Hi Traders!
The Nasdaq is still stuck below the 50 SMA on the futures daily chart, and that makes this week’s earnings especially important. Multiple semiconductor companies are reporting, and between those results and Netflix, Tesla, and SpaceX, I expect earnings to have a meaningful impact on the Nasdaq, though my views are mixed as the companies vary widely. As such, it’s not a clean shot for more Nasdaq upside, though as an earnings bull, that is what I would love to see.
SpaceX
SpaceX just posted numbers, and I’m very happy with the results. The EPS estimate was $0.11, and they posted the first profitable quarter as a publicly traded company at $0.35 per share. While the stock is only up $3 after hours so far, I imagine this number will prompt post-earnings buying. Read my full SPCX pre-earnings analysis here. However, SpaceX won’t lift the Nasdaq alone.
After the numbers posted, it’s clear to me that my AI thesis just got confirmed by the numbers. AI is now SpaceX’s biggest business, bigger than Starlink. SpaceX’s AI segment posted $7.56B, up 830% from a year ago. That is an insane level of growth. It’s now bigger than Starlink’s $5.25B, and it turned an operating profit for the first time ($431M). It went from about a third of revenue in Q2 to more than half. This is a Neocloud, and now it’s profitable, with room for exponential growth. The AI segment swung from a $1.26B operating loss to a $431M profit in one quarter. So far, the move is inside the projected range, but I imagine buyers will come in tomorrow.
Magnificent 7
While SpaceX posted phenomenal numbers, I’m not so sure the rest of the slate will do the same this week. Ideally, the Nasdaq impact of earnings this week would be to the upside, but I’m not holding my breath. It’s possible that Meta lifts the Nasdaq into Thursday, but 3 of the past 4 earnings reports have sent the stock lower. While the recent rally was phenomenal, that only sets expectations higher going into earnings. Netflix is already continuing its Earnings Destruction pattern, and is down again post-earnings.
The companies I’m more bullish on report next week, including Microsoft and Amazon. I’ll be watching for a catalyst that can push the Nasdaq above resistance, while keeping my expectations measured for this week’s reports.
My focus is on the Nasdaq’s technical picture, the chip stocks underneath it, and how the earnings reactions fit together. This is also a great time to pull up my Five Star Market Map and see how individual stocks connect to the bigger picture.
The 50 SMA Is the Breakout Trigger
In last Thursday’s update, I highlighted the 50 SMA on the Nasdaq futures daily chart. That was the area I was watching for a potential buy-the-dip opportunity.
The Nasdaq is now stuck below the 50 SMA, making that zone resistance. Any catalyst that drives a breakout above this zone would be a buy signal for me.
Earnings could provide that catalyst, but I’m open to any development that gets price back above the 50 SMA. That breakout is the trigger I’m watching.
Can the Semiconductor Leaders Come Back?
SMH is one of the first charts I watch, as it is always a leading indicator of potential Nasdaq upside. This is followed by NVDA, MU, SNDK, and LRCX. Recent selling has put the group under pressure, and Monday saw a rebound in chip stocks. Now I’m looking for evidence that the recovery can continue.
For NVDA, I want to see whether strength can build into the pre-earnings momentum window I discussed last week. For MU and SNDK, I’m watching whether buyers can repair the damage around broken support. LRCX has the more immediate catalyst: its quarterly earnings call is tomorrow, Wednesday, October 21, at 5 p.m. ET. Lam Research’s announcement.
LRCX is one of several semiconductor companies reporting this week. Texas Instruments (TXN) also has its earnings call on Wednesday, October 21. Add Netflix, SpaceX, and Tesla to the calendar, and there are multiple reports that could shape technology sentiment and the Nasdaq’s next move.
LRCX split its last four reactions evenly between two gaps up and two gaps down. The first three were relatively small, ranging from −2.3% to +2.5%. Then July delivered a 26.1% gap up.
