At roughly $212 per share, Qualcomm trades around 26 times trailing earnings. That sits well below AI infrastructure peers like Broadcom (NASDAQ: AVGO) and NVIDIA (NASDAQ: NVDA). For long-term investors, the question is whether QCOM is a mispriced AI data center story finally breaking out of its smartphone shell.

For short-term traders, the question is very different. The July 31, 2026, options chain shows implied volatility running between 78% and 84% across most strikes. Heavy call interest extends as far up as $250, with active put positioning below $190. That expiration falls just days after Qualcomm’s expected fiscal Q3 earnings release, which TipRanks currently pegs for August 5, 2026.

The combination of a transformational Investor Day, a near-term earnings catalyst, and a six-month trading range of nearly 90 points makes QCOM one of the more interesting setups in the semiconductor group right now.

Why Qualcomm’s Data Center Pivot Could Re-Rate the Stock

At its June 24 Investor Day, Qualcomm raised its fiscal 2029 non-handset revenue target to $40 billion, roughly double its prior guidance. The company also set a data center revenue target of more than $15 billion by fiscal 2029.

Meta Platforms (NASDAQ: META) was disclosed as a multi-generational customer for the forthcoming Dragonfly C1000 CPU. Microsoft’s (NASDAQ: MSFT) Azure cloud unit has been tapped for the High Bandwidth Compute chip architecture, slated for mid-2027.

For a business that still draws roughly two-thirds of product revenue from smartphones, that mix shift is significant. Qualcomm also targets $10 billion in automotive revenue, more than $14 billion in IoT revenue, and non-GAAP earnings per share of more than $18 by fiscal 2029. Analysts polled by LSEG currently model fiscal 2029 EPS of $15.26, which means Qualcomm’s own targets are nearly 18% above consensus.

The strategy extends beyond merchant silicon. Qualcomm reported two major hyperscaler custom-silicon wins, each expected to exceed one billion dollars in fiscal 2027. The Modular acquisition, while dilutive, addresses Qualcomm’s historic software gap relative to Nvidia’s CUDA ecosystem.

The Chart Says Conviction Has Yet to Return

Despite Wednesday’s rally, the QCOM chart shows signs of indecision. The stock peaked near $260 in May and has been carving lower highs and lower lows since. The 50-day simple moving average at $197.75 has acted as a battleground rather than a launchpad. Friday’s surge took shares back above that level on volume of more than 23 million.

The MACD indicator, however, remains bearish on a daily basis. The MACD line at 1.33 sits below the signal line at 4.57. The histogram is negative at -3.24. That configuration typically suggests momentum has not yet flipped back in favor of the bulls, even with the strong intraday move.

Options traders appear to be positioning for sharp movement in either direction. The July 31 expiration shows implied volatility above 78% across the call chain and similar levels on puts. The largest open interest in the high-volume calls sits near the $200 strike, with active put hedging at $190 and $180. That pricing implies an expected move of roughly 12% to 15% through expiration. Traders are clearly bracing for an outsized reaction to the August earnings print.

The Bear Case: Why 26x Earnings May Still Be Right

The skeptical view starts with timing. The Dragonfly C1000 microprocessor will be available in 2028. That means none of Meta or Microsoft’s revenue will contribute meaningfully to the next two fiscal years. The all-stock Modular acquisition is valued at $3.92 billion and is expected to close in the second half of 2026, introducing near-term dilution that hits earnings now rather than later.

Smartphone exposure remains the dominant near-term variable. Management guided fiscal Q3 revenue of $9.2 billion to $10.0 billion and non-GAAP EPS of $2.10 to $2.30. Both numbers sit below the company’s fiscal Q2 results of $10.6 billion and $2.65. CEO Cristiano Amon has said China handset shipments should bottom in Q3 before recovering, but memory price inflation continues to pressure Chinese OEMs.

Competition is also intensifying. Broadcom reported $10.8 billion in AI-related revenue in its most recent quarter, up 143% year over year, while Marvell is guiding to 40% growth for the current year. Even Intel and AMD have server CPUs with core counts comparable to Dragonfly’s 250-plus design, and those parts ship years before Qualcomm’s.

Bottom Line: The Setup Favors Patience, Not Conviction

Qualcomm has given long-term investors a credible bull case. Real customer commitments from Meta and Microsoft, ambitious financial targets above current consensus, and a software acquisition that addresses a known weakness all support the thesis. The stock still trades at a discount to AI infrastructure peers, which keeps the “undervalued” framing in play.

The bear case is just as easy to assemble. Data center revenue is years away, the Modular deal is dilutive, and smartphones remain the swing factor for the next several quarters. With earnings on the calendar in early August and options markets pricing in a double-digit percentage move, QCOM is likely to keep behaving more like a trader’s vehicle than a buy-and-hold compounder in the near term.

“Earnings growth has powered the entire S&P 500 return so far this year, and we expect this dynamic to continue in the coming months,” said the firm. “The increase in consensus forward EPS estimates has outpaced the S&P 500 price gain, resulting in a decline in the P/E multiple. In fact, during the past two years, near-term earnings growth has arithmetically accounted for the entire 40% rise in the S&P 500.”

The firm added that half of that EPS growth will be from AI infrastructure investment alone, which shows no signs of slowing.

• Amazon (NASDAQ: AMZN), for example, is committing about $200 billion to capex, including a massive $25 billion investment in Anthropic to build out compute infrastructure over the next decade.
• Alphabet (NASDAQ: GOOG) has plans to invest about $190 billion into AI data centers, software, and development.
• Meta Platforms (NASDAQ: META) is investing about $145 billion in AI capex.

