Evercore ISI flags Nvidia, Alphabet, Netflix and Booking for potential earnings-led rebound

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Nvidia, Alphabet, Netflix earnings rebound

Highlights

Nvidia, Alphabet, Netflix and Booking Holdings identified by Evercore ISI as undervalued stocks likely to rebound on upside earnings surprises due to cautious investor positioning.
Evercore ISI raises 2026 S&P 500 earnings-per-share forecast by over 6% to $330 and 2027 forecast by over 8% to $360, citing AI investment and easing oil prices.
Evercore ISI expects S&P 500 companies to beat second-quarter earnings forecasts by 7%, versus the pre-pandemic average, with FactSet projecting earnings growth above 20% for the second consecutive quarter.

Second-quarter earnings setup for beaten-down shares

As reported by CNBC, Evercore ISI identifies Nvidia, Alphabet, Netflix and Booking Holdings as "beaten-down beat and raisers," a group of underperforming stocks with elevated short interest and fundamentals that could support stronger performance after the earnings season.

Julian Emanuel, head of Evercore's equity, derivatives and quantitative strategy, writes that upside earnings surprises should push share prices higher because investor positioning remains cautious. The note says these stocks have struggled for different reasons even as they remain widely followed market names.

Nvidia is up more than 11% this year but trails other chip stocks, especially memory companies that benefit from supply shortages and higher prices. Alphabet has come under pressure alongside other hyperscalers as heavy AI spending and debt issuance unsettle investors. Netflix is down more than 40% from its recent peak amid M&A activity tied to its failed bid for Warner Bros Discovery, while Booking has fallen 23% as geopolitical headwinds weigh on travel.

Broader market outlook and earnings impact

Emanuel says the second-quarter reporting period could help restart the broader stock market rally, which has stalled since early June. He expects the S&P 500 to end the year at 7,750 despite concerns that include AI disruption fears, higher oil prices and the risk of further interest rate hikes.

Evercore ISI also raises its 2026 earnings-per-share estimate for the S&P 500 by more than 6%, to $330 from $310, citing continued AI spending and recent declines in oil prices. Its 2027 S&P 500 earnings forecast increases by more than 8%, to $360 from $333.

Investors remain concerned that fewer companies will deliver positive earnings surprises in the second quarter than in the first, when profits came in 15% above expectations and revived confidence on Wall Street. Even so, Evercore ISI's Stan Shipley still expects companies to beat earnings forecasts by 7% in the second quarter, which is double the rate seen before the pandemic. FactSet says the S&P 500 is expected to post a second straight quarter of earnings growth above 20%.

In our earlier article on Nvidia’s NVDA price outlook, we highlighted the stock’s strength near recent highs, supported by bullish technical signals and strong operational momentum. We also noted Nvidia’s AI-focused startup partnership program and raised revenue guidance as key fundamentals, while flagging labor litigation and short-term overbought readings as risks that could trigger pullbacks.

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