Why Investors Need to Take Advantage of These 2 Computer and Technology Stocks Now

Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.

The Zacks Earnings ESP, Explained

The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.

Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.

Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.

Should You Consider Dell Technologies?

Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Dell Technologies (DELL) earns a #1 (Strong Buy) right now and its Most Accurate Estimate sits at $5.04 a share, just 21 days from its upcoming earnings release on September 3, 2026.

By taking the percentage difference between the $5.04 Most Accurate Estimate and the $4.88 Zacks Consensus Estimate, Dell Technologies has an Earnings ESP of +3.35%. Investors should also know that DELL is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

DELL is part of a big group of Computer and Technology stocks that boast a positive ESP, and investors may want to take a look at Micron (MU) as well.

Micron is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on September 22, 2026. MU's Most Accurate Estimate sits at $32.36 a share 40 days from its next earnings release.

For Micron, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $31.39 is +3.09%.

DELL and MU's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

Should You Invest in Dell Technologies Inc. (DELL)?

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This article originally published on Zacks Investment Research (zacks.com).

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