Big Tech Spending Continues to Surge

Consider this. There are about 4,000 operational data centers in the U.S. right now. An additional 1,500 to 3,000 are being planned or under construction. According to Pew Research, the South has 754 planned data centers. The Midwest has 419 planned. The West has 277 planned, and the Northeast has about 106 planned. Globally, there are about 10,807. 

Big tech is pouring hundreds of billions of dollars into data centers to secure a substantial market position. By owning this critical infrastructure, companies ensure they can control the “AI factories” that will power the next generation of software.

Data Center Growth is Exploding

The artificial intelligence boom is still accelerating.

With the global AI market already surpassing $230 billion in 2024, analysts now see a clear path to multi-trillion-dollar expansion—and the next five years may deliver the strongest gains yet.

Forecasts now place AI’s value between $1.7 and $3.5 trillion by the early 2030s, with the most aggressive estimates topping $7 trillion by 2035. And judging by the surge in corporate investment, the market is moving toward the high end of those projections.

Analysts Say AI Momentum is Just Beginning

Warnings of an “AI bubble” are increasingly being dismissed by top analysts.

Goldman Sachs says, “it believes the AI story is just getting started – and the investments that seem huge today will be dwarfed by the benefits AI will deliver,” as noted by Quartz.com. 

Long term, the investment bank says that AI adoption could add $20 trillion to the U.S. economy. AI, according to Goldman Sachs, is already delivering those gains in productivity when deployed right.”

JPMorgan’s Mary Callahan Erdoes added, “AI is presenting opportunities not fully appreciated or understood yet,” as noted by CNBC. “AI itself is not a bubble. That’s a crazy concept… We are on the precipice of a major, major revolution in a way that companies operate.”

“So, if you say to yourself, is AI in a bubble, I feel you have to get very granular on how you’re going to answer that, because in the U.S., we’re starting to gain traction, but we’re nowhere near the ability to have the stuff all to the bottom line.”

The Upside Potential in the S&P 500 is Still There For Investors

With billions of dollars continuing to flow into AI infrastructure, software development, and next-generation data centers, Wall Street is becoming increasingly confident that the artificial intelligence boom still has years of growth ahead. 

Goldman Sachs’ higher S&P 500 target reflects that optimism, especially as AI-driven productivity gains begin showing up in corporate earnings. 

From machine learning and automation to generative AI tools and advanced semiconductors, the artificial intelligence market is expected to expand rapidly over the next several years, creating major opportunities for both companies and investors.

According to Grand View Research, the global AI market could expand from about $137 billion in 2022 to more than $1.8 trillion by 2030. Other studies suggest AI may add trillions of dollars to the global economy over the next decade as companies use it to improve productivity, lower costs, and increase profits.

Because of this massive potential, many investors want exposure to AI-related stocks. Investors are increasingly viewing artificial intelligence as a long-term megatrend similar to the early growth of the internet or cloud computing. That excitement has helped fuel significant gains in many AI stocks, but it has also increased volatility as valuations rise and competition intensifies across the sector. For newer investors, especially, finding a balanced way to participate in the future of AI without taking excessive risk has become an important part of building a long-term portfolio.

Companies like NVIDIA (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) have become popular choices because they help power AI systems through advanced computer chips and data center technology. However, choosing the right AI stocks can be difficult. The industry changes quickly, competition is intense, and even promising companies can experience large swings in price.

For investors who want a simpler and potentially safer way to invest in the future of AI, exchange-traded funds (ETFs) can be a smart option. AI ETFs allow investors to own a collection of companies connected to artificial intelligence instead of relying on a single stock. This diversification can reduce risk while still providing exposure to the fast-growing AI market.

Why Investors Are Looking Beyond Individual AI Stocks

Global X Artificial Intelligence & Technology ETF

One ETF many investors consider is the AIQ, also known as the Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ). This fund focuses on companies that could benefit from the development and use of AI technologies across different industries. The ETF has an expense ratio of 0.68%, making it a relatively affordable way to gain broad exposure to the AI sector.

The fund includes major technology companies and AI leaders such as Palantir Technologies (NASDAQ: PLTR), Oracle (NYSE: ORCL), Broadcom (NASDAQ: AVGO), Netflix (NASDAQ: NFLX), Microsoft (NASDAQ: MSFT), and Meta Platforms (NASDAQ: META). By investing in multiple companies, the ETF spreads risk across different parts of the AI industry, including cloud computing, software, semiconductors, and digital platforms.

Global X Robotics and Artificial Intelligence ETF 

Another one of the top AI ETFs to consider for the future of AI is the Global X Robotics and Artificial Intelligence ETF (NASDAQ: BOTZ). With an expense ratio of 0.68%, the ETF invests in companies that should benefit from the increased adoption of robotics and AI. Some of its 49 holdings include NVIDIA (NASDAQ: NVDA), Keyence (OTCMKTS: KYCCF), DynaTrace (NYSE: DT), SMC Corp. (OTCMKTS: SMCAY), Intuitive Surgical (NASDAQ: ISRG), Upstart Holdings (NASDAQ: UPST), and C3.ai (NYSE: AI).