A constructive LRCX reaction could help bring buyers back into the group. While I’m bullish and own the stock, my issue is that last quarter it gapped up 26% post-earnings and couldn’t follow through. The problem with this is that it sets expectations very high and could lead to an MU-like situation where expectations are through the roof, resulting in the stock falling post-earnings.
I hope I’m wrong about that, and they can still perform, and we can see a post-earnings rally, strengthening SMH and the Nasdaq.
Either way, chips are the leading indicator, and with NVDA, AMD, and AVGO reporting later in the season, these are my top ideas to buy on a bullish breakout above the 50 SMA on the daily chart of the Nasdaq, but I have not pulled the trigger yet. to other chip names and helps the Nasdaq break above its 50 SMA. That is the bullish outcome I’d like to see, but I’m keeping the distinction between a possible catalyst and a breakout that has actually happened.
See the Connections in My Five Star Market Map
When you look at the Nasdaq and the semiconductor sector together, it helps to know which companies are inside the funds. That is why I built the free Five Star Market Map.
Start with QQQ to explore the Nasdaq-100 holdings, then look at SMH for semiconductors and DRAM for memory and storage exposure. You can switch between visual charts and the searchable holdings list to compare where the same companies appear.
For example, in the map’s June 30, 2026 snapshot, NVDA represented about 7.60% of QQQ and 17.55% of SMH. The same stock can have a very different influence depending on the fund you are watching.
These are historical holdings snapshots. I use them to understand concentration and overlap, then turn to current price charts to evaluate the setup.
Explore My Five Star Market Map →
TSLA: Three Gaps Down in Four Reports
Tesla reports earnings after the close tomorrow, Wednesday, October 21. Alongside LRCX, it is part of the broader earnings calendar that could move the Nasdaq in either direction. Tesla’s earnings schedule.
While not a chip name, I would be remiss to fail to discuss Tesla, as this company will definitely have an impact tomorrow. However, while I love the company and own shares, the stock has been stagnant since reaching an all-time high, as it has lacked a major catalyst. The post-earnings moves reflect a lack of excitement, and while I like the company long-term, I can’t say this quarter in particular will result in any phenomenal moves unless there is some surprise I’m not anticipating. For me, Tesla is all about the long-term play, and I’ll accept the short-term disappointment.
That disappointment has come in the form of negative post-earnings gaps. Tesla gapped lower after three of its last four reports. The only positive gap in that stretch was January’s 1.5% move, while July’s 8.8% gap down was the largest reaction in either direction.
That history is part of my preparation for tomorrow. If TSLA gaps higher, I want to see whether buyers can hold the move and establish a change in that recent pattern, and there is nothing more I would love to see. However, if it gaps lower again, that will be par for the course until a major fundamental shift occurs, like with the Optimus robots launch.
The Earnings Hot Zone demonstrates all kinds of red on the Tesla chart. But don’t worry, at some point Tesla will be back to its former glory.
Before an earnings trade, I want to review the stock’s previous reactions, the current chart, and the expected move. My Earnings Hot Zone: Five Star Edition brings historical earnings behavior, Five Star statistics, and expected-move references onto thinkorswim charts so I can work through that process.
What I’m Watching Next
Between the semiconductor reports, Netflix, Tesla, and SpaceX, this week’s earnings should have an impact on the Nasdaq. I’d love to see that push the index higher, but the companies I’m more bullish on report next week. For now, the Nasdaq remains below the 50 SMA, and a catalyst-driven breakout above that zone is still the buy signal I’m waiting for.
Trade Earnings With Me Tomorrow at the Close
I’ll be in Simpler Trading’s Mastering the Trade room tomorrow, Wednesday, October 21, at the market close at 3 p.m. ET / 12 p.m. PT to trade these earnings reports live.
We’ll have TSLA and LRCX on the radar as I walk through the setups, my earnings approach, and the Nasdaq breakout trigger I’m watching. Come join me in the room!
— Danielle
