Watch Our Recap: Earnings from AMD, Palantir, Shopify, McDonalds, Disney, Uber, and More

Welcome everybody to our Earnings Watch for May 8th, 2026. Another exciting week for the S&P 500. A lot of very exciting earnings reports, strong earnings reports. Things are looking very bullish. It looks like the market is not letting anything get in its way. Kyle and I were just talking about some recent S&P 500 performance. The market's up over 10% in a month. A 1-month stretch of 10% plus in the S&P 500 is a torrid pace. So exciting times. Not all stocks are benefiting, though. We'll get into that. And with that segue, I will pass the baton over to Kyle to get us warmed up here before we hit the earnings watch.

Yeah. And with that lead-in, it's perfect for the quote. In this market, it's not just about beating estimates. We'll talk about why today. This is our monthly podcast, and we're also going to combine an earnings watch party with it. So I'm calling this one, Is Earnings Season Meeting Expectations? Because again, it's not good enough to just beat estimates. You got to do more because the market's trading at all-time highs. Investors are expecting a lot from these companies based on what's baked into their current stock prices. Kick it off with the disclosures and disclaimers. And we are providing research, not advice. You can read the full length of these in the replay. But on the agenda for today, this is, like I said, our monthly podcast. We're going to combine some earnings watch party with it. But our next podcast is June 12th. If you register for this one, you've also registered for that one as well. So you'll get notification emails as we get closer to that. On our latest research front, we put out a ton of stuff since we last talked last month. New long ideas, new danger zones, some sector and style ratings reports on each individual sector, each individual style, the best and worst ETFs and mutual funds. A lot of talk about AI and earnings as well. And then a few different posts on some presentations that David has made. He's been traveling around to Harvard Business School, Kellogg School of Management, talking to some Financial Planning Association members here in Middle Tennessee. So a lot of posts on that with his presentations, insights that we've got going on there. But the agenda for today will be, we're going to talk a little bit about FinSights, get into the earnings watch party, and then if time, we've got some questions. So if you do have any questions, get them into the chat or Q&A right now. And with that, we'll get going right into the FinSights showcase. Now we had some exciting news and I guess replays on FinSights and the underlying technology at the Google Cloud Next sessions in Las Vegas this past week or 2 weeks ago maybe at this point. You can see there the FinSights presentation. It was named Financial Insights and Analysis Using AI Agents. Google Cloud chose us to build FinSights. Because of our accurate financial research, can deliver alpha in the stock market. So the team, some of the team members that helped put together FinSites presented at Google Cloud Next in Vegas. And they said afterwards, Ashwin was one of the guys that we worked directly with, data without actions as well, just data. Special thanks to the design partnership, David and team. So we're happy to see the presentation go on. Took away some key takeaways from the session. I'll send the link to the replay here. In just a moment. But some of those key takeaways being financial analysis is moving beyond LLMs to small language models or SLMs. Finsights itself drives real intelligence. The integrity of that data matters significantly. We've talked a lot about that, but anyone who's been on some of our podcasts or earnings watch parties, the integrity of data is almost more important than what's going on behind the scenes. You've got to have accurate data because that accurate data drives alpha. And without combining all of that together, You've got a system that might get things right half the time, might get it 90% of the time, but if you're not putting accurate data in, you can't drive that alpha at the end because of the insights that Finsights is able to provide.

So that's why Google chose us. They haven't done this with anyone else. They haven't built a prototype for any, anything else. So I think it's, it's a big deal that they chose us as additional validation. We, as one of our partners has said, we're the most credible or credentialed client that she'd ever had. She was a marketing partner. And so Google, it's a big deal. And Kyle's right. And the real problem with this, and I'll challenge you on this, and maybe we talked about this in a prior podcast, if y'all missed our podcast on why AI lies, I ask each and every one of you, go in and ask any of the, any of them, any of the frontier models, why does AI lie so much? And you'll get some great answers, some illuminating answers. Sorry to interrupt, Kyle.