ETFs Can Help You Capture the Future of AI

Artificial intelligence is expected to remain one of the fastest-growing sectors in the global economy for years to come. As companies continue investing in machine learning, automation, robotics, and AI-powered software, investors have an opportunity to benefit from the industry’s long-term expansion. While individual AI stocks like NVIDIA and Advanced Micro Devices may continue to attract attention, AI-focused ETFs can provide a diversified approach to investing in this rapidly exploding market.

For long-term investors, AI ETFs may represent one of the most practical ways to participate in the future of AI while managing risk. Instead of depending on a single company to dominate the industry, ETFs allow investors to benefit from broader trends across semiconductors, cloud infrastructure, software, robotics, and automation. As artificial intelligence adoption expands throughout the global economy, diversified AI ETFs could continue to attract investors seeking both growth potential and a more balanced approach to one of the market’s most transformative technologies.

The artificial intelligence boom is still accelerating, with no signs of slowing down. 

 With the global AI market already surpassing $230 billion in 2024, analysts now see a clear path to multi-trillion-dollar expansion, creating substantial opportunity for investors.

Within the global market, one of the fastest-growing segments is the conversational AI market, for example. Projected to hit roughly $41 billion to $62 billion in market value by 2032, it could surpass $136 billion by 2035, according to Research and Markets. 

The rapid growth is being fueled by rising corporate adoption of AI for customer engagement, automation, personalized experiences, and operational efficiency improvements. Advances in voice recognition, generative AI, and omnichannel communication platforms are also accelerating adoption across multiple industries.

Why the Conversational AI Market Is Growing So Quickly

As noted by Research and Markets, “The surge in AI-powered customer support is a primary growth driver, as businesses shift from traditional call centers to efficient, personalized systems handling high-volume inquiries around the clock.”

The research firm went on to note that major companies are investing in solutions that not only respond but also execute actions, accelerating market expansion through enhanced efficiency and user satisfaction. Here are three stocks to consider if you want exposure to this expanding market.

SoundHound AI Is Expanding Its Voice Commerce Ecosystem

SoundHound AI (NASDAQ: SOUN) recently announced a new partnership with OpenTable, a global leader in restaurant technology, to launch a fully conversational in-vehicle voice AI reservations agent – as part of SoundHound’s in-car voice commerce platform. 

The new AI-powered system allows drivers and passengers to search for restaurants, check availability, and book reservations entirely through voice commands integrated into their vehicle infotainment systems.

The platform connects users to a network of more than 60,000 restaurants worldwide, streamlining what would otherwise be a multi-step process into a seamless conversational AI experience.

In addition, partnerships spanning Red Lobster, Burger King UK, Peet’s Coffee, Duke Health, Lucid Motors, and BNP Paribas are helping position SoundHound as one of the more diversified pure-play conversational AI companies in the market.

RingCentral Is Integrating AI Into Business Communications

RingCentral (NYSE: RNG) is the global leader in AI-powered business communications. The company recently highlighted growing adoption of its RingEX platform.

“Over a million users rely on RingCentral RingEX as a lightweight contact center, enabling employees to respond to customers alongside everyday work,” said Kira Makagon, President and COO of RingCentral.

“The future is customer-centric — uniting AI, unified communications, and contact center capabilities.”

As more companies adopt AI-enhanced communication tools to improve customer engagement and efficiency, RingCentral may benefit from expanding enterprise demand for conversational AI solutions.

Roundhill Generative AI ETF Offers Diversified AI Exposure

With an expense ratio of 0.75%, the Roundhill Generative AI & Technology ETF (NYSEARCA: CHAT) is the world’s first generative AI ETF. Some of its 38 holdings include NVIDIA (NASDAQ: NVDA), Alphabet (NASDAQ: GOOGL), Meta Platforms (NASDAQ; META), Microsoft (NASDAQ: MSFT), Oracle (NYSE: ORCL), Palantir Technologies (NASDAQ: PLTR), and Alibaba Group Holding (NYSE: BABA). 

These companies help power AI infrastructure, cloud computing, semiconductors, enterprise software, and generative AI applications, supporting the continued expansion of conversational AI technologies.

For investors seeking broader exposure to the AI sector instead of individual conversational AI stocks, CHAT may offer a diversified approach.

Conversational AI Stocks Could Benefit From Long-Term Enterprise Adoption

As artificial intelligence continues reshaping industries worldwide, conversational AI is emerging as one of the market’s strongest long-term growth opportunities.

Businesses are rapidly adopting AI-driven customer engagement tools, voice-enabled systems, and automation technologies to improve efficiency and customer experiences. Companies positioned at the center of this transition could benefit from years of sustained demand growth.

Whether through innovative platforms like SoundHound AI, enterprise communication providers like RingCentral, or diversified exposure through the Roundhill Generative AI & Technology ETF, investors have multiple ways to participate in what could become one of the largest technology expansion trends of the decade.

According to Grand View Research, the global AI boom could grow from about $137 billion in 2022 to more than $1.81 trillion by 2030. Meanwhile, the Marketing AI Institute notes that artificial intelligence could boost profitability by 38% on average and contribute up to $14 trillion in additional global economic value by 2035, based on Accenture research.

MIT Technology Review has also highlighted the rapid pace of change, noting that AI could rival or surpass human capabilities across many domains within decades. For investors, that kind of growth trajectory signals a major long-term opportunity

However, that opportunity also raises a key question: what’s the smartest way to gain exposure? For those hesitant to pick individual winners beyond names like NVDA or AMD, AI ETFs offer a more balanced and accessible approach.

