Why Investors Need to Take Advantage of These 2 Computer and Technology Stocks Now

Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.

The Zacks Earnings ESP, Explained

The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.

With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.

Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.

Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.

Should You Consider Broadcom Inc.?

Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Broadcom Inc. (AVGO) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.88 a share, just 24 days from its upcoming earnings release on December 11, 2025.

By taking the percentage difference between the $1.88 Most Accurate Estimate and the $1.87 Zacks Consensus Estimate, Broadcom Inc. has an Earnings ESP of +0.78%. Investors should also know that AVGO is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

AVGO is just one of a large group of Computer and Technology stocks with a positive ESP figure. Western Digital (WDC) is another qualifying stock you may want to consider.

Western Digital is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on February 4, 2026. WDC's Most Accurate Estimate sits at $1.93 a share 79 days from its next earnings release.

Western Digital's Earnings ESP figure currently stands at +4.61% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.85.

AVGO and WDC's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

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This article originally published on Zacks Investment Research (zacks.com).

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