The recent sell-off in AI and momentum stocks appears to be entering a mature phase, with JP Morgan reporting that it should not cause prolonged market weakness. According to JP Morgan, despite significant declines in key stocks like Samsung and Micron, the MSCI World index remains close to its all-time highs. The bank expects strong earnings growth and limited semiconductor supply until 2028 to support a market rebound. Inflation appears to have peaked, potentially leading to lower bond yields and a weaker dollar, which could benefit broader market leadership. Early Q2 earnings are strong in both the US and Europe, indicating positive momentum ahead of the main reporting season.
Q2 earnings season is gathering pace in the US with major companies reporting results. After major banks including JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America, and Wells Fargo reported on July 14, attention now shifts to Big Tech. Alphabet and Tesla report on July 22, followed by Microsoft and Meta on July 29, with Amazon and Apple scheduled for July 30. As reported by FactSet, S&P 500 companies are expected to deliver earnings growth of 23.6% year over year, marking a second consecutive quarter of growth above 20%. This reporting season carries added significance as it's the first since the end of the Iran conflict, which had clouded corporate outlooks during first-quarter reporting. Beyond the headline figures, investors will be looking for evidence that the technology giants are generating meaningful returns from their massive AI investments, with the five largest hyperscalers expected to spend roughly $700 billion on AI infrastructure this year.
Using the Investing.com stock screener, research identified 9 opportunities meeting specific criteria: market capitalization greater than $10 billion, earnings release by the end of July, upside potential of more than 30% based on both InvestingPro's Fair Value and average analyst price targets, and financial health score greater than 2.5/5. According to the report, these US stocks offer upside potential ranging from 31.6% to 61.5% based on InvestingPro Fair Value estimates and 31.3% to 59% based on analyst price targets. The research focused on large-cap US stocks with strong financial fundamentals ahead of their earnings releases, with the methodology specifically designed to identify undervalued opportunities with significant upside potential.
Newmont emerges as the world's largest gold miner by market capitalization, well positioned to benefit from renewed strength in gold prices. As reported by Investing.com, the company is expected to report second-quarter earnings on July 22 or 23 after posting a strong first quarter with adjusted EPS of $2.90 topping expectations and revenue climbing 45.8% to $7.3 billion. Yum China, which operates the KFC and Pizza Hut brands in China, reports second-quarter results on July 30, with the company delivering EPS in line with expectations while revenue rose 9.7% year over year in the previous quarter. Several other companies on the list offer even more compelling combinations of valuation, financial quality, and upside potential, with the research specifically highlighting these as undervalued opportunities with earnings reports coming soon.
Amazon presents a compelling investment opportunity ahead of its July 30 earnings report, with 24/7 Wall St. setting a price target of $321.66, implying 30.1% upside from the current price of $247.23. The company's Q1 2026 results showed significant momentum with AWS revenue reaching $37.6 billion, up 28% year over year - the fastest growth in 15 quarters. EPS of $2.78 beat estimates of $1.73, while total revenue grew 16.6% to $181.52 billion. However, Q1 net income was inflated by a $16.8 billion pre-tax Anthropic gain, and trailing free cash flow collapsed 95% to $1.2 billion as capex ran to $43.2 billion in the quarter alone. The company's AI strategy centers on custom silicon monetization through Trainium and Graviton chips, which run at over $20 billion annually with $225 billion in Trainium revenue commitments including OpenAI and a $100 billion+ Anthropic deal. Q2 guidance calls for revenue of $194-199 billion, with bulls targeting $369.61 (49.5% upside) based on AWS reacceleration and monetization of the company's massive AI investments.