Why AI ETFs Are a Smart Way to Invest in Artificial Intelligence

AI ETFs allow you to invest in a diversified basket of companies involved in artificial intelligence, automation, and related technologies. Instead of betting on a single stock, you gain exposure to an entire ecosystem—from chipmakers and cloud providers to software developers and robotics firms.

This diversification helps reduce risk while still allowing you to benefit from the overall growth of the AI industry. It also saves time and effort, since professional fund managers handle the selection and rebalancing of holdings.

AIQ ETF: Broad Exposure to Artificial Intelligence Leaders

If you want diversified AI exposure at a reasonable cost, the Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ) is a strong option.

With an expense ratio of 0.68%, the ETF invests in companies that potentially stand to benefit from the further development and utilization of artificial intelligence (AI) technology.

Some of its top holdings include Palantir Technologies (NASDAQ: PLTR), Oracle (NYSE: ORCL), Broadcom (NASDAQ: AVGO), Netflix (NASDAQ: NFLX), NVIDIA (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), and Meta Platforms (NASDAQ: META).

BOTZ ETF: Targeted Exposure to Robotics and AI Innovation

Another top option is the Global X Robotics and Artificial Intelligence ETF (NASDAQ: BOTZ), which focuses more specifically on robotics and automation.

Also carrying an expense ratio of 0.68%, BOTZ includes around 40–50 holdings such as NVIDIA, Keyence (OTCMKTS: KYCCF), DynaTrace (NYSE: DT), Intuitive Surgical (NASDAQ: ISRG), Upstart Holdings (NASDAQ: UPST), and C3.ai (NYSE: AI). This ETF leans more heavily into industrial automation and robotics, offering a slightly more concentrated bet on how AI is transforming physical industries.

For investors who want targeted exposure to robotics alongside AI, BOTZ provides a compelling complement to broader AI ETFs.

The Case for AI ETFs as a Long-Term Investment Strategy

Artificial intelligence is shaping up to be one of the most important investment themes of the next decade, and AI ETFs provide a practical way to gain exposure without taking on unnecessary risk. Instead of trying to predict which single company will dominate, funds like AIQ and BOTZ allow investors to participate in the broader ecosystem and drive innovation.

This approach is particularly valuable in a fast-evolving sector like AI, where leadership can shift quickly, and new technologies can disrupt incumbents. By investing in AI ETFs, you’re effectively positioning your portfolio to benefit from multiple growth drivers, including semiconductors, cloud computing, enterprise software, and robotics.

Over time, that diversification can help smooth returns while still capturing meaningful upside. For investors looking to balance growth potential with risk management, AI ETFs stand out as one of the most efficient ways to invest in artificial intelligence today.

In April alone, the index surged 15.3%, highlighting how demand for artificial intelligence stocks and cloud infrastructure continues to accelerate. Investors are increasingly betting that AI is not just a trend but a long-term growth driver across the tech sector.

That momentum is showing up clearly in earnings season, where several of the biggest names in tech are delivering results that validate the bullish narrative.

Apple Posted Strong Results and Raised Its Dividend

Apple (NASDAQ: AAPL) beat estimates. The company reported earnings per share of $2.01, beating estimates by seven cents. Revenue reached $111.18 billion, a 16.5% year-over-year increase and coming in $1.6 billion ahead of forecasts. Beyond the headline numbers, the company announced a quarterly dividend of $0.27 per share—payable May 14 to shareholders of record as of May 11.

It also authorized a massive $100 billion share buyback program. Wall Street quickly took notice, with Morgan Stanley noting that the results helped ease investor concerns around cost pressures while reinforcing confidence in Apple’s growth trajectory. Many analysts now believe the report could act as a catalyst for continued stock outperformance heading into the next iPhone launch cycle.

Analysts at Citigroup, Bank of America, JPMorgan Chase, and Goldman Sachs all reiterated bullish ratings, with targets ranging from $315 to $340.

However, Apple wasn’t the only tech giant that posted solid earnings this season.

Microsoft Continues to Dominate in Cloud and AI

Microsoft (NASDAQ: MSFT) also delivered a powerful earnings report, reinforcing its leadership position in both cloud computing and artificial intelligence. The company posted earnings per share of $4.27, beating expectations by 22 cents. Revenue climbed to $82.89 billion, up 18.3% year over year and above analyst forecasts.

The standout, once again, was Azure, Microsoft’s cloud platform, which saw revenue surge 40% year over year. That growth highlights the accelerating demand for cloud infrastructure needed to support AI applications, data processing, and enterprise digital transformation.

Reddit is Surging on Solid Earnings

Shares of Reddit (NYSE: RDDT) are on the run following strong earnings. EPS of $1.01 was far better than the expected 58 cents. Revenue of $663 million was also above expectations of $611 million. 

Reddit said second-quarter sales should be in the range of $715 million to $725 million, ahead of analyst estimates of $712 million. Adjusted earnings will be between $285 million and $295 million, which also beats the $276 million average estimate.

Meta Failed to Impress, Especially with Guidance

Granted, Meta Platforms (NASDAQ: META) EPS of $10.44 beat by $3.78. Revenue of 56.31 billion, up 33.1% year over year, beat by $760 million. 

Unfortunately, Meta spooked investors with an increase in capex and guidance. With guidance, despite a more than 33% increase in revenue for the first quarter, Meta Platforms expects Q2 revenue to be within a range of $58 billion to $61 billion. A midpoint of $59.5 billion would be in line with expectations. The company also expects to spend $125 billion to $145 billion in capital expenditures, up from the prior range of $115 billion to $135 billion.