Nope, all good. For anyone that didn't see that, I'll share that in the chat as well. But without further ado, we'll get into the earnings watch party. We've got a bunch of companies, big companies, names that moved the market reporting this past week, and we've got some key takeaways, one of them being the AI trade is working again. You mentioned AI. Your stock so far seems to be going up this quarter. And then I know David and I were talking, a surprise winner being Caterpillar in the past couple weeks. I think we actually might've covered them in an Earnings Watch 2 weeks ago. They've been the surprise winner of earnings season so far. And a surprise loser being Snap, losing a deal with Perplexity, laying off a workforce. And in this case, laying off the workforce did not— was not seen as a good thing, whereas a lot of the AI companies laying off is seen as a positive. They can save some cash flow and move that into AI. But Not the case here with Snap.

Yeah, I think Caterpillar's a great picks and shovels play for AI that maybe not everybody was talking about. And it's one that we were positive on a long time ago. It's been expensive for a while. I pointed it out as one of those, I think, smarter meme stocks. I think a long time ago, I'm like, hey, this is a big diversified global player. If I'm a Bored Ape instead of some kind of junk company, maybe I'll put it into Caterpillar or Berkshire Hathaway. But yeah, I think Caterpillar is interesting. It's very interesting AI play. And by the way, one that doesn't have a bunch of revenue deals or off-balance sheet debt stuff.

It's—

there's no— I think there's no bugaboos there with Caterpillar. And then Snap is a longtime danger zone stock that's— the business model keeps sucking, and we don't expect that to change. All right, are we in— are we ready for the big play here?

Yeah, I would say, I think I'm gonna turn it over. You can share your screen if you've got these tickers loaded up.

Yeah, the biggest company on the list this week is, biggest market cap is Advanced Micro Devices, up 22% this week. I think, you know, that they've got, they had a great report. As semiconductor chips in general have been really strong this earnings season and really strong performers in general, back to the same old theme that these guys are like important feedstock for all AI. And so it did extremely well. We've got it as dangerous over here on the side. It's expensive. And let's see, we already parsed the new 10-Q and it looks like the earnings are a little bit overstated here. So we saw a pretty big divergence and I wonder how long that will last. Look, companies know how to make hay when the sun shines. So when the numbers and the markets are positive, companies will do what they can to overstate that and take advantage of it because they'll get a multiplier effect on it. And the same is true when things are negative. Throw in all the bad news, knock earnings down, knock the stock price down, issue some options, and then take advantage on the way up. So, they like to amplify the ups and downs because they're insiders and they know what's going on. But the core earnings distortion score, or the GAAP earnings distortion score here is not good. And this is an expensive stock, folks. I think the economics of the business are probably going to get stronger in this environment? I would imagine so. But the valuation is really— yeah, this— I think things are probably fine on the underlying economics of the business, but valuation is— yeah, it's getting pretty absurdly high. I think we ran a— if we ran a reverse DCF model on that, we'd be getting— we'd be looking at some pretty nutty stuff. Oh yeah, speaking of nutty, we did a reverse DCF on Palantir recently. Uh, I think I was on BBC to talk about this And what we found and the reason Palantir went down— let's see, how did it do for the rest of the week here?

I think it kept moving lower.

