Positioning your Portfolio into Mega-Cap Earnings 7/21/26

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**Scott Wapner** (1:00)
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.

**Leslie Picker** (1:15)
Thank you, Carl, and welcome to the Halftime Report, everybody. I'm Leslie Picker, in for Scott Wapner today, the Investment Committee making some key trades as stocks bounce following a three-day slide. Joining me now for the hour to break down the moves, Joe Terranova, Jason Snipes, Stephanie Link, and Josh Brown. Let's get a quick check on the market. The three major indexes near session highs right now, the Dow up about 0.7%, the S&P up about 0.8, and the NASDAQ, the leader here, up about 1.2%.
Thanks in large part to the AI infrastructure trade, getting a pretty significant bounce today. And I want to start with Stephanie, who's made some key trades in this space recently. Steph, you tweaked your semi-exposure. What brought you into the fold here?

**Stephanie Link** (1:59)
Yeah, sure. So I sold Marvell because I was up over 100%.
Same like I did with Teradyne. I think you take profits when you can take them. And then I added Micron because the stock is down about 24% from its highs, and the fundamentals remain amazingly strong. We all know that, I think it's going to be stronger for longer. When I went through the quarter and I've been going through the quarter report over the last couple of weeks, and they've signed 16 deals last quarter, 14 of which it gives them $100 billion in RPO, and that's bookings. And I think that that means that the visibility is just so much better as a result. And so I do think the AI trade is certainly not over. I think we're in the third or fourth inning at this point in time, and we are short memory. We are short compute. And that gives this company a lot of pricing power. I don't know if we're going to see the pricing power that we saw last quarter. I mean, they had 60% average selling prices in DRAM and 80% in NAND, but I do think you're going to see ASPs be stronger and just strong in general. And I think this company has about $40 a share in earnings power through the cycle. I also added to NVIDIA, we started buying that two weeks ago. I just believe that it's lagged so much. It's actually underperformed the group by 53% year to date. It trades at 18 times forward estimates. That's the cheapest it's traded at since 2019
And we know that they dominate the GPU market. I understand there's competition coming, but they will always dominate the GPU market in my mind. And they have new products coming. And this is a company that's growing revenues in the 80s, gross margins in the 70s, and they want to double their free cash flow between now and next year, end of next year. And so I like that visibility as well. And I think there's a good value there.

**Leslie Picker** (3:50)
Yeah, I saw this interesting stat from Opco this morning, guys, with Micron and NVIDIA are the top two contributors to year over year earnings growth for the S&P and Q2. If these two companies were excluded, according to Opco, the blended earnings growth rate of the S&P for Q2 would fall to 16.8% from 24.7%.
That's a 790 basis point improvement.
Joe, I know you own these two as well. Are these must owns just given their impact to earnings growth in Q2?

**Joe Terranova** (4:22)
Well, look, I think if you have not owned them, the right perspective to take is you now have a pullback into what is technical support.