These 2 Computer and Technology Stocks Could Beat Earnings: Why They Should Be on Your Radar

The article highlights Zacks Investment Research's Earnings ESP (Expected Surprise Prediction) tool, designed to identify stocks likely to exceed quarterly earnings estimates by comparing the Most Accurate Estimate to the Zacks Consensus Estimate and integrating the Zacks Rank. This methodology has historically demonstrated a 70% success rate in predicting positive earnings surprises, leading to an average annual return of 28.3% over a 10-year backtest. Apple (AAPL) with a +4.3% ESP and STMicroelectronics (STM) with a +48.94% ESP are presented as current examples of technology stocks potentially poised for positive earnings surprises, suggesting they warrant attention for earnings season trading.

Analysis

According to a quantitative analysis using the Zacks Earnings ESP model, Apple (AAPL) and STMicroelectronics (STM) are showing indicators of a potential positive earnings surprise in their upcoming quarterly reports. The model, which has a 70% historical success rate in predicting positive surprises when combined with a Zacks Rank of #3 or better, identifies discrepancies between the most recent analyst estimates and the consensus. For Apple, which holds a #3 (Hold) rank, the Most Accurate Estimate of $1.48 per share exceeds the Zacks Consensus Estimate of $1.42, yielding a positive ESP of +4.3% ahead of its July 31, 2025, report. The signal for STMicroelectronics is considerably stronger; with a #2 (Buy) rank, its Most Accurate Estimate of $0.14 is significantly above the $0.09 consensus, resulting in a +48.94% ESP for its July 24, 2025, earnings release. This data suggests that recent analyst revisions are bullish for both technology firms, but point to a particularly large potential upside surprise for STM.

Key Decisions for Investors

• Investors should consider utilizing positive Earnings ESP figures as a quantitative screen to identify stocks with a historically high probability of beating earnings estimates, particularly for earnings season trading strategies.
• Given STMicroelectronics' strong 'Buy' rating and a substantial +48.94% ESP, tactical investors could consider a bullish position ahead of the July 24 earnings report to capitalize on a potential significant beat.
• For Apple, the more modest +4.3% ESP combined with a 'Hold' rating suggests a less pronounced upside surprise, warranting a hold-and-monitor approach for existing investors rather than initiating aggressive new positions before the July 31 report.
• Monitor analyst estimate revisions for both AAPL and STM as their report dates approach, as the predictive power of the ESP metric increases with the recency of the estimates.