HPWG Podcast August 2026: Moves to Protect Gains, Earnings Season, Buying Opportunity in Technology?

JENNA:

Welcome to the Hoffman Private Wealth Group podcast. I’m Jenna Makras, Wealth Advisor with Hoffman Private Wealth Group, and I’m joined by Todd Hoffman, our Founding Partner and Portfolio Manager. Each month, we take a few minutes to discuss what is moving the markets, what we are watching, and how we are thinking about portfolio strategy. Todd, July gave investors a lot to process. Where do you want to begin?

TODD:

I think we should begin with Iran because the Middle East remained one of the biggest sources of uncertainty during July. We saw renewed military activity, pressure on important shipping routes, and another sharp move in oil. More recently, the United States and Iran paused strikes to allow diplomacy another opportunity. Markets welcomed that pause, and oil prices pulled back from their recent highs, but the situation is not close to being resolved.

JENNA:

How does that flow through to the economy and the Federal Reserve?

TODD:

Energy affects almost everything. A rise in oil shows up in gasoline, diesel, air travel, manufacturing and food costs. It can slow consumer spending, and higher inflation pushes the Fed may to remain restrictive. That is why the markets view the pause as positive.

JENNA:

The other major story entering August is earnings. We are just getting into the heart of technology earnings season. What are you expecting?

TODD:

This is the part of earnings season we have been anxiously waiting for. These reports will tell us whether demand for artificial intelligence infrastructure remains as strong as guidance suggests. We will be listening closely to the reports from the cloud and technology, semiconductor, networking, data-storage, power and data-center companies that make the AI buildout possible.

JENNA:

You have said for some time that we are early on this buildout. Do you still feel this is the case? 

TODD:

I do. AI requires enormous computing power, memory, storage, networking capacity, electricity, cooling and physical facilities. It also requires software and services that help companies turn that infrastructure into productivity and revenue. The buildout is in early stages in the US and across the world and this creates opportunity across the entire ecosystem—not just a single company. We will be looking for the strongest companies with real demand, revenue growth, pricing power and a credible path to converting AI spending into earnings and cash flow.

JENNA:

Technology and other momentum stocks lost steam in July. Why do you think that happened?

TODD:

Several forces came together. Many companies made large profits and we saw profit taking. Concerns of higher interest rates pressured valuations, particularly in faster-growing higher PE companies. We also saw money rotate into more defensive and value-oriented areas of the market. Finally, expectations for AI companies are high and investors need to see things are still working. Finally with the earnings being reported investors will be reassured and we believe the markets will respond positively.  

JENNA:

Is the momentum trade over? 

TODD:

No, leadership pauses are normal. Momentum is not a straight line, and even the strongest long-term themes experience periods of consolidation. What matters now is whether earnings and forward guidance validate the underlying growth. If revenues continue to grow, margins remain high and funding for capital-spending plans remain intact, I believe investors will refocus on the companies producing the best earnings growth, and the momentum trade will reignite. 

JENNA:

What specifically would give you confidence that the AI trade is ready to bounce back?

TODD:

We need to see the good earnings everyone expects but we also need companies to continue to give good forward guidance. Markets tend to look six to twelve months ahead, so a company can report a solid quarter and still struggle if its guidance disappoints for the year. The combination of good results and rising expectations is what will bring buyers back.

JENNA:

There has also been concern about how much cash the large technology companies are spending on AI infrastructure. How do you balance the opportunity against that risk?

TODD:

That is an important question. The spending is enormous; we want to see companies with discipline and strong balance sheets and evidence that demand is keeping pace with capacity. This is why security selection matters. A powerful theme does not eliminate valuation risk, execution risk or competition. We only invest in companies where the fundamentals can support the valuation. 

JENNA:

We have had some reports come in already, Google reported last week and the numbers were strong, but the stock still went down. Are you concerned that we could get good reports and the stocks keep moving lower. 

TODD:

We are just entering the busiest stretch of the quarterly earnings season. So far, most of the reports have come from the financial sector, along with a handful of companies from other industries. Overall, financial stocks have responded well and moved higher following generally strong results.

As we move into the heart of technology earnings, I believe we could see a similar response, particularly among leading AI and technology companies that have sold off and are selling at lower prices than they were just weeks ago. Sometimes the market simply needs additional evidence before investors regain confidence and momentum returns. They should get this evidence during the next couple of weeks. 

JENNA:

So, what actions have you taken during July’s weakness? 

TODD:

We have raised cash at different points, trimmed positions, we have also stopped out of several companies.  We have tried to maintain exposure particularly if companies have large, short-term gains and we have also added to less volatile Industrials, Financials, Healthcare and Small Cap companies. Finally, we added hedges to mitigate downside risks. Now that earnings are here, we will either close out, or roll our Hedges to longer term maturities, depending on the markets.   

JENNA:

Is there anything else making you cautious now?

TODD:

I sound like a broken record here but renewed escalation with Iran, particularly if we start putting troops on the ground, or if this past weekend’s escalation from Iran’s proxies materially restricts energy flows. Also, last week Trump started talking about Tariffs again. Earlier in the year this caused a lot of Angst in the markets. I don’t expect a repeat of this after the courts reversed many of Trumps Tariffs, but it could cause noise and interfere with a positive story from earnings.

JENNA:

And what is the constructive case?

TODD:

The constructive case is that diplomacy holds, oil continues to normalize, inflation pressure eases and corporate earnings remain healthy. If technology companies give positive forward guidance that AI demand is still translating into increasing revenues and profits, the July pullback should prove to have been just another buying opportunity and capital should rotate back toward companies with the strongest earnings momentum and the clearest growth outlook, namely the Semiconductors and AI infrastructure. This would also be good for smaller companies.  

JENNA:

So, we know the Fed has a meeting scheduled for this month, what is the market pricing in now?  

TODD:

According to FactSet, the markets are pricing in about a 34% chance of a rate increase and a 66% chance of leaving interest rates unchanged. 

JENNA:

What is the main message you want clients to take away this month?

TODD:

Do not confuse a pause in market leadership with the end of a long-term investment theme. At the same time, we are not ignoring risk simply because the long-term story is attractive. We believe the AI investment cycle remains powerful, and we expect good earnings and guidance from the companies in the portfolios and any company that doesn’t meet expectations will get sold. Our job is to participate in the opportunities without becoming complacent.

JENNA:

Todd, thank you. We will continue monitoring the Middle East, energy markets, the Federal Reserve and—most importantly over the next several weeks—the earnings reports and company guidance.

TODD:

Thank you, Jenna, and thank you to everyone listening. If you have questions about how these developments may affect your financial plan or portfolio, please reach out to our team.

JENNA:

Thank you for listening to the May edition of the Hoffman Private Wealth Group Podcast. If you find this conversation helpful, please share it with someone who might benefit from a thoughtful, research-driven perspective on today’s markets.