Navigating earnings risk in megacap tech, and a buying opportunity in this industrial name

CNBC

21-07-2025

(This is a wrap-up of the key money moving discussions on CNBC's "Worldwide Exchange" exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Investors are looking for opportunities in a midcap industrial name and the financial sector. They are also looking for a way to navigate megacap tech earnings. Worldwide Exchange Pick: IEX Drew Pettit of Citi likes Idex as a way to play the spending bill President Donald Trump recently signed into law. "Idex is a small and midcap industrial company, pump valve and metering name that plays to a lot of secular themes like water, oil and gas, agriculture all supported by the 'One Big Beautiful Bill,'" Pettit said. Pettit said he's seeing broader opportunities in small- and midcap cyclicals due to a valuation discount. Idex shares are down year to date. The company reports earnings on July 30. Worldwide Exchange Pick: Financials Mark Smith of Wells Fargo sees opportunity in large cap financials. "Large Cap financials have some potential upside due to possible deregulation coming out of the executive branch this year," Smith said. "Financials are the place to be right now if you want to see outsized gains and remember they are tariff talk free, US financials don't get affected by any of this." The Invesco KBW Bank ETF holding the largest U.S. bank stocks and the SPDR S & P Regional Banking ETF that holds regional banking stocks are both outperforming the market since the Trump Administration's April 2 tariff announcement. Earnings risk in megacap tech With the Nasdaq Composite trading at an all time high and the Roundhill Magnificent Seven ETF within 1.5% of its record, Angelo Zino of CFRA is highlighting the risk to the megacap tech trade with Tesla and Alphabet reporting earnings this week. Last week, Netflix beat estimates for revenue and earnings, but the stock closed lower the day after reporting. "Our view is you are going to need a notable 'beat and raise' across the board here for the most part, outside of an Alphabet where the expectations, valuations are a little bit more reasonable in nature." He added: "If you can hear some of these companies talk about accelerating growth tied to AI, a guy like Zuckerberg at Meta … if he talks about accelerating growth here over the next 18-24 months I think that's where the stock could potentially go higher."