2 AI Stocks Shattered Earnings Amidst the Tech Wreck
The AI trade has come under significant pressure.
In fact, we are witnessing the most aggressive tech outflows since February.
This is a great time to hunt for deals.
2 AI stocks shattered earnings amidst the tech wreck…and that spells opportunity.
But let’s first unpack the tech selloff through the lens of our data.
Reports of forced liquidations from South Korea, and over-levered margin calls have been swirling around the headlines.
This jives well with our technology flows. Over the last 2 days, a massive rotation has hit the tech sector.
Notably, July 29th saw 55 discrete outflows spanning AI frontiers including memory, semiconductors, and optics.
This has resulted in the largest single day of outflows since February:
Now, you may be wondering if this is a great time to bail on stocks. I’d caution that view.
Here’s why: Back to 2014, we’ve had 66 prior days where we logged 55 or more Technology outflows.
What comes next is a powerful risk-on rally in the following months.
Check it out. After 55 or more Technology outflows, the XLK ETF returns average gains of:
- 3.5% the following month
- 11.9% the following 3-months
- 17.8% the following 6-months
- 27.8% the following 12-months
Note that 3 months and later, the win rate is at least 80%…with those stats, I’m inclined to look for deals amidst the wreckage.
Forced selling often precedes forced buying.
And earnings season is a great time to isolate companies beating and raising guidance.
A couple of names absolutely trounced their numbers…we see them as oversold opportunities.
2 AI Stocks Shattered Earnings Amidst the Tech Wreck
Earnings season has been phenomenal.
According to FactSet, 50.7% of S&P 500 companies have reported Q2 earnings. Incredibly, the net income blended growth rate is a stunner at 39.27%.
Couple this with forced liquidations, and you’re staring at a powerful bullish setup.
Our first AI stock that shattered earnings is Alphabet (GOOGL). The search and cloud giant has grown to a $4.2 trillion market cap.
Over the past 3-months, shares have dropped 12.5%.
This sent its P/E ratio to a lowly 19.6X.
Their recent Q2 earnings report saw sales jump to $119.8B, easily beating estimates of $117.07B.
EPS came in at $9.11, easily besting consensus of $2.88. (the beat includes Other Income boosted from unrealized gains on equity securities)
The big news was the boosted FY2026 Capex, which was revised up to $200B at the midpoint.
That’s not the exciting part.
It’s the analysts’ upward revisions to revenue that makes this a compelling long idea.
Here we can see FY 2026 revenues are estimated to reach nearly $495 billion. FY 2028 sales were revised higher to nearly $720 billion!
But to seal the deal on a great stock, we need to understand the supply and demand picture.
Institutions have loved GOOGL all year with plenty of green inflows.
The recent tech wreck has triggered an outflow. I believe this represents a great buy-the-dip opportunity.
The last time GOOGL shares logged a red signal was late March…right before staging a powerful climb. (disclosure I own shares of GOOGL in personal and a managed account)
Note the constant appearance on our Outlier 20 report (blue bars). That’s the stairway to heaven formation:
Pullbacks are part of the game.
Prior institutional favorites often revert back to leadership position once liquidations subside.
Let’s do another.
Our number 2 AI stock that shattered earnings is Celestica (CLS). This hardware and equipment manufacturer has a market cap of $39 billion.
Over the past 3 months, shares have fallen 19.8%.
However, their price to earnings valuation has fallen to the incredible level of 20.4X:
Celestica had one of the best earnings reports this season.
For Q2, sales reached $4.7 billion vs estimates of $4.39 billion. EPS clocked in at $2.54 vs $2.30 estimates.
That wasn’t the best part. It was the forward guidance that surprised everyone.
Celestica’s FY EPS guidance came in at $11.30, shattering their prior guidance of $10.15.
Folks, just look at the trajectory of earnings estimates the next few years. Next year’s EPS was raised to $19.56.
For 2028, EPS soars to $26.92:
Use the current AI selloff to your advantage. Focus on companies beating and guiding higher.
Also, follow the flows!
Celestica is a fan favorite in our data. We’ve been recommending it as a strong buy since 2023 when shares were at $15.
The current selloff has triggered 3 outflows recently.
When you step back and note that this has been one of the highest rated names in our data (blue bars) the last few years, forced-liquidations are a gift:
It’s that simple.
Markets and stocks ebb and flow.
And from time to time, over levered traders are forced to liquidate. That hits all stocks…even the great ones.
With earnings coming in strong…we see amazing valuations appearing in discrete names.
MoneyFlows helps you find them.
The AI selloff will not last forever.
Having cutting edge data at your fingertips will allow you to spot when the tide turns positive.
It always does…eventually.
Our PRO subscription will help you spot new names loved by institutions, early…while helping your portfolio stay on the right side of the Big Money.
Professional money managers and RIAs looking for additional portfolio solutions including ETF flows & ranks and your own Portfolio Tracking tools, please reach out about our Advisor Solution and Emerging Advisor Program.
AND don’t miss my in-depth conversation with Jason Bodner on 3 stocks that crushed earnings. We dive into the current selloff, why it’s happening, and when it’ll likely come to an end.
Enjoy!
***Lastly, join co-founder Jason Bodner LIVE, August 25-28, 2026, at the MoneyShow Masters Symposium in San Francisco.Â
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