Earnings Season Just Started, Here's What To Expect - The Joseph Carlson Show

JPMorgan Chase (JPM)

The host views JPMorgan not as an "old stodgy bank" but as a tech-first company that is aggressively competing with fintech and major tech companies like Apple.
He highlights the company's strong historical performance, noting it is up 189% over the past five years, not including its "hefty dividends."
JPMorgan has a strong track record of beating earnings estimates, having only missed three times since 2020. The host does not expect them to miss this quarter.
The most important factor for JPM and other banks is credit quality—the ability of borrowers to pay back their loans.
While management has been cautious and increased allowances for credit losses due to macroeconomic uncertainty, the host believes they are being conservative and are "likely to come in more profitable and better than expected."

Sentiment: Bullish. The host believes the bank is well-run, technologically advanced, and likely to outperform expectations.
What to Watch: Pay close attention to management's commentary on credit quality and their outlook on loan performance. Any signs that credit performance is better than their conservative models would be a positive signal.
Insight: The market may be underappreciating JPMorgan's technological edge compared to newer fintech companies. The host's view is that the bank is positioned for the worst but will likely deliver better results.

The host is a shareholder, with a position of nearly $54,000, and describes ASML as a "dominant monopolistic company."
ASML is the sole producer of highly advanced EUV (extreme ultraviolet) lithography machines, which are essential for manufacturing the most advanced semiconductors.
The business has "lumpy" sales and cash flow, meaning revenue can be inconsistent from quarter to quarter. However, the host believes the underlying business is very predictable because customers have to buy their machines eventually.
The host expects ASML will likely beat on earnings per share (EPS) but could have a slight miss on revenue due to the lumpiness of its sales. He notes this pattern is not a cause for concern.
Key growth drivers are the continued build-out of Artificial Intelligence (AI) infrastructure and increased service demand for their installed machines.
The host is not concerned about potential tariffs threatened by President Trump, believing the market understands it's part of a negotiating tactic.
The company is using its significant cash flow to aggressively buy back shares, which is a positive for shareholders.

Sentiment: Very Bullish. The host is holding all his shares and sees ASML as a key long-term winner from the AI trend.
What to Watch:
- Commentary on EUV system sales and demand from AI-related customers.
- Management's outlook on the impact of potential tariffs.
- The pace of their share buyback program.
Insight: Don't be alarmed by a potential headline miss on revenue. The core investment thesis is based on the company's monopoly in a critical technology and its indispensable role in the AI revolution. The host believes the long-term story remains intact.

Similar to ASML, the host views TSM as one of the most "fundamentally strong companies in the world" and a critical bottleneck for producing the hardware needed for AI.
The company has shown incredible growth, with revenue up 40% and EPS up 52% over the past year.
The investment thesis is very similar to ASML: it is an indispensable company for the AI wave. While TSM has more competitors than ASML, the market is still highly concentrated.
The host expects a similar earnings outcome to ASML: a beat on EPS and a potential slight miss on revenue, which he states is "not a problem."

Sentiment: Very Bullish. The host believes the best days are not behind TSM and that investors should not bet against the AI wave that TSM facilitates.
What to Watch:
- Updates on AI-related demand and capital expenditure plans.
- Any commentary on geopolitical risks and tariff impacts.
Insight: TSM is presented as a core holding for exposure to the AI hardware build-out. Its financial strength and market position make it a company that will "continue to live up to the hype."

This is the host's largest and best-performing position, valued at $146,000. He has been consistently bullish on the stock since it traded at $316 per share.
Despite the stock's massive run-up to nearly $1,300 per share, the host believes Netflix is still not fully valued and has more upside.
The core thesis is based on management's goal to double revenue and triple operating profit over the next five years. If successful, this could lead to a $1 trillion market cap around 2030-2031, roughly a double from its current valuation.
The host warns that the stock is highly volatile and could easily drop 7-10% on any sign of weakness in its earnings report. However, a strong report could also see a 7% gain.
He believes a massive drop like the one in the past is unlikely because the company is now valued on financial metrics like free cash flow and operating margins, not just subscriber growth.
The ad-supported tier is a key focus, as it is highly profitable for Netflix. An ad-tier user can generate more revenue ($18/month) for Netflix than some users on higher-priced, ad-free plans.

Sentiment: Extremely Bullish. The host is holding every share and believes the long-term prize is "massive."
What to Watch:
- Commentary on the growth and profitability of the ad-tier.
- Year-over-year growth in operating margins. The host wants to see at least 2-3% growth.
- Updates on the content slate and engagement trends.
Insight: Investors should focus on the long-term business trajectory rather than being scared off by the high stock price or potential short-term volatility. The host sees Netflix as a one-of-a-kind business that has won the streaming wars and is now focused on monetization and profitability.

The host describes American Express as the "Apple of a credit card" due to its integrated ecosystem and focus on high-end clients.
While he personally chose to invest in MasterCard (MA) for its "pure play" network effect, he still considers AXP a "really good company."
He expects the company to report good earnings and is not concerned about weakness, as its affluent customer base is more resilient during economic uncertainty compared to lower-end consumers.

Sentiment: Bullish. The host sees little reason for concern.
What to Watch: The performance of other banks reporting earlier in the week (like JPMorgan) will provide a good preview of the consumer spending environment for AXP.
Insight: American Express is positioned as a stable investment due to its focus on a wealthy customer demographic, which should provide downside protection.

The host highlights GE as an "astounding investment," with its stock up 631% over the past five years.
He attributes its success to a business moat similar to ASML's: creating unique, highly advanced products (like jet engines) that are difficult for others to replicate.
The host admits he missed this investment because it was "so far out of my wheelhouse."

Sentiment: Retrospectively Bullish. He congratulates investors who saw the opportunity.
Insight: This serves as an example of how companies with deep, technological moats in seemingly "old-economy" sectors can produce incredible returns. It reinforces the theme of investing in companies with unique, hard-to-replicate products or technology.