Okay, so if we compare this to AMD, quite a divergence. Both really expensive stocks, and interesting that one would just keep going up. It's— that's just the fickleness of the market, folks, and that's why we don't That's why we're not fickle. We stay where we are. We let the market do its thing. We stay true to understanding profitability, valuation, and what I'm seeing. And what we saw with Palantir was a great business, super expensive stock. You can see actually it's quite a bit more expensive than a 75.3 price-to-economic-book value is absolutely crazy. We don't see that very often. 20 is high, right? And if you look at the rating system, anything above 3.5 is going to get you the most dangerous, the very dangerous rating level. Yeah, nutty. And it's so nutty that despite a beat on the top and bottom line, the stock went down. And we just did a quick reverse DCF model. And I said, look, let's assume margins stay the same. Let's assume returns on capital stay the same. And what kind of revenue growth does the company have to do to justify $146 a share? It's down to $135 now. But before, I think on the closing price the day before they reported, To justify that, the company was going to have to maintain margins and grow revenue at 100% compounded annually for 5 years in a row. And by the way, they didn't quite get them to $146, but the year 6 in the model was so much higher. Anyway, I think that's too much detail, but the takeaway, $146 a share implies 100% CAGR in revenue growth for 5 years. Pretty high. All right. So, you say, yeah, that's ridiculous. What if we knock it down a little bit? You got to do 55% for 10 years. Those are wild numbers. And if we look at the Palantir model, which I have open here, just so happen to have open, optimistic, neutral, right? And here's what happens optimistic when you keep it going for that long. But when you go and then look at revenue and things like that, like just the skyrocketing effect, like even if we just do The five years. Look at this. This is like revenue. Revenue is like barely offline, and that's what 100% CAGR in five years means. And same is true for NOPAT. It's like. So when expectations are already that high, you got to do more than just beat on the top and bottom line. And here's the thing: I don't think most people know, and this is what makes this meeting very special and what gives our clients an edge—is that everyone talking about expectations. All they're looking at is that next quarterly number, maybe the next annual number if you're lucky. That's the limit of their expectations. Our expectations analysis takes into account the corporate life of the company, the whole life from now until forevermore, or whatever the market price implies. Market prices have expectations for the present value future cash flows over the life of the company. Our systems quantify that. We bring it out, we flush it out, we make it clear. And that's a completely different level of expectations, far beyond what you're getting anywhere else, which is why in our rating system, this market implied growth appreciation period, which measures the number of years of profit growth baked into the current stock price, that's why this number is, of all the elements of our rating system, comes out on top as the most influential, most tied to stock prices. So, it's a Pretty interesting dynamic there. Pretty interesting dynamic and a good example of where our data really helps out. Focusless Long. Let's see, what did Shell do this week? Believe Shell's down 6%. I thought they had a killer report. Let's just go with Shell only. Down this 5%. Yeah, I thought they, they did a great— they had a great tops estimates. Cut share buybacks. Okay. All right. We still like Shell. This thing's making a lot of money. It's not sexy, but it's still on our focus list. They are digesting a large acquisition, which is why we suspended the rating. By the way, this is our— this is a view of our professional membership. So you get all the bells and whistles. You'll see why there's a suspension. If you want to know more about suspension because you don't get this level of detail, Click on this if you're a Discovery Insights or Stock Tracker member. But yeah, Shell, great economics, super powerfully profitable business, still cheap. We're not worried about this. This is going to remain a core holding for us, even though it had a bad week. Surprised by that. I remember getting that news late at night, right before I went to sleep, and I went to sleep with a smile and I thought, this one's going to turn out really well. I was wrong.

I think some of that's the short-term noise. If you go back and look at the rating history, you can see how well it's performed longer term.

There we go. Yeah, so this has been a good pick for us, and we'll look at this chart again later for another stock that did really well, and you'll see when the stocks are cheap and the price goes up, can't stay that way forever. Thank you, Kyle. Better to take a victory lap on this instead of just talk about me crying myself to sleep. Arm. All right. This is another example, I believe, of good company, bad stock. I'm guessing probably had a— yeah, had a great week, up 5%. Good company, expensive stock, 31.4. Yeah, this one I remember when it came out for the IPO, we were like, this is— we put this on the shortlist, on the focus list short because it was just crazy expensive. Something probably we should revisit just because being in the semiconductor business, this nothing's gonna immediate it's happening here. Yeah. Let's look at our rating history on this one. Been dangerous all the way and likely to get more dangerous. And who knows at this point? We we're probably no reason to take this off the list at this point when valuation is really probably near peak. And look, everybody everybody's a little bit wary about how expensive things are these days. But yeah, strong miss. Here's the accounting earnings above core earnings. The gap got a little bit better, a little bit closer. We still haven't got the new filing yet, so the new filing should be any day now. May 10th, that'll be— that's what, Sunday? Be interesting to see. I'm guessing the economics of the business are probably doing pretty well. Semiconductor business, good business to be in these days. McDonald's, this is one of my favorite stocks. I guess we're getting the Q Right as we speak now. This has always been one of my favorite stocks because we added a long idea a long time ago. Kyle, you looked it up. How long ago is it that we had this as a long idea?

I think this was in 2011 or 2012 originally, I think.

