Every few months, Wall Street enters a frenzy.

Stocks make double-digit moves overnight.

Fortunes are made (and lost) in the blink of an eye.

A single earnings report can send a stock soaring 20% or crashing just as fast.

It’s a high-stakes game where expectations, surprises, and guidance collide – creating massive opportunities for investors who know where to look.

What Is Earnings Season?

Earnings season occurs four times a year – typically beginning a few weeks after the end of each quarter.

This is when publicly traded companies report their financial results, detailing revenue, earnings, profit margins, and future outlooks.

Investors eagerly anticipate these reports because they provide critical insights into a company’s health and industry trends.

Earnings season matters because it’s one of the few times a year when traders get a reality check.

Hype and speculation dominate the stock market in between earnings reports, but when companies release actual numbers, the truth comes out.

Here’s why it’s such a big deal:

1. Volatility Creates Opportunity: Stocks don’t move in straight lines, and earnings season injects massive volatility into the market. A company that beats expectations can see its stock price skyrocket overnight, while a weak report can send shares into a nosedive.

2. Expectations vs. Reality: The market doesn’t just react to earnings – it reacts to expectations. A company might post solid results, but if Wall Street expected even better, the stock could still drop. Conversely, a company reporting mediocre earnings might still rally if investors feared worse. Understanding this dynamic is key to making money during earnings season.

3. Guidance Moves Markets: Earnings reports aren’t just about past performance. Companies provide forward guidance – forecasts for revenue, earnings, and business conditions. This guidance often has a bigger impact on stock prices than the actual earnings results. A company that beats earnings but lowers its future outlook can see its stock plummet, while a company with weak earnings but strong guidance can rally.

4. Sector Trends Are Revealed: Earnings season gives investors a real-time pulse on different industries. If multiple semiconductor companies report strong demand, it signals strength in the tech sector. If major retailers struggle, it might indicate consumer spending is slowing. These insights help traders position themselves for broader market trends.

My Top Insights From This Earnings Season

We’re currently in the middle of an earnings season right now.

Just this week, Amazon, Palantir, Alphabet, AMD, Uber Technologies, ARM Holdings, and Qualcomm reported earnings.

(Many other companies did, too. You can see the full calendar here.)

Here are my top insights so far:

1. DeepSeek: This Chinese startup shook the AI industry by claiming its model can match or outperform Western rivals at a fraction of the cost.

U.S. tech giants, including Microsoft, Alphabet, and Meta, responded by doubling down on AI spending – which is great news for Nvidia.

Going further, more holes are beginning to appear in DeepSeek’s original story. Reports indicate the company had access to billions of dollars of Nvidia GPUs.

2. Uber Technologies: Despite strong fundamentals and exceeding its three-year outlook for gross bookings and free cash flow, Uber’s stock tumbled 7% post-earnings.

The culprit? A slightly weaker-than-expected gross bookings forecast for Q1. (Guidance matters!)

The company believes this is a great buying opportunity for its stock, however. “We believe we remain undervalued despite these strong fundamentals, and plan to be active and opportunistic buyers of our stock,” said the company’s CFO.

3. AMD vs. Nvidia: AMD may still be taking market share from Intel in the central processing unit (CPU) side of things, but it remains a long way behind Nvidia when it comes to graphics processing units (GPU).

Although the company reported great growth in its data center segment, shares tumbled this week after the company failed to meet analysts' high expectations.

At least 22 analysts have cut their price targets on AMD, with the median now at $150, compared to $166.5 before the results.

Make no mistake, earnings seasons aren’t for the faint of heart.

Earnings season can be a rollercoaster, and fortunes can be made or lost in a matter of minutes.

The key is to stay informed, manage risk, and recognize that in the stock market, the facts always wins out in the end.