppenheimer's $130 target implies 35% upside.

Analysis

The setup favors names where expectations have been compressed faster than fundamentals, creating asymmetric upside if management simply avoids a guide-down. For LRCX, the key second-order effect is that consensus may still be underestimating the duration of the NAND/DRAM capex cycle: if memory customers are mid-cycle rather than late-cycle, equipment demand can stay elevated for several quarters even without an obvious near-term re-acceleration. That makes the stock less about this print itself and more about whether the industry starts to reprice FY26 wafer-fab equipment demand.

NOW is a different animal: the market is treating it as an AI “show me” story, but that is precisely where a modest beat can matter most. If management confirms AI-driven workflow adoption is translating into consumption and operating leverage, the revision cycle can turn quickly because software multiples have been compressed before the full margin benefit shows up. The bigger risk is not a bad quarter, but a report that is merely good enough without evidence that AI is improving deal quality, seat expansion, or margins, which would keep the de-rating intact.

The contrarian read is that both names may be owned by investors looking for “best-in-class” post-selloff rebounds, making the earnings reaction vulnerable to a classic buy-the-rumor/sell-the-news outcome. For LRCX, the market may already be pricing a robust memory recovery; for NOW, the bar is not EPS but narrative confirmation. In both cases, the highest-probability move is not chasing the upside pre-print, but structuring around a volatility event where even a small positive surprise can force short covering and estimate revisions over the next 1-3 weeks.

Key Decisions for Investors

• Initiate a short-dated call spread in LRCX into earnings (buy ATM, sell ~10-15% OTM) for a controlled upside expression; thesis is a modest beat plus guide stability can re-rate the stock 5-8% in days, but implied vol likely overstates post-print move.
• Buy NOW on a post-earnings dip only if management confirms AI-driven consumption metrics and margin expansion; target a 3-6 month hold, with upside driven more by estimate revisions than headline EPS.
• Pair trade: long LRCX / short a higher-beta semiconductor equipment peer that lacks memory leverage, to isolate the memory capex inflection and reduce market beta; time horizon 1-2 quarters.
• For NOW, consider a risk-defined bullish structure into the print only if premium is not excessive: call spread targeting a 10-15% move, with stop-loss on any commentary that AI is still experimental rather than monetized.
• If LRCX gaps up >6% on the print, take profits on at least half the position within 1-3 sessions; the risk/reward shifts quickly because the market tends to fade strong beats once expectations reset.