Goldman Sachs' John Marshall on Tactical Earnings Trades and Market Themes

Goldman Sachs' Tactical Earnings Trades

• 🎯 Goldman Sachs has released its list of 25 tactical earnings trades for the current earnings season.
• 📈 The list aims to identify potential upside for stocks like LVS, StubHub, Meta, and UNH, and downside for names such as Southwest and Texas Instruments.
• ✅ Last quarter, this tactical list outperformed the S&P 500 by over 5%.

Underlying Market Themes

• 💡 While often a bottom-up list based on analyst estimates, themes can emerge.
• 🤖 This season, some AI-related names are present but are more under-the-surface.
• 🔌 Examples include Pterodine (semi test equipment for GPUs), Celestica (hardware customization for hyperscalers), and Arista Networks (data center connectivity).

Market Broadening and Sector Performance

• 📊 The list suggests a broadening of the market beyond just tech and consumer sectors.
• 📈 Increased earnings day moves have been observed more pronouncedly in utilities, materials, industrials, and healthcare.
• ⚠️ This broadening is surprising to analysts, as these sectors are less followed and some are benefiting from AI trends in ways not fully anticipated.
• 🚀 The outsized outperformance of earnings day moves is currently seen in tech and consumer, but is expanding to other sectors.