AI Stock Rally Still Has Room to Run

This earnings season reinforces a central theme in today’s market: the AI stock rally is real and continues to drive outsized gains in tech stocks. Strong results from companies like Apple and Microsoft show that AI is already translating into revenue growth, while others like Meta highlight the massive investment required to stay competitive.

For investors, the opportunity remains compelling—but it’s becoming more nuanced. Not every company will benefit equally from the AI boom, and rising capital expenditures could pressure margins in the near term. That makes selectivity critical.

The bigger picture, however, hasn’t changed. As artificial intelligence adoption expands across industries, the foundation for long-term growth in artificial intelligence stocks remains firmly in place.

Instead, the stock sold off, and the explanation came quickly, almost too quickly, with soft guidance taking the blame as Spotify projected 17 million net MAU (Total Monthly Active Users) additions to reach 778 million and 6 million premium subscriber additions to reach 299 million, both coming in below expectations that had already pushed premium above 300 million. That shortfall was enough to turn what was technically a beat into something the market treated as a miss.

Why Everyone Is Reading The Business As Weak

The concern sits deep in the ad business, and it’s not subtle. Spotify now has 483 million ad-supported users, up 14% year over year, yet the revenue tied to that base came in at €385 million, down 5%, a divergence that typically signals something is breaking underneath the surface.

In most platform businesses, that would be a real problem. More users should translate into more monetization, not less. When that relationship breaks, it tends to ripple through the entire model.

That’s why companies like Meta Platforms (NASDAQ: META) and Alphabet (NASDAQ: GOOGL) trade so tightly with advertising cycles, because when ads weaken, earnings follow, and there is very little insulation from that dynamic.

So the instinct here is understandable. Ads are weakening. Growth is slowing. The model must be under pressure. The problem is, it just doesn’t apply here the way you think it does.

Spotify’s Hidden “Money Vault”

Look past the ad segment in the earnings report, and the structure of the business starts to reveal itself.

Premium revenue reached €4.15 billion, up 10% year over year, supported by 293 million paying subscribers, and that growth is not just coming from user additions but also from pricing power, including subscription price increases in the U.S., which directly feeds into higher-quality revenue and expanding margins.

Follow that through the income statement, and the shift becomes difficult to ignore. Operating income came in at €715 million, up 40%, gross margin expanded to 33.0% from 31.6%, and free cash flow reached €824 million, up 54%, which is not what you see in a business that is being dragged down by a weakening core segment.

It’s what you see in a business that no longer depends on it.

Let Me Explain The Selloff

The selloff was driven by guidance, specifically €630 million in expected operating income for Q2 versus estimates closer to €684 million, alongside softer user growth expectations, which is enough to pressure a stock that has been priced for consistency.

But guidance speaks to momentum, and it doesn’t always reflect structure.

What the market is effectively saying is that if ads weaken and growth slows, earnings should follow. What Spotify just showed is the opposite, where ad revenue declined, user growth moderated, and profits accelerated anyway, which only makes sense if the underlying model has already shifted.

That is the part that isn’t being priced correctly.

How The Chart Backs Up The Thesis

Going into earnings, Spotify was already trading heavy, with a clear sequence of lower highs beneath a declining 200-day moving average, which told you expectations had been leaning cautious well before the report, and that matters because it sets the baseline for how price should react to new information. 

The earnings release triggered a sharp drop, but instead of accelerating the downtrend into a breakdown, the price flushed toward the $420 zone, tapped into prior support, and quickly stabilized, holding above the rising trendline that has been forming since February, which is not how a market behaves when fundamentals are deteriorating. 

Volume expanded on the initial reaction but did not follow through, suggesting positioning was adjusted rather than abandoned, and that distinction is critical. 

What you’re seeing is not confirmation of weakness, but a reset in expectations, where guidance shook confidence, yet price refused to collapse, reinforcing the idea that the underlying business shift is not being fully priced in.

A Look At Spotify Through A “New” Frame

Spotify used to be framed as a two-engine business where free users drove scale and advertising monetized that scale over time, with subscriptions acting as a stabilizing layer rather than the dominant driver of profit.

That framing is breaking.

Premium is now doing the heavy lifting, both in revenue and in profitability, while advertising, despite its scale, is becoming less central to the economics of the business. That is why ad revenue can decline while margins expand and why weaker guidance can coexist with stronger underlying performance.

An Ignorant Market

Spotify’s ad business is weakening, with €385 million in revenue, down 5%, despite double-digit growth in ad-supported users, and under the old narrative, that would have been enough to question the entire model.

But the business has already moved on.

Revenue increased, operating income expanded, and free cash flow reached new heights, all moving in the opposite direction of that weakness.

The market is reacting to the part of the business it understands, opening up a perfect window for anyone to stake their claim in this strong business.

If investors wanted growth, they simply had to own one or more of these stocks. One of the best ways to do that was through the SPDR S&P 500 ETF Trust (NYSEARCA: SPY), which holds all of these stocks. However, while the SPY has returned over 30% in the last 12 months, you would have likely done better by owning one or more of these individual stocks. 

But 2026 is a different story. The Magnificent 7 stocks have become the Seven Dwarfs, with the “best performers” down just over 4% as of the market close on April 6. However, while valuation is a concern for each of these stocks, it takes a bit longer to identify a structural problem that explains the negative sentiment. 

