How to Find Strong Computer and Technology Stocks Slated for Positive Earnings Surprises

Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

The Zacks Earnings ESP, Explained

The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% 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 Synopsys?

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. Synopsys (SNPS) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $3.68 a share, just two days from its upcoming earnings release on August 26, 2026.

By taking the percentage difference between the $3.68 Most Accurate Estimate and the $3.67 Zacks Consensus Estimate, Synopsys has an Earnings ESP of +0.35%. Investors should also know that SNPS 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.

SNPS is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is ASML (ASML).

Slated to report earnings on October 21, 2026, ASML holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $13.25 a share 58 days from its next quarterly update.

ASML's Earnings ESP figure currently stands at +5.64% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $12.54.

SNPS and ASML'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 Synopsys, Inc. (SNPS)?

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

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