The article explains how to use the Zacks Earnings ESP (Expected Surprise Prediction) filter to identify stocks likely to beat earnings expectations. The system compares the most recent analyst estimates against consensus estimates, and when combined with a Zacks Rank #3 or better, stocks posted positive earnings surprises 70% of the time with average annual returns of 28%. Two example stocks highlighted are Skyward Specialty Insurance (SKWD) with a +7.55% ESP and Hut 8 (HUT) with a +11.13% ESP, both expected to report earnings in early November 2026.

The article highlights two finance stocks with positive Earnings Surprise Prediction (ESP) figures that are expected to beat analyst estimates in their upcoming earnings reports: Hut 8 (HUT) with a +34.12% ESP ahead of November 4, 2026 earnings, and Innovative Industrial Properties (IIPR) with a +1.10% ESP before November 2, 2026 earnings. Both stocks carry a Zacks Rank #3 (Hold) rating.

Applied Digital reported Q1 fiscal 2027 revenues surging 322% to $341.9 million, beating estimates, but posted a wider loss per share of 76 cents, missing expectations. Despite a $36 billion contracted revenue base and improving adjusted EBITDA, the company faces challenges from widening GAAP losses, $6.4 billion in debt, heavy capital requirements, and uncertainty around AI demand. The stock trades at a premium valuation of 7.76X sales versus the industry's 2.48X multiple and has underperformed peers over the past year.

Meta Platforms is reportedly in early-stage talks with Anthropic for a $10 billion compute lease deal over 2 years, raising concerns among neocloud investors about potential competition. However, Meta's own massive compute needs and the strong demand from AI developers suggest neoclouds like Nebius, CoreWeave, and Iren can diversify their customer bases and secure long-term contracts ahead of potential hyperscaler competition.

Hut 8 and Fluence Energy have secured major contracts positioning them as critical suppliers for AI infrastructure. Hut 8 signed a $9.8 billion 15-year lease at its Beacon Point campus, while Fluence qualified as a pre-qualified supplier to major hyperscalers for energy storage. However, emerging orbital data center projects from Google and SpaceX pose a long-term structural risk to ground-based power infrastructure investments, though economics remain unfavorable before 2030.

Hut 8 and Cipher Digital stocks surged on strong AI data center lease announcements. Hut 8 signed a 15-year, $9.8 billion deal (potentially $25.1 billion with renewals) for 352 MW of AI capacity, while Cipher Digital signed its third AI data center campus lease with a hyperscale tenant. Both companies are pivoting from crypto mining to high-performance computing infrastructure, attracting investor interest in contracted capacity and long-duration AI revenue.

AlphaTON Capital Corp. rebranded to Alpha Compute Corp. and began trading under ticker 'ALP', pivoting to AI GPU-as-a-service and confidential computing. The company deploys NVIDIA GPUs within trusted execution environments to provide privacy-centric AI infrastructure. CEO Brittany Kaiser stated that NVIDIA GPUs are now the company's core balance sheet assets, with plans to deploy over 1,000 Blackwell-generation GPUs. The stock is down 58.44% year-to-date with a market cap of $7.50 million.

Ardsley Advisory Partners LP sold 440,000 shares of Hut 8 (55% of its position) worth $19.4 million in Q4 2025, likely taking profits after the stock surged 163% over the past year from April lows near $10 to above $50. Despite strong 45% revenue growth, the company's expensive 26x price-to-sales ratio and net losses may have prompted the fund's exit.

Hedge fund Flight Deck Capital purchased 214,700 shares of Hut 8 (worth ~$9.86 million) in Q4 2025, signaling a bullish outlook. The stock has surged 167.6% over the past year, driven by strong demand for AI computing infrastructure. However, with a P/S ratio of 24 (double from a year ago), the analyst recommends waiting for a pullback before buying, despite the company's strong revenue growth and competitive advantages in energy infrastructure.

MicroStrategy (MSTR) shares have declined 59.7% over the past year, significantly underperforming the finance sector. Despite weak technical indicators and concerns about its leveraged model and equity dilution, the article argues the stock presents a buying opportunity given its massive Bitcoin treasury of 717,131 BTC (3.4% of all BTC), conservative leverage, and demonstrated ability to grow Bitcoin per share. The company raised $25.3 billion in 2025 and maintains strong balance sheet durability with 67 years of dividend coverage.

Law firm Bragar Eagel & Squire is investigating Hut 8 Corp. for potential breaches of fiduciary duty following a class action complaint. The investigation concerns alleged misstatements related to Hut 8's November 2023 merger with USBTC, including undisclosed related party shareholders, operational failures at the King Mountain bitcoin mining facility, and overstated financials. A J Capital Research report triggered a 23.3% stock price decline on January 18, 2024.

Hut 8 Corp. is pivoting from cryptocurrency mining to AI data center infrastructure, leveraging its existing power infrastructure. The company secured a transformative $18 billion partnership with AI lab Anthropic and cloud provider Fluidstack, with plans to expand 8.6 gigawatts of capacity across four U.S. sites. While the company has a strong balance sheet with $1.2 billion in Bitcoin reserves and minimal debt, risks include executing rapid expansion without pre-signed contracts and managing multiple simultaneous buildouts.