*REALLY BAD NEWS* for The Stock Market...

Holy smokes. What is happening here in after hours? It is carnage across the board for basically all of your earnings. Well, what does this mean for the markets? What does it mean for AI hardware stocks and software going ahead? They're all losers. We have economic data coming out tomorrow morning and we are waiting to hear what happens with Iran and the straight of Hermoose. This is all critical, very important, time-sensitive information. Ladies and gentlemen, the only thing that I ask you to do is hit the like button to help push this video out to more people that need to hear it. Okay. Now, before we get into your catalyst coming out tomorrow, my general views on this market, we need to talk about the earnings here in after hours. After all, it is earnings season and that is going to drive big moves in the markets. We're going to talk about a couple of stocks here right now. First things first, SanDisk, Zillow, Western Digital, Elf, and Apploven, they're all red. They're all down 5 to 20%. So, let's begin with the market darling of them all. I I think that's fair. That is SanDisk. SanDisk is down about three and a half% here in after hours. SanDisk revenue at 8.97 billion. The estimate was 8.6 billion. So, you're not going to find these companies missing all too often. But the hard part about AI hardware stocks is even though they've fallen 40 to 50% from highs, people still expect them to have these massive beats and they don't. Hence why in hindsight you could probably say, well, that's why the stock sold off 40 50%. Wall Street, they already knew these companies, the big beats are over with. You could make that argument. Either way, SanDisk is still down 3 and a.5% here in after hours. Impressive revenue. The numbers are great, but just not impressive enough. Even EPS coming in at $39.25. The estimate $3545. That is up 68% quarter over quarter. It's just not good enough. Adjusted gross margin at 84.6%. The estimate 81.5%. up 58.2 percentage points year-over-year. I mean, it doesn't get much better than that. There was some weakness in the Q1 guide revenue at 10.3 billion to 10.8 billion. The estimate 11.1 billion. So, that was actually a miss by quite a a large margin. I mean, you're talking a miss anywhere from, you know, about 300 million to about $800 million, which for company that just put up 8 billion in revenue, almost 9 billion in revenue, that's that's quite a miss. Adjusted EPS for next quarter forecasted at $45.50. The expectations were right about there between $44 and $46. So, yeah, not not great. They did authorize a new buyback of $14 billion with this brings the total remaining buyback to 15.5 billion. So again, overall it's just not enough to ignite AI hardware stocks even though they've fallen 40 40 to 50%. You have to understand this rally that we seen that I was warning everyone about. Like I was literally saying do not buy these stocks at all because even then look at the earnings we're seeing. They're great. No, really no complaints in the grand scope of things, but you were pricing in something that was damn near impossible to achieve. And that's we're seeing the consequences of that right now. We also had Western Digital earnings, which some of you guys might know what this company is, some of you guys might not know what this company is, but you could tell by the chart. It is a memory stock. Well, Western Digital is down 10% here in after hours. And again, just like SanDisk, very impressive revenue at 3.7 billion. The estimate 3.69 billion. So that's a lot. That's all that was almost a miss. Pretty damn close to being a miss. That's not going to cut it. Even though revenue is up 44% year-over-year. Adjusted EPS coming in at $3.56 the estimate, $3.30. That is up 109% year-over-year. Gross margin went up 1,310 basis points year-over-year. 13% year-over-year, which is pretty insane. Free cash flow 1.3 billion, estimate 1.1 billion. For next quarter, they actually raised guidance. EPS projected at $4 plus or - 15. The estimate $381. So no matter which way you want to look at that, that was a B. Revenue for Q1 at 4.1 billion plus or minus 100 million. Um, you could say that's a little bit of a, you know, potentially a beat, potentially a miss, just depending on where the numbers actually come in, but not bad. Again, just like SanDisk, not bad, but just not impressive enough to drive another super cycle in AI hardware. And I do think that is one of the major problems right now that investors are going to run into. You know, everyone was sold on AI hardware stocks. they're just going to keep going up. I mean, everyone on Wall Street was