This Earnings Report Could Steal The Show Next Week (Not Nvidia)

While Nvidia's earnings loom, semiconductor firm Photronics (PLAB) reports Q2 results on August 26, presenting an intriguing contrarian signal. A specific technical setup, seen nine times in a decade, historically led to PLAB being higher 67% of the time one week later, averaging a 1.6% gain, and 56% higher one month later with a 2.2% return. Such a move could break a downtrend from its May high. The stock has a history of significant post-earnings volatility, with six of the last eight moves being higher, and the options market anticipates a 15.8% swing. Short interest recently rose 15%. While not a guaranteed breakout, PLAB offers volatile short-term potential for options traders, especially given its contrarian quantitative indicators. Nvidia will get all the headlines. But there’s one tech stock that could quietly climb the charts in the next few weeks. While the whole world obsesses over Nvidia (NVDA) earnings and the capex concerns plaguing hyperscalers next week, there’s a lesser-known, AI-adjacent name stepping into the earnings confessional. One day before Nvidia, on Wednesday, Aug. 26, before the market opens, semiconductor Phototronics (PLAB) reports second-quarter earnings. Ahead of the event, an intriguing signal is flashing that could make the forgotten photomask and circuit company a sleeper for contrarians. According to Schaeffer’s Senior Quantitative Analyst Rocky White, PLAB is trading within 0.75 times the 320-day moving averages’ 20-day average true range (ATR), after spending at least 80% of the previous two weeks and 80% of the prior 42 trading sessions above that trendline. This setup has appeared nine other times over the last decade, after which the stock was higher one week later 67% of the time, averaging a 1.6% return. One month later, Photronics stock boasts a 2.2% return and 56%-win rate. At face value, that signal is nothing to write home about. But a move higher of similar magnitude over either timeframe would take the shares above a downtrend line connected to PLAB’s May 11 record high of $56. That area also roughly would coincide with the stock’s post-earnings close from May 28, after a disastrous revenue miss. The stock has a history of making outsized post-earnings moves, looking back two years. In fact, six of the last eight have been higher, including an 8% gap last August. Overall, the options market is pricing in a 15.8% post-earnings move for Wednesday’s trading. Short interest is up 15% in the most recent reporting period, and the 4.50 million shares sold short account for 8% of the stock’s total available float. Let’s make one thing clear. Photronics isn’t some triple bagger waiting to breakout at an intriguing entry point. That last dismal post-earnings selloff is still probably ringing in investors’ ears, and for good reason. However, for options traders looking for a short-term directionless move, this a volatile name heading into a historically volatile week with some contrarian quantitative potential going for it.