Top Five Earnings That Could Move the Market This Week

US indices near record highs are looking for further indications that the AI boom will continue to fuel upside, with key tech and consumer companies reporting this week.

Notable Earnings This Week

1. Broadcom (AVGO)
2. CrowdStrike (CRWD)
3. Palo Alto Networks (PANW)
4. Dollar General (DG)
5. Lululemon Athletica (LULU)

US Stocks at Records Despite Geopolitics

US stock markets rose to new record highs on Monday despite mixed messaging on the state of play in the Middle East, as a resurgent interest in tech outweighed a bump in energy prices. Various announcements at the Computex AI conference in Taiwan helped support tech stocks as investors look ahead to several key AI-focused earnings reports this week. Tech and energy were the sectors moving higher at the start of the week, suggesting a lack of breadth in the market, which could bring renewed attention to company reports that provide insight into the broader economy. The combination could provide clues as to whether the rally will continue through the week.

Dollar General Growing as US Consumer Spending Under Pressure

The budget consumer staples company will report earnings before the market opens on Tuesday and is closely followed as a barometer of US consumer sentiment. Earnings are anticipated to rise to $1.88 from $1.78 as the company tries to improve profit margins amid a challenging economy. Those conditions are reflected in an expected meagre 3.6% increase in sales to $10.8 billion. Rival Dollar Tree handily beat estimates last week, showing that cost control is paying off in the sector. However, the market is pessimistic about budget stores, which could give Dollar General more room to surprise on the upside.

Broadcom Testing the Semiconductor Boom

The AI accelerator chip developer will be closely watched as traders check the temperature on the tech boom. Broadcom will report earnings after the market closes on Tuesday and is anticipated to post earnings of $2.36 per share, up from $1.58 a year earlier. Sales are projected to jump 47% to $22.1 billion. The company's deal with Anthropic will be in focus as investors assess whether sales trends will continue.

Palo Alto Securing Growth Amid AI Threats

The cybersecurity firm will report earnings on Tuesday after the market close, with analyst consensus for earnings remaining roughly unchanged at $0.80 after accounting for acquisition-related dilution and integration costs. Revenue, however, is anticipated to grow 29% to $2.94 billion. Competitors that have reported earlier in the season have generally beaten estimates, setting a high bar for Palo Alto. Traders are likely to focus on the company's remaining performance obligations to see whether demand growth remains solid. In its prior earnings, the company guided ARR to $7.94-7.96 billion and would need to maintain or increase it to reassure investors.

Crowdstrike Growing Customer Base

The second cybersecurity company to report this week, with earnings coming on after the close on Wednesday. Earnings are expected to jump to $1.07 from $0.73 a year earlier, while revenue advances 24% to $1.36 billion. Given the market dynamics, the company's AI exposure is likely to be in focus. Traders are likely to be more interested in forward-looking metrics, especially the Q1 ARR growth outlook and whether it shows at least a similar increase to the historical trend. 

Lululemon Dressing Up the K-Shaped Economy

The upper-end apparel company will report earnings on Thursday before the open, with analysts anticipating a decline to $1.68 from $2.60 due to tariff-related cost pressures and inventory management. Sales are expected to rise 3% to $2.44 billion, propelled by 25-30% growth in China, which will offset rising competition in the US market. Traders are likely to focus on premium demand, which has remained resilient amid inflationary pressures. A miss on earnings could leave the market concerned about the overall health of the US economy if even more affluent shoppers are holding back.

S&P500 Momentum Waning

Despite hitting new heights, the S&P 500 has lost momentum as seen in its RSI, suggesting a pullback or correction. With the upper VWAP acting as nearly flat resistance, sliding to 7600 could see prices revert to the mean near 7460, while a deeper correction could expand to 7300 - the lower VWAP. On the other hand, if bulls find their footing, the next major resistance levels lie at 7750, which would expose higher levels if the record high flips into support.

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