In many cases, the stocks have been a victim of their own success. This is where investors can find liquidity when they need to raise capital for life events like taxes or simply to take advantage of sector rotation opportunities. 

As another earnings season gets ready to start, it’s a good time to consider which of these stocks may deserve a look in your portfolio, and which ones may be better to avoid. It’s a topic that would make a great bar debate, so here are my best and worst Magnificent 7 stocks fo Q2 earnings season.

Best Magnificent 7 Stock: Microsoft – The Comeback Kid That Is Massively Oversold

If you’re looking for a stock where the punishment clearly doesn’t fit the crime, Microsoft (NASDAQ: MSFT) is it. Shares plunged roughly 23% in the first quarter of 2026 — the company’s worst quarterly performance since the 2008 financial crisis — and yet the actual business has rarely looked better. Revenue grew 17% year-over-year to $81.3 billion in its most recent quarter, operating income rose 21%, and Microsoft Cloud crossed $50 billion in a single quarter for the first time. That’s not a company in distress. It’s a company being punished for spending aggressively on a future that hasn’t fully arrived yet.

The core concern on Wall Street is straightforward: Microsoft’s capital expenditures surged 66% year over year to $37.5 billion last quarter as the company continues to invest in AI data centers, GPUs, and cloud infrastructure. Azure growth, while still a robust 39%, decelerated slightly from the prior quarter. And in an environment where investors are already jittery about AI’s return on investment, that combination was enough to trigger selling.

But the selloff has created a compelling setup heading into earnings, expected in late April. Microsoft’s 14-day RSI recently fell below 30, deep into oversold territory, even as analysts maintain an average price target near $590 — a massive premium to where the stock has been trading. The valuation multiple hasn’t been this compressed since the fourth quarter of 2022. That was when OpenAI introduced ChatGPT, and before Microsoft’s AI-driven re-rating began, which feels like a meaningful marker.

The bull case is straightforward. Commercial remaining performance obligations — essentially the company’s forward revenue backlog — more than doubled year over year to $625 billion, a staggering figure that signals customers are locking in multi-year AI and cloud commitments. Demand for Azure continues to outstrip supply; CFO Amy Hood has said growth could have been even higher if the company had directed more chip capacity toward cloud customers. Microsoft returned $12.7 billion to shareholders through dividends and buybacks last quarter, up 32% from a year earlier. These are not the metrics of a company losing the AI race.

Will Q3 earnings be a flawless beat? Probably not — cloud growth is still moderating, and capacity constraints will linger. But MSFT at these levels already prices in a lot of bad news. Investors willing to look past one or two quarters of noise could be getting one of the great AI infrastructure businesses in the world at a historically attractive price. Sometimes the best trade is the one that feels the most uncomfortable.

Honorable Mention: NVIDIA – Still the King, But Know What You’re Buying

It’s almost impossible to write about AI stocks without giving NVIDIA (NASDAQ: NVDA) its proper due. Fiscal year 2026 revenue came in at roughly $216 billion — up 65% year-over-year — and the company guided for $78 billion in Q1 fiscal 2027 revenue. These are numbers that most technology companies can only dream about.

But there’s a wrinkle that investors need to understand before earnings season: NVIDIA has no China data center revenue baked into its near-term guidance. Export control restrictions removed NVIDIA’s H20 chips from the Chinese market, costing the company billions in revenue and forcing a painful write-down last year. Whether that headwind gets resolved (or gets worse, depending on tariff developments) is one of the biggest single variables for the stock.

NVIDIA deserves its place on any serious investor’s watchlist. The Blackwell chip architecture is ramping, hyperscaler spending on AI infrastructure remains ferocious, and demand is structurally supply-constrained. But the stock has already recovered significantly from its lows, and the China overhang means Q1 results could disappoint relative to loftier expectations. NVDA is a long-term hold, not necessarily a short-term trade. For patient investors, it remains the backbone of the AI infrastructure build-out.

Worst Magnificent 7 Stock: Meta Platforms – Litigation Will Keep Gains in Check

Meta Platforms (NASDAQ: META) is a genuinely difficult stock to argue against on fundamentals. The advertising engine is humming, AI is improving ad targeting, Reels has kept users engaged, and the FTC’s antitrust case, which threatened to force the company to divest Instagram and WhatsApp, ended in a decisive victory when Judge James Boasberg ruled in November 2025 that Meta does not hold a monopoly in social media. Mark Zuckerberg can be forgiven for exhaling.

The problem is that one legal door closing has opened a dozen others, and the ones that just swung wide are far messier. In late March 2026, a New Mexico jury ordered Meta to pay $375 million after finding the company misled users about platform safety and failed to protect children from predators. A day later in Los Angeles, a separate jury found Meta negligent in a personal injury trial involving social media’s mental health effects on young users. That California case is explicitly tied to roughly 2,000 additional pending lawsuits. It’s a bellwether, and the bellwether did not ring in Meta’s favor.

These aren’t isolated incidents. More than 40 state attorneys general have active lawsuits against Meta related to child safety. The New Mexico attorney general has publicly stated that these verdicts could prompt Congress to revisit or revamp Section 230 of the Communications Decency Act — the liability shield that has protected platforms for 30 years. If that shield gets meaningfully weakened, it doesn’t just affect one quarter’s earnings. It changes the fundamental cost structure of the business.