pounding the table on the same narrative. And while the fundamentals are great, fundamentals and stock prices rarely match up. Rarely ever. What happens is the sentiment gets far ahead of the fundamentals. That's what we're seeing right now. The sentiment, the crowding, the overpositioning, the leverage got way ahead of what these companies are going to actually deliver. And now you're starting to see, yeah, these memory stocks, they're not coming out and beating by 4 billion and raising by 5 billion. You, you know, they're they're barely meeting very high expectations and in some cases guiding lower like SanDisk. And under these market conditions, you're not going to have AI hardware stocks that thrive. It's just not going to happen. So while this is not great for the broader index potentially depending on what hyperscalers do of course this is not great for AI hardware it is good for the broadening trade it is good for the rotation trade it is good for software among cyclicals financials industrials and small cap some of the areas that were kind of left behind as AI hardware stocks took over this market the next stock up on this list is apploven apploven saw software darling. Actually a very large company heading into this report. It was like a $150 billion market cap. Applovin is not a small company by any stretch of the imagination. Well, this stock is down 21.5% here in after hours. And what it really highlights is if you're a software stock and you miss on earnings even a little bit, yeah, you're you're coming down 20%. Like there is still no love lost when it comes to Wall Street and software. And this is one reason why I can make an argument. There's still a lot of opportunity in software. Even though software stocks generally a lot of them have went up a lot, look at the punishing that you're seeing from a slight miss. Like something that's not a big deal is, you know, destroying apploving. That shows you the general sentiment on uh Wall Street for the whole sector. So applo and revenue came in at 1.92 billion. The estimate was 1.94 billion. Slight miss, no big deal. Revenues up 53% year-over-year. Impressive. EPS comes in at $3.76. The estimate $3.72. So they beat on EPS. Adjusted Ebida 1.61 billion. The estimate 1.63 billion. Up 58% year-over-year. Again, a slight miss. net income at 1.27 billion, the estimate 1.26 billion, which is crazy. This company is a cash machine. They brought in revenue of 1.92 billion and net income of 1.27 billion. Means this company has bottomline margins like 70%. Which is insane. That is up 55% year-over-year. By the way, Q3 guide adjusted IBIDA at 1.71 billion to 1.74 billion. The estimate was 1.74 billion. So that is a miss at the midpoint. That's like 1.725 billion revenue of 2.06 billion to 2.09 billion. The estimate 2.07 billion. So that's actually in line with estimates a little bit higher technically at the midpoint, but you could call it a meet. Adjusted uh IBIDA margin 83%. Uh free cash flow came in at 863.3 million. Estimate 1.29 billion. adjusted EBA margin 84% up 300 basis points year-over-year and uh they did return 551.3 million to shareholders via share buybacks but again with a market cap of 150 plus billion that's kind of just minimal so yeah applovening down 23% on these results does that make sense no again Wall Street hates software like that has not changed so if you're a software stock and you come out and miss. Yeah, you are plummeting. There's there's there's no other way to put it. And that is why you need to be very careful with the stocks that you are buying right now. whether they are AI hardware, whether they are software, whether you just be careful in this kind of a market environment, especially before a midterm election where everything is scrutinized like 2021 for for that matter or even this time last year, you know, Wall Street would have shrugged something like that off. Apploving probably would fall like four to 5%. Now it's going to fall 20 plus percent. It does open up wild buying opportunities for long-term investors, but in the near term, it's really going to hurt, especially with everything going on, all the leverage concentration in the markets, major uh prime brokerages pulling back some of their credit from hedge funds. There's going to be a lot more of these quick reactions, especially on earnings. Like for an example, last night, Zeta smashed earnings. Zeta Global was up like 10 11% today. They smashed earnings. The stock was down 10% in after hours yesterday. I bought 400 shares at like $21. The stock closed today at like 27. Like, if you can read a report quickly and realize that Wall Street is just panicking, there's