Yeah, but it was one of, one of the better long idea reports we've ever written. The stock has done extremely well, I believe, since then. This week, not so much. I think they had a good earnings report too. But they did point out that consumer spending could be getting a little worse. I've heard that in a couple of places. Somebody called it the cardboard box indicator. I saw someone talk about how appliance sales were pretty down. And interesting situation here. The report we wrote on McDonald's a long time ago was great just because the stock was cheap, the profitability was good, and it was greens all across here on the rating. And we just pointed out how They had demonstrated an ability to consistently raise return on capital. And you just saw this just flat, just not super high like a tech company, but just up and to the right. I'm guessing that's still the same. Look, just look at it. It's just— and the thing that makes this so impressive is that Burger King, Wendy's, all these other people, Sonic, whoever they are, they're constantly running promotions to try and win customers and hurt McDonald's business. And And they go cash flow negative during those promotions. They just throw the kitchen sink at it. All right, we got to get business. And so, they'll sell stuff at a loss. So, people, these other firms are throwing loss leader promotions at McDonald's all the time and it just bounces off like kryptonite. So, yeah, the McDonald's business model just overall consistently just crushing it, just crushing, just people throw themselves against the wall. Don Quixote on McDonald's and it just keeps doing well. And so we're not surprised to have seen this stock perform as well as it has. Let's see how long we've been, we've been in this thing, you know, boom. But I think these are the times. What did you say, Kyle, when we wrote that report?

It was originally 2012, but we've rewritten on it since then, 2018, 2022. So it's been one we've reiterated a few times.

Yeah. And then we closed it a while ago. But yeah, I guess this thing only goes back 15 years or something. I don't know. I didn't know we had a limit on this chart. All right, that's McDonald's. Disney. What's going on with Disney? I wonder if we mistimed this one too. Okay, because didn't we close this recently?

Yes.

Yeah, Disney up 6%. I think the streaming revenue part of Disney is doing really well. And you got a new CEO. A little bit surprising given sort of the oil situation, the travel situation, that's going to hurt the parks a lot. But yeah, stock rises even though the park traffic dipped. I would say they got the park guy in charge now. So I don't know, Disney, to me, we were bullish on it for so long and we finally just gave up because they really weren't turning things around. And looks like maybe we gave up at the wrong time because I think we closed that pretty recently, Kyle, or no?

We closed it at the end of 2025 around $110, $111 a share.

All right. So yeah, we're doing fine. You got to interrupt me when I say stuff like that. Hey, by the way, anyway, so yeah, but it's a great machine. It's a great machine. And, but the problem is like when it was mismanaged for so long, it's come on, man, when are you going to get this thing going again? We think it's amazing. One of the things we said about Disney we thought was a huge advantage was that they have shown an ability to produce high-quality original content consistently over a long period of time. And I think that was pretty special. But I think what we've entered into now is a world where other firms have gotten good at it too. Netflix stuff is pretty good, man. I just started watching a new series this week. I almost never get to watch TV. And we just tried something. And I think it was on Netflix and I was like, dang, this is good. It was good outta nowhere. Free on Netflix. Damn, it was good. Man on Fire is knockoff of the Denzel stuff. And I was like, this is gonna be terrible. And my wife and I were like, dang, that was good. It was great. Not too violent. Not a bunch of gross, super dumb stuff. And a good, and great dialogue. Unbelievable. Maybe Netflix didn't even make it. I don't know. All right. Good company, bad stock. Got the new Q this week. Continues to have great economics. And but here's— this is a bad stock at 4.5. Remember, these other guys are like 23.5 and 75, 20, 21.3, 31.4, 75.3. This is Paul Turdy Jones talking about internet bubble type valuations. And that's why, that's why there's some really expensive stocks. Arista, expensive. Down 22% this week. Ho ho! So what happened? These guys take the opportunity to buy. Earnings call is plunging despite a Q1 beat and raise. Wow. It also had a 41% jump in April, so maybe it just wasn't good enough because it was again an expensive stock. So look at that. Yeah, you had a huge jump and a fall. Maybe people just weren't happy with the beat because it had already run up so much. I wonder what, how, I wonder what the price-to-earnings book value got to. We don't have a real-time price-to-earnings book value, do we, Kyle? So we couldn't, it'd be hard to see what it was at its peak, right? Because we're just—

Yeah, it would just be point in time to the end of last year.

