Data-Driven Insights: Hong Kong & U.S. Markets | The 'Super Earnings Week' Is Here—Which U.S. Stocks Are Most Likely to Beat Expectations?

• Historically, these stocks have exceeded earnings expectations at least 80% of the time; • Their average stock price gain on the day of earnings release is at least 1%. Key Highlights from the List: • Among companies reporting earnings this week, software firm ServiceNow (NOW) ranks first for highest average stock price gain on earnings release days—3.3%. NOW will report earnings on October 26 (U.S. Eastern Time), and has beaten earnings expectations 88% of the time historically. • Tech giant Apple (AAPL) is also on the list, reporting earnings on October 27 (U.S. Eastern Time). According to Bespoke Investment Group, Apple has exceeded earnings expectations 89% of the time, with an average same-day stock price gain of 1.2%. JPMorgan recently reaffirmed its “Overweight” rating on Apple shares, noting that investor attention remains focused on the iPhone despite recent reports suggesting possible production cuts. Analyst Samik Chatterjee stated in a report last Friday: “In a year where investor sentiment has shifted dramatically—from bearish (e.g., revenue decline) to bullish (e.g., modest revenue growth)—every growth catalyst matters.” One key area of focus highlighted by the bank is Apple’s new smartwatch. “Here, we’re assessing near- and long-term growth opportunities arising from Apple’s recent entry into the premium smartwatch segment; currently, Apple appears to have substantial room for further premium pricing.” • Financial services company Mastercard (MA) is also included, reporting earnings on October 27. It has exceeded earnings expectations 94% of the time, with an average same-day stock price gain of 2%. • Bespoke Investment Group data also shows Teledyne (TDY) has consistently beaten earnings expectations—and posted an average same-day stock price gain of 2%. TDY will report earnings on October 26. • Other stocks on the list include: Grand Canyon Education (LOPE), Monolithic Power Systems (MPWR), Manhattan Associates (MANH), Element Solutions (ESI), Wolfspeed (WOLF), F5 Networks (FFIV), Amphenol (APH), CoStar Group (CSGP), Costamare (CMRE), Reliance Steel & Aluminum (RS), Silicon Laboratories (SLAB), S&P Global (SPGI), SPS Commerce (SPSC), Deckers Outdoor (DECK), John Bean Technologies (JBT), Valero Energy (VLO), Polaris (PII), and Booz Allen Hamilton (BAH).

Ji Yoo (Head of Investor Relations): Thank you, moderator, and good afternoon, everyone. Joining me today are: Hock Tan, President and CEO; Charlie Kawwas, President of the Semiconductor Solutions Group; Ram Velaga, President of the Infrastructure Software Group; and Kirsten Spears, Chief Financial Officer. We are also pleased to welcome our newly appointed CFO, Amie Thuener. As previously announced, Kirsten will officially retire on June 12. We extend our sincere gratitude to Kirsten for her exceptional leadership over the past 12 years. In the prepared remarks, Hock Tan and Kirsten will review second-quarter fiscal year 2026 financial results, provide third-quarter guidance, and offer commentary on the business environment. Following the prepared remarks, we will open the call to questions. Now, please welcome Hock Tan. Hock Tan (President and CEO): Thank you, Ji—and thank you all for joining us today. Quarterly Overview: In the second quarter of fiscal year 2026, the company achieved a record $22.2 billion in total revenue—a 48% year-over-year increase—exceeding prior guidance, driven primarily by robust growth in AI semiconductor business. The second-quarter operating margin reached a record high of 67%; adjusted EBITDA as a percentage of revenue also hit a record high of 69%, again surpassing guidance. Even amid a sharp AI-driven revenue surge, our operating and EBITDA margins remain solid. Semiconductor Business: Second-quarter semiconductor revenue reached a record $15.0 billion, up 79% year-over-year. AI semiconductor revenue alone hit a record $10.8 billion, surging 143% year-over-year—above prior expectations—with networking products accounting for approximately 40% of second-quarter AI revenue. Demand for XPU and networking products is exceptionally strong. AI semiconductor orders for the quarter exceeded $30 billion—far surpassing the $10.8 billion in shipments during the same period. For the second half of fiscal year 2026, we expect AI semiconductor revenue to double compared to the first half of this year. In the third quarter, AI semiconductor revenue is expected to accelerate to $16.0 billion—an increase of over 200% year-over-year. For full-year fiscal 2026, we project AI semiconductor revenue to reach $56.0 billion—up approximately 180% versus fiscal year 2025. We anticipate this growth momentum to continue into fiscal year 2027 and reaffirm our guidance that AI semiconductor revenue will exceed $100 billion. Growth Drivers Beyond 2026—Our Six Strategic Customers: Below are strategic initiatives underway with our six core customers: Google: In April, we announced a long-term agreement covering development and supply of multiple generations of TPUs and AI networking products. This partnership with Google is highly strategic and exceptionally large in scale. Our continued technological superiority and execution capability—relative to alternatives—ensure that our business collaboration with Google will grow sustainably for the foreseeable future. In fiscal year 2026, we will deliver over one gigawatt (GW) of TPU-based compute capacity to Google.

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