Then there’s the spending side. Meta has guided for up to $135 billion in AI-related capital expenditure in 2026 — a staggering sum that, combined with Reality Labs’ $80-plus billion in cumulative operating losses since 2021, means the company is writing enormous checks in multiple directions simultaneously. The stock recently traded near $595, well off its 52-week high of $796. That’s meaningful compression, but it doesn’t necessarily make Meta cheap when you factor in a legal liability that is growing, not shrinking.

Wall Street still overwhelmingly rates META a buy, and it’s easy to see why — the core ad business is exceptional. But heading into earnings, the headline risk from litigation is real, and the FTC appeal (now before a higher court) keeps that antitrust cloud partially overhead. The stock can absolutely work over the long run. But for the near-term window around earnings, there are cleaner bets in the group.

Conclusion

Earnings season has a way of forcing clarity on stories that otherwise drag on for quarters. For the Magnificent 7 in 2026, the tension isn’t about whether these businesses are great — most of them are — it’s about whether the prices reflect the complications that come with being dominant at scale.

As always, these aren’t buy or sell recommendations — just one investor’s read on where the risk-reward sits as earnings season kicks off. The bar debate version is a lot more fun with a cold drink in hand.

According to Reuters, utilities across the U.S. are now projecting electricity sales growth far beyond what analysts expected just months ago. 

Data centers are a key driver of nuclear energy demand. In fact, nine of the top ten U.S. electric utilities have identified data centers as a primary source of customer growth, forcing them to revise both capital expenditure plans and long-term demand forecasts upward. 

Big Tech is Going Nuclear

Meta Platforms (NASDAQ: META) made a decisive move to meet nuclear energy demand. The company recently announced agreements to secure approximately 6.6 gigawatts of nuclear power capacity by 2035 to support its growing network of AI-driven data centers. One of those agreements involves Vistra Energy, which will supply electricity from three existing nuclear power plants.

Meta’s strategy reflects a broader reality: renewable sources like solar and wind, while essential, can’t always provide the consistent, around-the-clock power that AI infrastructure requires. Nuclear energy, on the other hand, offers reliability, scalability, and zero-carbon output—making it uniquely suited for this new era of demand.

Meta isn’t stopping there. It’s also partnering with Oklo to help develop a 1.2-gigawatt power campus in Ohio. The agreement includes a mechanism for Meta to prepay for energy, helping fund development and accelerate the deployment of Oklo’s next-generation nuclear technology.

Why Nuclear Energy is Back in Focus

For years, nuclear energy was largely sidelined due to high costs, regulatory hurdles, and public perception concerns. But the AI boom is changing that narrative.

Today, nuclear checks several critical boxes:

• Reliability: Unlike intermittent renewables, nuclear provides consistent baseload power
• Scalability: New reactor designs promise faster and more flexible deployment
• Clean Energy Goals: Nuclear produces virtually no carbon emissions
• Energy Security: Domestic nuclear power reduces reliance on foreign energy sources

As governments and companies race to secure stable power for AI, nuclear power is quickly becoming a priority.

How Investors Can Gain Exposure

For investors looking to capitalize on this trend, exchange-traded funds (ETFs) offer a diversified and accessible entry point into the nuclear energy space.

Global X Uranium ETF (URA)

The Global X Uranium ETF, with an expense ratio of 0.69%, provides broad exposure to companies involved in uranium mining and nuclear component production. Its portfolio includes around 50 holdings across the nuclear supply chain—from extraction and refining to equipment manufacturing. Top holdings include major industry players like Cameco (NYSE: CCJ), NexGen Energy (NYSE: NXE), Uranium Energy Corp. (NYSEAMERICAN: UEC), Paladin Energy (OTCMKTS: PALAF), Denison Mine (NYSEAMERICAN: DNN), and NuScale Power (NYSE: SMR).

VanEck Uranium and Nuclear ETF (URNM)

Another strong option is the VanEck Uranium and Nuclear ETF, which carries a slightly lower expense ratio of 0.56%. This ETF tracks an index focused on companies involved in uranium mining, nuclear facility construction, reactor engineering, and nuclear-based electricity generation. Its holdings include Cameco, Constellation Energy (NASDAQ: CEG), Oklo (NYSE: OKLO), Denison Mines, Uranium Energy Corp, and PG&E (NYSE: PCG).

The Bottom Line

In short, what we’re witnessing these days is the early stage of a major shift in how power is generated, distributed, and consumed. As hyperscalers like Meta lock in nuclear supply and utilities scramble to meet growing demand, we’re seeing a multi-year growth opportunity.

As the world leans further into AI and electrification, invest in nuclear energy with well-diversified, lower-cost exchange-traded funds.

Unlike the massive, multi-billion-dollar reactors that defined the first nuclear era, small modular reactors are compact, factory-built, and designed for faster, cheaper deployment. They can be sited closer to the communities and industries that need power, and scaled incrementally as demand grows. Oklo’s Aurora powerhouse, the company’s flagship SMR concept, is designed to run on advanced nuclear fuel and even recycle used nuclear material — a circular energy model that no fossil fuel can replicate.

The demand tailwinds are real and accelerating. Tech giants, including Meta Platforms (NASDAQ: META), have already signed agreements with Oklo for up to 1.2 gigawatts of future nuclear capacity. Institutional investors have taken notice — they now own more than 85% of OKLO’s outstanding shares. Wall Street analysts carry a consensus “Buy” rating with an average price target that implies substantial upside from today’s levels. The nuclear renaissance is no longer a thought experiment; it is beginning to attract serious capital and serious customers. Oklo sits at the intersection of that transformation — pre-revenue, yes, but arguably better positioned than any pure-play SMR company in the public markets.

