by Louis Navellier
August 4, 2026
First, let me report on some more leading stocks and their impressive earnings released last week:
- Last Tuesday, July 28, Seagate Technology (STX) announced its latest quarterly revenue rose by 7.8% to $3.63 billion, compared with $2.44 billion in the same quarter a year ago. During the same period, the company’s operating earnings rose 102.5% to $1.319 billion, or $5.71 per share vs. $559 million or $2.59 per share last year. The analyst community was estimating revenue of $3.49 billion and operating earnings of $5.10 per share, so Seagate posted a 3.9% revenue surprise and 12% earnings surprise, while raising its quarterly guidance above analyst estimates.
- Then, on Thursday, July 30, nVent Electric plc (NVT) announced its second-quarter revenue rose 52.8% to $1.471 billion compared with $963 million in the same quarter a year ago. During the same period, the company’s earnings rose 92.7% to $301 million or $1.32 per share compared to $157 million. Excluding extraordinary items, nVent Electric’s operating earnings were $1.45 per share. The analyst community was expecting revenue of $1.26 billion and operating earnings of $1.16 per share, so the company posted a 25% revenue surprise and a 28.1% earnings surprise. nVent Electric also raised its guidance above analyst estimates, so it is firing on all cylinders.
- And on Friday, Quanta Services (PWR) announced its second-quarter revenue rose 41.1% to $9.557 billion compared with $6.773 billion in the same quarter a year ago. During the same period, the company’s earnings rose 94.7% to $451.4 million or $2.96 per share compared to $229.3 million or $1.52 per share. Excluding extraordinary items, Quanta Services’ operating earnings were $4.24 per share. The analyst community was expecting revenue of $8.61 billion and operating earnings of $3.31 per share, so the company posted an 11% revenue surprise and a 28.1% earnings surprise. Quanta Services also raised its guidance above analyst estimates and reported its total order backlog rose 49.1% in the past year to $53.44 billion. Also notable is the fact the company’s order backlog for next year rose even faster, by 61.2%, to $33.31 billion.
The biggest story now for data center-related companies is the growing order backlogs and high memory prices, reflecting product shortage. After Google (GOOG) announced 24% second-quarter sales growth and 294% earnings growth – a whopping 209% higher than analyst estimates – the company said it now expects to spend $200 billion on AI infrastructure, above their prior guidance of $180-to-$190 billion.
Right now, the order backlog is so big the data-center boom is expected to persist through at least 2029, as higher AI infrastructure spending continues to bode well for many of our data-center related stocks!
Meanwhile, Europe is still resisting economic growth and technological progress. While China and the U.S. are in a race to dominate AI, the European Union (EU) remains hell bent on fining U.S. technology companies: They recently imposed a $1 billion fine on Google. President Trump threatens more tariffs on EU imports due to their Google fine, so the war between the EU and American tech companies persists.
Despite their resistance to American technology, the EU is calling for government and private investment in several new AI gigafactories. Specifically, the EU formally launched a bidding process for large-scale artificial intelligence factories in an effort to build-out its own tech capabilities and catch up with rivals in the U.S. and China. The European Commission said this tender offer will be supported by 10 billion euros ($11.5 billion) in public funding from EU member states as they try to raise 20 billion euros in private investments. This tender offer will support up to seven AI Giga-factories. I am happy to see the EU finally embracing AI, which means the order backlogs for AI data-center companies will grow even more.
As second-quarter earnings unfold, most reports shore up our fundamentally superior stocks, while stocks without earnings or disappointing results are being crushed. SpaceX has declined about 50% from its highs and is not expected to be profitable until late2027 or 2028. This is why money managers who “bet the ranch” on Elon Musk – like Ron Baron and Cathie Wood – have negative year-to-date returns.
Meanwhile, chaos in the Middle East is helping boost the growth of defensive contractors and many energy stocks, as oil prices remain in a higher plateau. Not only is the U.S. the largest producer of crude oil and natural gas in the world, but a strong U.S. dollar continues to attract global capital to the U.S.
Last Week’s “Capitulation Day” was Tied to the FOMC Meeting …
And a Popular (But Cocky) Young “Nostradamus” of Fund Trading
The Federal Open Market Committee (FOMC) statement last Wednesday was very “matter of fact,” in saying the FOMC voted 9-to-3 to keep key interest rates unchanged. The three FOMC dissenters – namely Cleveland’s Beth Hammack, Minneapolis’s Neel Kashkari and Dallas’s Lorie Logan – voted in opposition, since they wanted to raise key interest rates by 0.25%. Otherwise, there were no changes since the last FOMC meeting, as the FOMC reiterated, saying their committee “will deliver price stability.”
During his press conference, new Fed Chairman Kevin Warsh said he welcomed a “good family fight” over interest rate decisions, and he said a “good family fight” was exactly what he got. Since Warsh is in the midst of remaking the Fed’s economic reports and processes – from the bottom up, via five task forces – he also reminded reporters these changes are designed to make the Fed more responsive in the future.
