MW These five tech stocks could let you play earnings season like a pro

By Christine Ji

We surveyed experts on their favored picks heading into earnings season - and identified companies across the tech sector

Meta, led by Mark Zuckerberg, is one stock that analysts have high conviction about heading into earnings season.

In the coming days, third-quarter earnings reports will present a key test for technology stocks - and a chance for investors to take advantage of big stock swings.

Enthusiasm for the artificial-intelligence trade has been high leading up to earnings season, and investors will be paying attention to which companies are making money off the theme - as well as which ones may not be living up to the hype.

Members of the "Magnificent Seven" group of megacap stocks in particular will be in the spotlight as they provide updates on AI capital expenditures and monetization. Meta Platforms Inc. (META), Alphabet Inc. $(GOOGL)$ $(GOOG)$, Microsoft Corp. $(MSFT)$, Amazon.com Inc. (AMZN) and Apple Inc. $(AAPL)$ are all scheduled to report earnings in the next week.

Stocks can swing wildly based on earnings results, as investors learned recently when Broadcom Inc. $(AVGO)$ and Oracle Inc. $(ORCL)$ posted their latest numbers. We surveyed Wall Street analysts and portfolio managers to find some stocks they have high conviction about.

Thinking big

For Ayako Yoshioka, portfolio consulting director at Wealth Enhancement Group, a couple of Big Tech names stand out.

Meta has "really shown the [return on invested capital] to a certain extent" when it comes to AI, Yoshioka told MarketWatch, referring to metrics the company has shared about its advertising conversion rates and engagement times. Last quarter, Meta reported a 22% increase in ad revenue year over year. Time spent on Facebook and Instagram rose 5% and 6% respectively, driven largely by AI-powered content-recommendation systems. Yoshioka expects a continuation of that trend for the third quarter.

Meta has also shown that it's willing to spend aggressively to build AI infrastructure, as seen by its recent $27 billion deal for its Hyperion data center, and investors will be looking for updated capital-expenditure forecasts.

In Yoshioka's opinion, "a slowdown or plateauing of capex spending would be concerning," but she doesn't think that will happen. While there are some concerns about an AI bubble due to intense capex numbers, Meta has repeatedly emphasized the strategic importance of AI to the business. For Meta, a pullback in AI spending would signal to investors that the company is scaling back its ambitions.

Microsoft is another high-conviction name for both Yoshioka and Bernstein analyst Mark Moerdler. Microsoft's exclusive partnership with OpenAI gives it a leg up with both its AI products and core cloud-computing growth, Yoshioka said. She also pointed to Microsoft's existing relationships with enterprise customers, which provide the company with more ways of distributing and monetizing AI products.

Microsoft's Azure business will be the big focus next week, and Moerdler expects to see 40% revenue growth year over year for the segment, higher than the 37% that the company guided for. Azure outperformance could set the company up for a revenue and operating-margin beat, Moerdler believes.

Meta and Microsoft will report earnings on Oct. 29.

Read: Microsoft's stock could come alive again if this big growth forecast pans out

Broadening out

Beyond Big Tech, Jefferies analyst Blayne Curtis is bullish on the memory-chip maker Sandisk Corp. $(SNDK)$, which is set to report earnings on Nov. 6. AI workloads have led to a massive increase in demand for storage solutions such as flash-memory and hard-disk drives, subsequently boosting Sandisk's pricing power.

In September, management confirmed price hikes of up to 10% for certain customers until year-end. There could be room for further increases going into the end of the year and early 2026, Curtis wrote in a note, and the earnings call could offer more clarity on the company's pricing strategy.

Additionally, Sandisk's upcoming AI storage solution, designed for use by the biggest cloud providers in the market, is expected to ship early next year. Curtis sees this development as a major driver of market-share gains for Sandisk.

Shares of Sandisk have rallied nearly 300% in the last three months alone, giving the stock plenty of momentum going into earnings. That sets a high bar, but Curtis believes these catalysts will give the stock more room to run.

For Mike Signore, portfolio manager at T. Rowe Price, the self-driving-vehicle technology company Aurora Innovation Inc. (AUR) is also well positioned. Aurora's primary market is autonomous trucking, which Signore believes has better economics than the robotaxi market.

"The unit economics are more obvious," Signore told MarketWatch. "You can see how expensive the labor, safety and fuel is currently." With the trucking industry currently experiencing a labor shortage, eliminating the need for a human driver would increase efficiency and and reduce operating expenses.

While Signore maintains a strategy of selecting stocks based on long-term appreciation potential rather than short-term price action, he believes this quarter could serve as an inflection point for Aurora to start scaling its operations. Aurora currently has a small fleet of trucks on the road, with plans to increase to hundreds in 2026, according to management. Investors should pay attention during next week's earnings call to any announcements or guidance regarding expanding routes and vehicle deployments.

The digital-workflow software company ServiceNow Inc. (NOW) is also well positioned going into its third-quarter earnings report next week, according to Yoshioka.

The key detail that investors should pay attention to for ServiceNow is its pricing model, Yoshioka said, which combines legacy seat-based licensing with the emerging trend of AI-token usage fees.

Investor sentiment has been weak in the software sector this year because AI is expected to cut the volume of licenses purchased - or "seats" - by making companies more efficient, while also boosting AI-native rivals. However, ServiceNow has been able to upcharge its customers for its AI features and implemented a 30% price uplift for AI capabilities last quarter, Yoshioka pointed out. Further updates about the success of ServiceNow's pricing model next week could provide a catalyst for the stock.

Read on: The old software investing playbook is dead. Here's where to put your money now.

-Christine Ji

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October 25, 2025 08:00 ET (12:00 GMT)

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