Technology and Defence

The following basket includes three companies that have already released their earnings for the 2nd quarter of 2026 and 1st half year or going to release in the nearest future. Companies were chosen because of the positive newsfeed in technology sector and defense industry that might favorably impact their results in the future. Moreover, at the current price levels it is possible to set comfortable capital barrier at 2025 price levels or lower. Additionally, analysts look positive at these names and from the financial perspective companies still look solid. We consider that both Apple and Alphabet are good options from the AI future perspective as these large caps have more experience and confidence in AI revolution.

Apple Inc. [Internal score 65/100] is one of the largest tech companies in the world. According to recent news, Apple Intelligence, its generative AI service, has successfully completed a key registration step with China’s cybersecurity regulator. Apple device users in China can now use this feature. It is noted that Alibaba Qwen and Baidu technologies will be integrated into local devices. This news has boosted the company’s share price. Major investment banks have revised their forecasts upward. After investors took profits in semiconductor and memory chip companies, they may have invested in Apple shares following the positive news.

According to the company’s Q1 2026 financial results, revenue increased 16.6% year-on-year to $111 billion. Net profit was $29.6 billion, up from $24.8 billion in the same period in 2025. Revenue is expected to increase 16% to $108.9 billion in Q2 2026, while net profit is expected to increase 18.4% to $27.8 billion. Gross margin for Q1 2026 was 49.3% (up 2.0 percentage points). EBITDA margin exceeded 35.3% (up 1.6 percentage points).

Honeywell Int. [Internal score 60/100]: According to recent news Republicans in the United States House of Representatives have narrowly passed a massive $1.15 trillion military spending package. The package is needed for funding operations connected to the war in Iran, rebuilding depleted weapon stockpiles, and expanding defense technology collaboration with Israel. Honeywell is a primary beneficiary of recent defense budget priorities through a $500 million multi-year production agreement, expanded manufacturing capacity, and strategic positioning in European market. In March Honeywell signed Tier 1 supplier framework agreement with the U.S. Department of Defense.

Honeywell recently published financial report for the past quarter. According to published data revenue of the company slightly decreased by 6% y-o-y and exceeded $9.7B. Net income for the period is equal to $920M vs $1.7B for the same quarter in 2025. Free Cash Flow is equal to $961M.

Alphabet Inc. [Internal score 70/100]: Google’s parent company, one of the world’s largest technology conglomerates and a key player in digital advertising, cloud computing, and artificial intelligence. Alphabet has three business segments: Google Services, Google Cloud other projects like Waymo.

Alphabet raised its 2026 capital expenditure forecast to $195–205B (for accelerator purchases, data center construction, and its own TPU chips). This temporarily puts pressure on free cash flow (FCF), but management attributes the aggressive CapEx to the need to meet exponential capacity demand.

According to the recent financial report revenue of the company increased 24% y-o-y and exceeded $119.8B. Net income for the period is equal to $33.9B (+26% y-o-y). Even though the company demonstrated negative FCF for the past quarter equal to (-5.8B USD), for the whole year it is forecasted to be at $3.8B level.

The Fed decision on 29 July and Apple’s results on 30 July provide two near-term catalysts. A rate hold would ease pressure on tech valuations, while Apple’s report could confirm that strong demand and progress towards a China AI launch are supporting growth. Alphabet’s post-results fall despite strong Cloud demand also offers a more attractive entry point.