Oklo’s Vertically Integrated Nuclear Business Model Could Drive Long-Term Growth

Most energy companies choose a lane — generation, fuel supply, or waste management. Oklo is trying to own the entire stack. The company operates across three business units: power, fuel, and isotopes. Its power business is developing the Aurora powerhouse, a compact fast reactor designed to generate 15 to 50 megawatts of electricity per unit. The fuel business is pursuing pathways to produce and recycle High-Assay Low-Enriched Uranium (HALEU), the advanced fuel that next-generation reactors require — a supply chain that is currently a chokepoint for the entire advanced nuclear industry. The isotopes business, centered on a project in Groves, Texas, targets medical and industrial isotope production, diversifying the company’s revenue potential beyond electricity generation.

This integration is strategically significant. By controlling fuel inputs and managing used nuclear material, Oklo is positioning itself to avoid the supply-chain vulnerabilities that have plagued nuclear projects for decades. If it works, the model creates compounding competitive advantages: proprietary fuel recycling reduces operating costs, isotope revenues de-risk the business during the long runway to commercial power sales, and a unified technology platform lowers the per-unit cost of future reactor deployments. CEO Jake DeWitte has described 2025 as a “step-change” year, marking the transition from product development to active project deployment at the Idaho National Laboratory and at a commercial site in Ohio.

Earnings Report Highlights Pre-Revenue Risks and Cash Burn Concerns

Oklo reported Q4 2025 results on March 17, 2026, and the headline numbers were not pretty. The company posted a loss of $0.27 per share for the quarter, missing the consensus estimate of -$0.17 by roughly 59%. Revenue came in at zero — exactly as expected for a pre-commercial company, but still a sobering data point. For the full year, the loss from operations totaled $139.3 million, with payroll and business expenses cited as the primary drivers.

The saving grace is the balance sheet. Oklo ended 2025 with approximately $1.4 billion in cash and marketable securities, then raised an additional $1.18 billion in January 2026 through the completion of its at-the-market equity program — giving the company roughly $2.5 billion in total liquidity.

Management guided for $80 million to $100 million in cash used in operating activities for 2026, alongside $350 million to $450 million in investing activities tied to project execution across Idaho, Ohio, and Tennessee. Despite the earnings miss, shares initially rallied more than 8% in aftermarket trading as investors focused on the liquidity cushion and strategic progress rather than the widening loss.

Key Risks for Oklo Stock: Regulatory Delays, Funding Needs, and Execution Challenges

The bull case for Oklo rests on a series of milestones that have yet to be achieved — and each one carries meaningful execution risk. The most immediate challenge is regulatory. Oklo’s combined license application with the Nuclear Regulatory Commission has faced prior setbacks, and while progress has resumed, any further delays in securing construction or operating licenses would push the commercial revenue timeline beyond the currently projected late 2027 or early 2028 window. First-of-a-kind projects routinely encounter cost overruns, and even moderate capital overages could materially erode the internal rate of return on Oklo’s initial powerhouses.

The macroeconomic environment adds another layer of uncertainty. If a broader economic slowdown causes technology companies to pull back on data center capital expenditures, the near-term demand for dedicated nuclear power agreements could soften. Corporate clean-energy commitments are often the first casualty of a tightening budget cycle. Meanwhile, short interest, while declining, still represents approximately 15% of the float — a meaningful contingent of investors who remain skeptical that Oklo can execute on its ambitious timeline. Insider selling has also been notable, with executives and directors collectively disposing of millions of shares in recent months, a pattern that cautious investors are right to monitor even if the transactions occur under pre-planned trading programs.

Bearish Trend Shows Signs of Stabilization

The chart tells a story of a stock searching for a floor after a dramatic cycle. OKLO surged from roughly $25 in early spring 2025 to a peak near $175 in late October before surrendering most of those gains in a sustained downtrend that has carried shares into the mid-$50s. The stock is now trading below both its 50-day and 200-day moving averages, which continue to slope downward — a classically bearish configuration.

However, there are early signs of stabilization worth watching. The RSI (14) has moved into the mid-30s, approaching but not yet breaching the oversold threshold that has historically preceded bounces in high-beta growth names. The MACD remains negative with the signal line below zero, confirming that momentum has not yet turned, but the histogram bars are compressing — a potential early warning that selling pressure is fading.

Volume on down days has begun to ease. The options market reflects the uncertainty: conviction is thin across the chain, with neither puts nor calls showing aggressive positioning that would signal a high-confidence directional bet from institutional traders. Any meaningful recovery is likely to be gradual, with significant overhead resistance between $70 and $100, representing prior support that has turned into resistance. Patience is the operative word.

Small Modular Reactors Are a Developing Story

Oklo is a high-conviction story wrapped in high uncertainty. The structural case for small modular reactors is compelling and increasingly backed by real commercial agreements, institutional capital, and favorable policy winds. The company’s vertically integrated model, if it reaches commercialization, could prove to be a durable competitive advantage in a sector starved for integrated nuclear solutions.

But the path there requires regulatory approvals that have not yet been secured, technology deployments that have yet to be proven at commercial scale, and a balance sheet that — however well-funded today — will continue to shrink before the first dollar of revenue arrives. OKLO is a stock for investors with a long time horizon, a high tolerance for volatility, and the discipline to size a position accordingly.