It’s no secret that only a select few names are driving today’s market rally…
Eight stocks, to be exact, have been doing most of the heavy lifting since the broad market’s March lows — and the price action alone makes that concentration hard to ignore.
But the earnings data complicates matters even further.
According to FactSet, the “Magnificent Seven” posted earnings growth of 63.2% in first-quarter 2026.
The other 493 companies in the S&P 500 Index grew earnings by 17.4%. That’s not bad — but it’s barely a third of what the mega-caps are putting up. And when you run that comparison back through five years of quarterly data, the gap isn’t a fluke. It’s a pattern.
Look at the chart. Both groups moved in relative lockstep, coming out of the pandemic — booming in 2021, getting slammed in 2022.
But starting in 2023, the Magnificent Seven broke away. Their earnings growth has been consistently stronger and more dramatic, and now, heading into 2026, the divergence is at its widest point in years.
Strip those names out, and what you’re left with is a market that’s doing fine — just not spectacular.
Next, using a special screener, I’ve broken down next week’s earnings into potentially “bullish” and “bearish” categories.
“Bullish” Earnings to Watch
These stocks are expected to beat their earnings per share (EPS) from the previous quarter. And if those expectations are met or exceeded, they could potentially trade higher.
For this screen, stocks must meet four criteria:
- 10 or more analysts cover the stock.
- The average analyst recommendation is a “Buy.”
- It BEAT analysts’ EPS estimates for the previous quarter.
- The average analyst estimate for the current quarter’s EPS is greater than the previous one.
Here are four companies that made this week’s list:
All four on the list are sitting in a position where the current EPS estimates represent a meaningful step up from where they were just a quarter ago — and one of them, in particular, stands out.
Ciena Corp. (CIEN) reports earnings next week, with analysts expecting EPS of $1.46 — a 42% year-over-year jump from 2025’s $1.03 mark .
And there’s a real case to be made that Ciena could clear that bar comfortably.
Ciena makes fiber-optic networking equipment that moves data at scale — the pipes that AI workloads actually run through.
As hyperscalers continue pouring money into data center infrastructure, demand for high-capacity optical networking has been accelerating.
Ciena’s last earnings call flagged stronger-than-expected order momentum, and its backlog has been building. When a company enters a quarter with visibility like that, the estimates tend to be conservative.
That doesn’t mean it’s a sure thing. Guidance, margins and management tone will matter as much as the headline number.
But of the four names on this list, Ciena strikes me as the one with the clearest runway to a genuine beat.
And a strong beat will certainly help CIEN elevate higher than its already “bullish” rating on Adam’s Green Zone Power Ratings system.
Now, let’s shift gears to those “bearish” earnings next week…
“Bearish” Earnings to Watch
For our “bearish” earnings screen, we’re only looking for two things:
- 10 or more analysts must cover the stock.
- The average analyst estimate for the current quarter’s EPS is less than the previous quarter’s.
We want companies that are covered by a sufficiently large group of Wall Street analysts who collectively expect the company to report a quarter-over-quarter decline in earnings.
Here are three companies that passed this screen:
Each of these three is dealing with its own set of headwinds, but one of them stands out as the most likely to stumble.
Dollar General Corp. (DG) reports next week, with analysts expecting $1.89 per share — basically flat with last quarter’s $1.93.
On the surface, that looks manageable. But flat estimates on a company already under pressure can be just as dangerous as a sharp drop, because there’s no cushion if anything goes wrong.
And there’s plenty that could go wrong. Dollar General’s core customer — lower income, budget constrained, living paycheck to paycheck — is getting squeezed from multiple directions right now.
Inflation on essentials hasn’t fully let up, tariff uncertainty is pushing prices higher on everyday goods and consumer confidence in that demographic has been eroding for months.
When your customer base is struggling, even a slight softness in traffic or basket size can knock you off an already-thin earnings target.
The company has also been in the middle of a self-described “back to basics” turnaround after years of operational stumbles — store resets, labor investments and shrink reduction.
That kind of internal work tends to weigh on margins before it helps the company. Dollar General may be moving in the right direction. But right now, the direction of the economy isn’t doing it any favors.
A miss here wouldn’t be shocking. It might actually be the most predictable outcome of the bunch. It would also drag on Dollar General’s “bullish” rating on Adam’s Green Zone Power Ratings system.
No matter how you slice it, next week will be yet another interesting one on the earnings front.
That’s all from me today.
Until next time…
Safe trading,
Matt Clark, CMSA®
Chief Research Analyst, Money & Markets