some pretty insane sniping opportunities in this market right now. That brings us to the next stock that reported earnings today, ELF. Okay, ELF is down four and a half% in after hours. By far a long shot, the best earnings report out of any of these companies, but the stock's still down 4%. I I also sniped ELF, by the way. We read the read the report quickly, bought a 100 shares, $75. You know, it's back up to 83 because Wall Street, they're just pretty emotional in this environment. So, you can see here their EPS came in at $1.75. The expected number was 72 cents. So that was a 143% beat. Revenue was expected at at 430.74 million. The actual number came in at 479.37 million. They beat revenue by 11%. EPS up 97% year-over-year. Revenue up 36% year-over-year. EPS up 447% quarter over quarter. Some of that does have to do with like tariff rebates, things like that. Uh revenue up 7% quarter over quarter. Wall Street was expecting ELF's revenue to go down quarter over-arter. It went up by 7% quarter-over-arter. This was a huge report for ELF. So, if we take a look, GAP gross margin 83%, adjusted, IBIDA 168.2 million, 35% margin, GAP net income 66 uh million, cash and cash equivalents 344.2 million. They raised 2027 net sales outlook to 1.938 billion to 1.968 billion from 1.835 to 1.86 billion. So their low guidance now is 1.93 billion. Last quarter their high-end guidance for this year was 1.86 billion. They raised they raised the low end of their guidance by what uh is that 100 100 million something like if I'm reading that correctly around 100 million that's impressive and and now that's their low end at the high end they raised guidance by you know even more than that outright impressive they raised their uh 2027 adjusted IBIDA outlook to 401 to 407 million from 379 to 385 million. They raised their 2027 adjusted net income outlook to 212 to 215 million from 198 to 201 million. And they raised their full year 2027 adjusted EPS outlook to $3.50 to $355 from previously $3.27 to $3.32. So across the board just a massive beat and raise. They delivered their 30th consecutive quarter of net sales growth, extending a streak of more than seven years. Strong growth was driven by retail and e-commerce across US and international markets. Gross margin expanded sharply, benefiting from tariff refunds, pricing actions, and lower tariff rates. Adjusted Ibida increased 93% year-over-year, reflecting strong operating leverage. Road outperformed earnings targets, resulting in a higher contingent consideration adjustment. And as far as management commentary, they say, quote, "With the momentum we're seeing, we raised our fiscal 2027 outlook to 18 to 20% net sales growth from 12 to 14% previously." So, the company was expecting 12 to 14% sales growth this year. Now, they say 18 to 20%. Assuming the company wants to put guidance in a range where they can actually, you know, beat that next quarter as well. Beat and raise. That's what you want to do as a company. Yeah. Uh, seems like a lot of people just got ELF wrong. But again, you know, there's there's not really any stocks that are actually going up in after hours right now following the earnings that I know of. I know eBay did report earnings stocks up like a half of 1%, but across the board, it's pretty rough. Now, Zillow's down about 13%. Who really cares about Zillow? But I'll share the numbers with you just because Zillow actually beat the estimates for this quarter. Revenue was 772 million. The estimate 758 million EPS beat by about 7 cents as well. Revenue up 18% year-over-year. EPS up 30% year-over-year. Adjusted Ebida came in at 176 million. The estimate 160 million up 14% year-over-year. They uh they did miss on the guidance for next quarter. And uh they did lower fullear guidance versus analyst expectations. You can see them on screen here. Uh yeah, that's that's not gonna fly in this market. Oh, you also had uh Figma that reported earnings revenue 370 million estimate 351 million. EPS beat estimates. Yeah. Uh Figma, [snorts] you don't even you don't even want to see this chart. Down 16 12%. Yeah. No love lost in this market. Uh Block or Square revenue 6.61 billion. um EPS everything beat. Let's see. I don't need to uh speculate here, but I would imagine yeah, stocks down 4%. This is just one of those weird days where every company, no matter how good or bad the report is, is down in after hours. Sometimes those days happen. Now, our big uh catalyst throughout the rest of this week, assuming we don't have any, you know, surprise news from Iran or the straight of moose or some kind of positive development there, um is going to be the jobs report on