To The Moon

Major US tech companies reporting earnings this week include Tesla, Microsoft, META, AAPL, and storage giants STX, SNDK, and WDC.

Earnings Focus Points:

🚀 Tesla's earnings focus has shifted from short-term financials to long-term tech breakthroughs. Key post-earnings price drivers will be: 1) Substantive progress on frontier tech like Robotaxi deployment without safety drivers; 2) The timeline for FSD to reach "eyes-off" unsupervised versions; 3) Whether 2026 delivery, gross margin, and free cash flow guidance are more pessimistic than market consensus, heightening concerns over near-term profitability and cash burn.

🚀 Microsoft's earnings focus is on whether Azure cloud growth can exceed expectations, the inflection point in Copilot adoption and its impact on Office ARPU, and if concerns over capex efficiency are alleviated. Key post-earnings drivers are: Actual Azure growth rate & future guidance, progress in Copilot commercialization (especially ARPU growth), and management's clarity on the strategic returns of their capex plans.

🚀 Meta's earnings focus centers on the tension between AI-driven ad revenue growth (ROI up 9% YoY) and the expectation of massive 2026 costs/capex (~$150-160B total expenses). Key post-earnings price factors are: Whether the specific capex guidance provided significantly exceeds market expectations, and if management can clearly articulate the path and timeline for ROI on AI investments, easing market concerns over near-term profitability and cash flow.

🚀 Apple's earnings focus is on whether iPhone 17 series demand can beat expectations and drive overall revenue growth, and if service business diversification can offset App Store growth deceleration. Key post-earnings volatility drivers will be: The actual impact of rising memory costs on gross margin, the strength of FQ2'26 guidance, and changes in operating expenses related to AI (e.g., Gemini) costs.

🚀 STX's earnings focus is on whether Data Center-driven revenue and EPS can continue exceeding expectations, and the commercialization progress of HAMR HDD technology (e.g., customer qualification & shipments). Key post-earnings drivers are: Q3 guidance (especially whether gross margin can expand to the expected 41.5%), the adoption speed and market share changes for HAMR, and management's latest commentary on long-term incremental margins and shareholder returns (free cash flow return).

🚀 SanDisk's earnings focus is on whether performance and guidance can beat expectations amid the NAND flash price upcycle. Key post-earnings drivers are: 1) Whether FQ2'26 non-GAAP EPS (especially ASP increases) is significantly above the $3.45 consensus; 2) Whether FQ3'26 guidance shows ASP growth reaching or exceeding 22% (consensus $4.62); 3) Whether positive commentary from industry giants (SK Hynix, Samsung) on NAND supply/demand and pricing provides additional catalysts.

🚀 For Western Digital (WDC) earnings, market focus will be on its HDD business, particularly demand trends for cloud/data center high-capacity storage, product mix, and ASP changes. The supply/demand environment, pricing trends, and partnership dynamics with Kioxia for the NAND business are also core. Post-earnings price will be influenced by: 1) Whether results and next-quarter guidance beat expectations, especially regarding profit and free cash flow improvement; 2) Management's assessment of the storage cycle recovery strength; 3) The company's competitive edge and share changes in high-growth areas like AI data center storage.

Earnings Season Options Characteristic: IV Crush

Option prices incorporate "expected volatility" (Implied Volatility, IV). Before earnings, due to event uncertainty, IV is often elevated, making options expensive. After earnings are released, the uncertainty disappears, and IV typically drops sharply—like being "crushed"—leading to rapid depreciation in option prices (especially time value). This is IV Crush.

🏫 How to Trade Using IV Crush?

Core Logic: Short high IV, profiting from its decline.
Typical strategies are selling strategies: sell calls, sell puts, or sell straddles/strangles. As long as the post-earnings stock price movement stays within your breakeven points, the IV crush will generate profit for you.

🏫 Key Risks:
The stock price moves post-earnings far beyond expectations (directional risk), potentially causing losses. Suitable for more experienced investors who can gauge the probable movement range.

IV Crush Strategy Demo Example:
Sell Tesla's weekly 380 put $TSLA 20260130 380.0 PUT$ 

💡 Strategy Analysis:
Using the prices of weekly expiry calls and puts, we can back-calculate the market's expected post-earnings stock price range, i.e., the price range implied by the volatility.
Based on calculations, the market expects the post-earnings price range this week to be: 410 ~ 460.

After earnings are released, regardless of which direction Tesla's stock moves, as long as it stays above 400, we will observe the premium of the 380 put drop significantly, approaching zero.
Of course, if the stock price falls below 400, as long as Friday's closing price remains above 380, the put will not be exercised, and the premium is still collected.

💡 IV Crush is not an easy concept to grasp intuitively. I encourage everyone to use a demo account to experience it firsthand!