Despite this candid statement of the realities facing the Fed now, the stock market staged an impressive intraday reversal on Wednesday, as the stock market was hit with relentless selling pressure in the last hour of trading, in what can be best described as capitulation. An impressive rebound ensued the next day, Thursday, partly due to Microsoft’s better-than-expected results, but the next test for the market may be how it fares during any “retest” of last Wednesday’s lows. If I had to forecast such a move, I’d say most capitulation selling typically does not have to generate a retest, especially if we keep seeing increasingly solid positive earnings surprises, which is a positive development for our fundamentally superior stocks.
Also, last Wednesday’s capitulation selling was apparently triggered by the meltdown in the Situational Awareness hedge fund, which (according to the Financial Times) was up 439% in the first six months of 2026. Then, as The Wall Street Journal reported, Situational Awareness fell 67% in July. Due to excess leverage by prime brokers, Situational Awareness was put on a “watch list” by some prime brokers, which quickly led to its eventual demise, and Citadel snapped up what is left of Situational Awareness.
The founder of Situational Awareness was 24-yead old Leopold Aschenbrenner, who was dubbed the “Nostradamus of AI.” A Wall Street wunderkind, he attended Columbia when he was 15, graduated at 19, then worked for Sam Bankman-Fried’s FTX. The wild trading in Bloom Energy and SanDisk was apparently triggered by the unwinding of Situational Awareness. Ironically, it was not stock picking or AI sinking the fund, but the leverage, which was apparently in excess of 10-to-1. This is not the first time prime brokers have sunk a hedge fund by aiding and abetting leverage. The same thing happened to Bill Hwang of Archegos Capital Management in 2021. He was subsequently sentenced to 18 years in prison for market manipulation. This time around, due to Citadel’s rescue of young Leopold, I expect he will escape any charges, but he has to learn to avoid using leverage if he re-emerges as a money manager!
In conclusion, we are now in the midst of another phenomenal earnings announcement season, which can best be described as “judgment day” for our fundamentally superior stocks. Even when some of our stocks – like Comfort Systems and Google – do not go up immediately after posting positive earnings news – they tend to firm up fast, later on. Nvidia also tends to rally on anticipation of its earnings rather than pop immediately after announcing its better-than-expected results. Nowadays, a company’s guidance and order backlog are becoming increasingly important, rather than just a spectacular sales and earnings beat.
Earnings momentum is still accelerating. When second-quarter earnings announcement season is over, the S&P 500 will likely post over 30% overall earnings growth, aided by big companies like Google, which just announced 294% earnings growth. Believe it or not, the analyst community is forecasting even stronger earnings growth in the third quarter, so this year is shaping up to be phenomenal, finishing on a strong note, so I expect our fundamentally superior stocks to soar by another 40% to 50% this year!
Overall, you can buy my fundamentally superior stocks confidently, since the mean reversion correction is now over and wave after wave of powerful second-quarter results are propelling our stocks higher.
Normally, I do not like August, since it is a seasonally weak month when Wall Street and Europe go on vacation, causing “air-pockets” (sharp declines on low volume) which frighten investors. However, since a mean reversion correction already occurred, and the stock market is oversold, I remain confident. As always, our best defense is a strong offense. While former flagships like Tesla and SpaceX falter, fundamentally superior stocks are expected to continue to reassert their leadership in the second half of the year!
Navellier & Associates; own Nvidia (NVDA), Alphabet Inc. Class A & C (GOOGL), Comfort Systems USA, Inc. (FIX), Sandisk Corporation (SNDK), Quanta Services, Inc. (PWR), nVent Electric plc (NVT), Seagate Technology Holdings PLC (STX) and Bloom Energy (BE) in managed accounts. A few accounts own Tesla (TSLA) per client request. We do not own Space Exploration Technology Corp (SPCX). Louis Navellier and his family own Nvidia (NVDA), Alphabet Inc. Class A & C (GOOGL), Comfort Systems USA, Inc. (FIX), Sandisk Corporation (SNDK), Quanta Services, Inc. (PWR), nVent Electric plc (NVT), Seagate Technology Holdings PLC (STX) and Bloom Energy (BE) via a Navellier managed account and Nvidia (NVDA) in a personal account. They do not own Tesla (TSLA) or Space Exploration Technology Corp (SPCX) personally.
All content above represents the opinion of Louis Navellier of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Powerful Earnings Could Override the August “Doldrums”
Income Mail by Bryan Perry
Lowering Leverage Before Leverage Runs Riot…Again
Growth Mail by Gary Alexander
The Worst Midterm Election Reversals – Often Spark the Sharpest Market Recoveries
Global Mail by Ivan Martchev
When Bonds Revolt Against the Fed
Sector Spotlight by Jason Bodner
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Louis Navellier is Founder, Chairman of the Board, Chief Investment Officer and Chief Compliance Officer of Navellier & Associates, Inc., located in Reno, Nevada. With decades of experience translating what had been purely academic techniques into real market applications, he believes that disciplined, quantitative analysis can select stocks that will significantly outperform the overall market. All content in this “A Look Ahead” section of Market Mail represents the opinion of Louis Navellier of Navellier & Associates, Inc.
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