7.10.26
Magnificent 7: Still Lagging, But AI Leadership Remains Intact
The Mag 7 basket continues to be one of the weaker areas of the market in terms of relative strength, with the clear exceptions of Apple, Alphabet, and Nvidia. Tesla is attempting to make a comeback, and I’m betting it will do so when Optimus is launched and people finally understand what it’s capable of. A meaningful breakout is still possible once Optimus moves from the prototype/demo stage into actual production and revenue contribution.
The enormous AI-related capex cycle has created choppy, inconsistent price action — I’m simply not seeing the clean pre-earnings ramps or post-earnings continuation moves that defined the group in prior years. Despite the near-term frustration, these companies remain the undisputed leaders in the AI buildout. I continue to hold core long-term positions, and I am not actively trading most of them because they lack the consistent patterns required for trading, with the exception of semiconductors.
NVIDIA, for example, is currently breaking out to the upside, and this will likely continue to drive further upside in SMH stocks, especially with many semiconductor tickers sitting in bullish patterns ahead of earnings. SMH has always been my preferred vehicle for exposure to semiconductors, and I’m always hunting for my favorite names within that ETF.
Semiconductors (SMH): Clear Relative Strength Leader
Semiconductors are currently the strongest relative strength group in the market. NVDA breaking out is foreshadowing the next move…
Two major upcoming reports should act as catalysts for the group:
- ASML reports Wednesday
- TSM reports Thursday
These prints are expected to reignite momentum across the semis!
Current favorite buy zones (on pullbacks):
- NVDA
- LRCX
- MU (buying the post-earnings digestion has historically been the higher-probability entry)
- SNDK
- AMAT
- MRVL
INTC remains the most questionable name in the group at current levels. I continue to favor SMH as the cleanest way to express bullish semiconductor views without having to pick individual winners around earnings, and I have a nice, clean price target at $700. This provides substantial upside, despite the strong move that semis have already had. This is largely due to the pullback we got throughout June.
Options Earnings Calendar – Week of July 13–17, 2026
Next week features several high-conviction catalysts. Here’s the visual overview:
Key dates to watch:
- Tuesday (July 14): Heavy bank earnings day — JPM, BAC, GS, WFC, C, and others. Also monitor any Fed speakers for policy tone.
- Wednesday (July 15): ASML (major semi catalyst)
- Thursday (July 16): TSM + NFLX (two of the biggest potential market movers of the week)
- Friday (July 17): Lighter day but still several financial names reporting.
Biggest potential market movers next week: The major banks on Tuesday, ASML on Wednesday, TSM on Thursday, and Netflix on Thursday
Bottom line:
Stay patient with core Mag 7 holdings. Use strength in SMH for tactical exposure. Prepare for volatility around the bank reports and the two key semi prints mid-week.
Trade smart and have a great weekend.
