|
|
|
|
|||||
|
|
|
The technology sector is riding on strong adoption of Artificial Intelligence (AI), Generative AI (GenAI) and Agentic AI. The ongoing digitalization wave, courtesy of the rapid deployment of AI and cloud computing, is driving the sector. This has fueled strong demand for high-bandwidth and low-latency networks (5G) as well as hardware chips and components (GPUs, AI accelerators, memory chips, and data center infrastructure).
These factors bode well for technology stocks, a number of which are set to report quarterly results over the next couple of weeks. We pick four technology stocks — Meta Platforms META, Reddit RDDT, InterDigital IDCC and AMETEK AME — well-poised to beat earnings estimates this season.
Rapid deployment of AI is boosting industrial automation with growing usage of the Internet of Things, robotics and automation. AI is helping in improving ad targeting and boost user engagement. Rising threat complexity is driving demand for cybersecurity software as well as tamper-proof blockchain technology. Although still in early stages, quantum computing has shown promise in solving complex problems in domains like drug discovery and logistics.
AI demand is escalating, and that has increased the need for data center capacity expansion. Leading cloud computing providers like Amazon, Alphabet, Microsoft and Meta Platforms have multi-year investment plans to support greater cloud capacity and AI deployment. While Microsoft plans to spend $80 billion, Meta Platforms plans to spend $64-$72 billion on AI-related infrastructure development.
Massive investment in chips, particularly graphics processing units (GPUs), and customized accelerators is driving demand for semiconductors. Per the Semiconductor Industry Association data, semiconductor sales in August 2025 were $64.9 billion, up 21.7% year over year and 4.4% month over month. In July, sales were $62.1 billion, up 3.6% month over month.
Moreover, the PC segment witnessed growth in the third quarter of 2025. IDC estimates 75.8 million units were sold, up 9.4% year over year. In contrast, Gartner estimates shipments of 69 million units, up 8.2% year over year.
Finding technology stocks with the potential to beat earnings estimates can be daunting. Our proprietary methodology, however, makes it fairly simple.
You could narrow down the list of choices by looking at stocks that have the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks that have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this combination of ingredients, the odds of a positive earnings surprise are as high as 70%.
Menlo Park, CA-based Meta Platforms has an Earnings ESP of +3.37% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Meta Platforms’ focus on integrating AI into its platforms — Facebook, WhatsApp, Instagram, Messenger and Threads — is driving user engagement. This is expected to boost third-quarter 2025 ad revenues, which, per the Zacks Consensus Estimate, are expected at $48.5 billion, suggesting 21.6% year-over-year growth. The social-media giant is set to report third-quarter 2025 on Oct. 29, 2025.
The Zacks Consensus Estimate for earnings has increased a couple of cents to $6.60 per share over the past month and suggests 9.45% growth over the figure reported in the year-ago quarter.
Meta Platforms, Inc. price-eps-surprise | Meta Platforms, Inc. Quote
San Francisco-based Reddit currently has an Earnings ESP of +20.17% and a Zacks Rank #1. The company is scheduled to report third-quarter 2025 results on Oct. 30.
Reddit is benefiting from strategic product enhancements, targeted marketing initiatives and international expansion. The company’s focus on search functionality is playing a significant role in user growth (110 million globally at the end of the second quarter of 2025). Reddit’s core search product boasts 70 million weekly users, while Reddit Answers, its AI-powered search tool, grew to 6 million users in the second quarter of 2025.
For the third quarter of 2025, Reddit expects revenues between $535 million and $545 million. The Zacks Consensus Estimate for revenues is currently pegged at $549.7 million, better than management’s guidance and suggesting 57.8% growth from the figure reported in the year-ago quarter. The consensus mark for earnings has been steady at 52 cents per share over the past month and suggests 225% growth over the figure reported in the year-ago quarter.
Reddit Inc. price-eps-surprise | Reddit Inc. Quote
Wilmington, DE-based InterDigital is set to report third-quarter 2025 results on Oct. 30. The company has an Earnings ESP of +17.32% and a Zacks Rank of 1.
InterDigital’s to-be-reported quarter results are expected to have benefited from strong licensing revenues driven by agreements with smartphone-makers Samsung, Apple, Oppo and Vivo. The company’s strong PC market footprint, thanks to a licensing deal with HP, is noteworthy. InterDigital expects existing contracts, including Samsung, to contribute between $136 million and $140 million to third-quarter 2025 recurring revenues. Non-GAAP earnings are expected between $1.52 per share and $1.72 per share.
The consensus estimate for InterDigital’s third-quarter earnings has been steady at $1.79 per share over the past 30 days and indicates 9.8% growth over the figure reported in the year-ago quarter.
InterDigital, Inc. price-eps-surprise | InterDigital, Inc. Quote
Berwyn, PA-based AMETEK is scheduled to report its third-quarter 2025 results on Oct. 30. The company has an Earnings ESP of +1.21% and a Zacks Rank #2.
AMETEK is benefiting from solid momentum across the Electromechanical Group and Electronic Instruments Group segments. Positive contributions from Paragon Medical, Bison Engineering, Virtek Vision, Navitar, Alphasense, Magnetrol International and Crank Software acquisitions are driving top-line performance.
For the third quarter of 2025, AMETEK expects overall sales to be up mid-single digits on a percentage basis year over year. Adjusted earnings are expected to be in the range of $1.72 -$1.76, indicating a year-over-year increase of 4-6%. The consensus mark for earnings has inched up by a penny to $2.46 per share over the past month and suggests 134.29% growth over the figure reported in the year-ago quarter.
AMETEK, Inc. price-eps-surprise | AMETEK, Inc. Quote
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).
| 1 hour |
Stock Market Rallies To Highs But Huge Earnings, Fed Meeting, Trump-Xi Ahead
META
Investor's Business Daily
|
| 1 hour | |
| 2 hours | |
| 2 hours | |
| 2 hours | |
| 3 hours | |
| 4 hours | |
| 4 hours | |
| 4 hours | |
| 4 hours | |
| 5 hours | |
| 5 hours | |
| 5 hours | |
| 5 hours | |
| 5 hours |
Join thousands of traders who make more informed decisions with our premium features. Real-time quotes, advanced visualizations, backtesting, and much more.
Learn more about FINVIZ*Elite