We're just getting this, but I'm guessing if we looked at it a few weeks ago, it's probably up. This chart's even steeper, right? And we're looking at a P/E/B/V of 8 or 9. I don't know. But yeah, that's a pretty big drop. Pretty big drop. But that's the risk you take when you get into these expensive stocks. The bigger they are, the harder they fall. Uber. So this has become a good company. Still expensive stock in our opinion. I think these guys had a disappointing quarter. Yeah. Interesting competition from Instacart. Our thesis remains negative on Uber. We think this is a business that's a commodity. It's going to be difficult for them to take share and look, or to really make money. And we're still, yeah, with this, we don't think this is a long-term profitable business. The robotaxi thing is just going to, especially if it's Waymo, what does that do to Uber? And all those other delivery services, I think, yeah, I just, I don't see it. Don't see it, folks. It has become profitable in a way that we didn't anticipate. It's still expensive. They are winning, I think, the war in terms of versus Lyft, because Lyft is another company we were also negative on and we, that, that pick has turned out pretty well. But yeah, this is on our focus list short model portfolio. Strong miss. Not as bad as it was. Core earnings going up. It's a pretty big amount of distortion, 18.7%. Even though it looks small here on the scale, it's a big number. 19% of earnings and 2.7% of total assets. The reason we have this many decimal points in there. We don't like that normally, but we have to because so many companies are 0.00 something. So in order to be sure we could show statistically significant or visually significant information, we had to push out to 5 decimals on that. All right, Shopify. It's one of my expensive stocks, favorite expensive stocks to hate, because again, I think they're making— it's a good business, but Expensive, super expensive valuation for online shopping materials, right? That Amazon can do, that everybody can do. And think about AI can build it for you. This stuff has been a commodity for a long time. Give me a basket and a checkout and I don't know, you tell me. Somebody throw it in and get— anybody got any different ideas why this business has zero— has any kind of moat whatsoever? I don't see it. And I think you saw What, how do they do? Yeah, a beat and rise and 14% drop because what, weak business model and expensive valuation, not going to hold up. All right. That's all we got on our list. I'm going to take a second to talk about Steel Dynamics because we had a question from one of our favorite clients about Steel Dynamics and some of its ratings change. And really what happened here is stock went up, folks. It went up. And when stocks go up a lot, even if the economics of the business are good, they get expensive and they are no longer attractive. And that's what's happened here with Steel Dynamics. Suspended because of a large acquisition. We just got the latest Q and updated the forecast the end of April. Focusless long. It's been a great performer for us. And I'll take one quick question here.

Whoops.

And then I'm going to jump and let Kyle finish this up. Adobe. So this stock, this is a surprise. Kyle, has Adobe been— it's the most attractive stocks model portfolio, very attractive.

Yeah, yeah, I believe they've had a big turnaround in rating in the past couple years.

Yeah, this has been an expensive, not looking stock for a long time. Looks good now. Yeah, interesting, very interesting. And model most attractive stocks, so This is a good call. Good question, Ken. All right, folks, Kyle's going to take us across the finish line. We're— I think you got a couple other slides to go here, Kyle. We're going to be here next week for an earnings watch.

I say let's do it.

Let's do it.

Awesome. We'll take it home here. Thank you guys for being with us. I wanted to talk a little bit about the posts on our community and trade ideas. We've had a lot of different posts going out since we last talked. Volatility discussions, some ideas on Nokia. That was one that we actually— our system identified well before it's had a good rise here. We shared our AI's Designed to Lie to You report and blog or podcast. David shared an interview from the Google Cloud CEO on some AI and hyperscalers. A lot of discussion going on there. And then we've also had a lot of different trade discussions, some options discussions, potential opportunities, trade strategies. And so if you're not on the community, you can join that by going to newconstructs.com/society. We also post all of our replays in the society. So if you're not already there, we would encourage you to go check it out. There's a lot of stuff going on, a lot of different ways to interact with other New Constructs members, like-minded investors, get some new topics, new perspectives as well. But that's all we've got for today. I want to thank you guys again for being here. Our next one, like I mentioned at the top, will be June 12th of this specific live podcast, but we'll be doing some different earnings watch parties between now and then. So look for emails on that in your inbox. I will send out some registration links as we've got them. But otherwise, I want to thank you guys. And again, look for the replay coming out in our community, and we'll see you guys next time.