Friday. Again, you are expecting a stronger jobs report about 80,000 jobs. Uh last month was 57,000 jobs. As I've talked about before on this channel, you know, you you've been falling for the last four months now. every month we get a jobs report especially if we fall again if we come in lower than you know 50 60,000 like yeah uh the the talk about the labor market being super strong is going to come to an end and that's going to be good for the rotation good for the broadening if the jobs report comes in strong though and that's just going to be bad for the markets in general now tomorrow you're going to have challenger job cuts that is planned layoffs you're expecting uh that to come in at about 59,000 up from last month's number at about 46,000. You will get initial jobless claims as well tomorrow expecting about 202,000. Um and that's pretty much it. You have smaller data sets as well that we may or may not react to. You do also have a couple of earnings for tomorrow morning. Uh Kico Phillips, D-Wave, Data Dog, Celsius, Fizzer. Um, and then tomorrow in after hours you have DraftKings, Airbnb, you have Regetti, The Trade Desk, Eno Data, Redcat, and MP Materials. Friday pre-market, you have Ollo, Vistra Energy, Take 2, Wendy's, Under Armour, and ACM Research. And then next week, you're going to have a bunch of again exciting earnings as well. You're going to get deeper into earning season with more companies reporting every single day. But kind of how I'm looking at this market, it's pretty simple. You know, I'm not expecting much of good of anything. Like my expectations are very low over the next couple of months. You are rapidly entering into the period of volatility that we normally see before a midterm election. Now, if things go right with Iran and the straight of Hermoose, if we get some pleasant news u in that regard, great. That can be a positive surprise. But all else equal, if nothing really changes, it's just the time where a lot of people take a back burner. they take a profit, they shore up their books, especially with the recent, you know, fallout in AI hardware stocks and the situational awareness fund. Like, yeah, there there's not a whole lot to be super jazzed about over the next couple of months. You want to be preparing for the postmidterm rally, which again, I think are going to be the broadening trade, software financials industrials maybe healthc care, you know, these are the areas you would want to be positioning into. I don't think AI hardware stocks are going to come ripping back to life. I think we're kind of over that at this point. I think the the the the hype is gone. I I don't think it's coming back. And the faster people realize that, I think the more money you're going to be able to make. But hey, I could be wrong. I am obviously not a financial adviser. We do tend to do well in predicting this market, but I mean I tend to be early to things as well. So maybe I'm, you know, maybe it flip-flops, maybe we get a rally soon and then we kind of chill out after the midterms. I don't know. Like anything can happen. I'm just speaking historically speaking to you guys. Um, normally you get a draw down August, September, early October and then you tend to bottom, you know, roughly midocctober and then kind of rally from there. You literally go vertical for the next 10 months, right? If you could extend this chart, you would see it just fly off the damn page, right? That's what you need to be positioning for at this moment. So, let me know your thoughts on this down below in the comment section. Hit the like button as well as subscribe to the channel if you guys have not done so already. Have a fantastic rest of your day. If you guys want to come trade and invest alongside of us, that link is down below in the description of today's episode. We would love to have you over there. Come win with us. It's as simple as that. We are beating Wall Street to the puck and then we're beating Wall Street to the goal. That's it. That's as simple as it is. We find the opportunities before Wall Street and we execute on them before Wall Street. By the time everyone loves something, we already we already got rich. we already made our money, right? Uh that's the idea here, right? You never want to be chasing FOMO ever. You also don't want to buy dog companies that are going to stay low for 20 years. You want to find the companies that Wall Street is abruptly wrong about that are going to surprise you over the next 3 6 9 12 months. And that's again one reason why I really like software right now. But nonetheless, guys, it's going to be crazy out there. You need to be prepared for anything to happen.