Editor’s Note: The earnings explosion Nathan details in today’s article — including Dell’s 757% AI server revenue surge — is being fueled by one thing: a structural boom in AI data center demand. Robert Rapier just identified 5 essential-service stocks at the center of the biggest power demand surge in 20 years — the monopoly businesses powering every AI server Dell is selling.

With April and May in the books and the calendar flipping over to June, there are just 30 days left until the end of the second quarter. This is the time when analysts run “channel checks”, speaking with a company’s suppliers and customers to gauge demand, shipment volume, pricing and other important trends.

Once gathered, that ground-level market intelligence is scrutinized and used to determine whether the business is running ahead, behind, or right on track with prior sales and earnings expectations. Analysts can then tweak their numbers and make upward or downward revisions.

Between day one of the quarter and day 60, earnings estimates typically drift lower. Take Walmart (NYSE: WMT). At the beginning April, the retail giant was expected to put up a second quarter profit of $0.75 per share. Today, as we head into the final lap, the consensus target stands at $0.74.

It happens.

According to FactSet Research, this is the general trend for the broader market over the past 5, 10, 15 and 20-year time frames. Looking back over the past 80 quarters, S&P earnings have declined by an average of 3.2% at this point relative to the start of the quarter.

Bucking the Trend
This time? Well, the number crunchers see more positive signals than negative. Earnings estimates for April-June 2026 have been adjusted upward by 2.5%. That’s a stark departure from historical norms – even more impressive considering the drag of elevated energy prices.

The S&P 500 is now expected to deliver robust second quarter earnings growth of 21.6%.

Curiously, six of the market’s main sectors have registered a drop over the past eight weeks, led by a 15.2% decline in the healthcare space. But the other five sectors have picked up the slack… and then some. The energy group is leading the charge, but near-term growth prospects for materials, communication, technology and real estate have also just brightened considerably.

Texas Instruments (NYSE: TXN) has seen its second quarter earnings estimates climb from $1.56 in April to $1.92 per share today. That’s a favorable trajectory. But in terms of the sharpest revisions, it doesn’t crack the top-10. So who sits atop this particular leaderboard?

Well, there are dozens of outliers whose fortunes have significantly changed for the better. Quite a few have earnings revisions of 20% or better over the past eight weeks. Some have seen targets raised by 30%. But with adjustments of 47% to 66%, the three below stand out from the crowd.

Albemarle (NYSE: ALB) – Albemarle is one of the world’s largest integrated chemical companies, with an enviable collection of upstream mineral deposits and downstream refineries. But the company is best known for being the industry’s largest lithium producer.

If you haven’t noticed, battery-grade lithium carbonate spot prices have been surging lately, topping $25,000 per ton on the Shanghai Metals Market. Amid rising demand for data center storage (among other applications), the global lithium market is widely expected to shift from supply surplus to deficit later this year. Shuttered mines in China could widen the shortfall.

Albemarle is a key beneficiary.

The company benefited handsomely from a 50%+ surge in lithium sales prices last quarter, which coupled with a double-digit increase in sales volume, propelled EBITDA 148% higher. Adjusted earnings came in at $2.95 per share, more than doubling Wall Street’s $1.24 target.

Analysts don’t see the party ending anytime soon. Two months ago, second quarter earnings were forecast to hit $2.05 per share. One month ago, that figure was raised to $2.39 per share. Last week, it lifted to $2.99. And today, it stands at $3.03.

That’s nearly a 50% surge. The market has taken notice, driving ALB shares up 35% over the past six months.

ConocoPhillips (NYSE: COP) – I’m pleased to see one of my long-time High-Yield Investing holdings on this list.

Analysts have underestimated COP’s earnings capacity in three of the last four quarters. And it might just have another upside surprise in store for next quarter. Back in April, the global energy producer was expected to bank a profit of $1.77 per share. That estimate shot up to $2.57 at the beginning of May and $2.70 near the end.

It has since climbed another $0.12 (to $2.88 per share) over the past seven days alone. That’s a big adjustment in just one week, particularly for a company with 1.2 billion shares outstanding.

ConocoPhillips brings 2.3 million barrels of oil equivalent to the surface daily, with half of that production coming from the Permian Basin and other homegrown sources. The company netted a realized sales price of $50.36 per barrel last quarter, good enough to generate $5+ billion in operating cash flows.

More than half of that money was judiciously deployed into capital growth projects, still leaving $1 billion for dividends and another $1 billion for stock buybacks.

Needless to say, with continued supply disruptions in the Middle East driving benchmark Brent crude prices to between $95 and $100 per barrel, the company will gush even more cash next quarter.

Dell Technologies (NSDQ: DELL) – Last week, Dell enjoyed one of its best days on record — surging 40% in a single trading session. That impressive rally was sparked by a blowout earnings report and robust full-year guidance.

This wasn’t your standard beat-and-raise quarter.

The PC market is enjoying brisk tailwinds from a lengthy Windows 11 upgrade cycle, as well as the shift to AI-embedded desktop and laptop computers outfitted with neural processing units (NPUs). But it’s the server division that is really shining. Dell took in $16 billion in AI-optimized server revenues last quarter, a jaw-dropping increase of 757%.

That’s just one unit within a larger infrastructure solutions division whose revenues spiked 181% to $29 billion. New records were set across the board, most notably on the bottom line – with earnings skyrocketing 282% from last year.

Even before these tallies were unveiled, investors were already buzzing over the announcement of a new $9.5 billion contract with the Pentagon. Management is now eyeing 2026 revenues of $167 billion. For context, that’s about $60 billion above its previous forecast just a few months ago.

As impressive as all this sounds, for every $1 in AI-server sales recorded last quarter, Dell booked $1.50 in future orders. They totaled $24 billion, driving backlog to more than $50 billion.

Citing “exceptionally strong” sales and pricing, COO Jeff Clarke said the insatiable demand for AI hardware “shows no signs of slowing.”

As you might expect, analysts have since been scrambling to make adjustments. Dell’s second quarter earnings had already climbed from $2.94 in April to $3.02 in May. But the real fireworks have come the past few days, sending estimates all the way to $4.88 per share.

Keep in mind, that’s just one quarter. Dell’s full-year 2026 earnings outlook has been raised from just $12 and change to $18.53 per share.

What Albemarle, ConocoPhillips, and Dell have in common is structural demand that analysts have consistently underestimated — not short-term momentum. The same dynamic is playing out in the essential-service companies that power all of it. Our colleague Robert Rapier focuses exclusively on those companies in Utility Forecaster, where he’s identified 5 essential-service stocks that sit at the infrastructure layer of the AI boom: the utilities, pipelines, and power operators that get paid every time a data center runs. These aren’t speculative tech bets — they carry less than half the market’s volatility and keep paying dividends in any economy. See Robert’s 5 picks for the AI power surge →