Alphabet and Tesla report earnings next week. The headline says this will tell us where semiconductors go next. It won't.
The semis will go wherever they were already going. Alphabet sells ads. Tesla sells cars that sometimes drive themselves into parked fire trucks. Neither company manufactures semiconductors. Calling this a test for chip stocks is like calling a colonoscopy a test for your dentist.
But retail traders need a narrative. They need to believe next Tuesday's conference call will unlock the secret pattern. They'll watch Sundar Pichai read from a script about AI investment and cloud growth. They'll hear Elon cough into the microphone and call someone a pedo. Then they'll check their semiconductor ETF and pretend causation exists.
The phrase "strong start to earnings season" deserves its own paragraph. Strong compared to what? Last quarter's lowered expectations? The imaginary forecast some analyst pulled from his a**? Earnings season is not a football game. There's no score. There's no winner. It's just a parade of CEOs explaining why the numbers you're looking at don't mean what you think they mean.
Here's what actually happens next week. Two companies report revenue and profit. Analysts compare those numbers to other numbers they made up three months ago. If the real numbers are bigger, the stock goes up. If the real numbers are smaller, the stock also goes up because the guidance was encouraging. If the stock goes down, it's because of macro concerns. The semiconductors do whatever they were going to do anyway because they're not actually connected to this circus.
Your portfolio tracks a crystal ball that doesn't exist. Next week you'll learn that Alphabet printed money and Tesla printed cars, and you'll still be refreshing your brokerage app at 3:58 PM wondering why knowing this didn't make you rich.
Photo by Mark Stuckey on Unsplash
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