Diplomacy Is Over. Why We’re Renaming the Portfolio’s EPS Strategy.

While three of the four major market averages are little changed so far today, the Pro Portfolio’s EPS-focused strategy, which we’ve been referring to as the EPS Diplomats, is climbing. Part of that is due to Lumentum (LITE) being added to the Nasdaq 100, replacing CoStar Group (CSGP). That change will be effective prior to market open on May 18. While the spotlight today is on LITE shares, others in the basket are also chugging higher, notably Micron Technology (MU) and Bloom Energy (BE).

As we zero in on the halfway point for the current quarter, the basket has been a very strong performer alongside shares of Marvell (MRVL), Broadcom (AVGO), and Alphabet (GOOGL). And when we look at updated consensus EPS figures for the eight stocks that comprise the basket, we find their collective EPS growth for this year compared to 2025 is 394%. Yes, 394%.

On top of that, the basket is expected to grow its collected EPS another 74% in 2027. By comparison, the S&P 500 is currently expected to grow its EPS 23% this year, and 14% next year. This means our basket of eight stocks is poised to grow its EPS more than 17x faster than the S&P 500 this year.

All of this is leading us to rename the basket “EPS All-Stars” from “EPS Diplomats.” While some may grumble at this, consider that “all-stars” denotes a standout performer that easily best peers. The level of expected EPS growth discussed above certainly lands closer to that than “subtle, back door negotiation and collaboration” that is central to a diplomat.

Hence forward, we will refer to the basket and its strategy as “EPS All-Stars.”

Panic Point Becomes Checkpoint

We’ll also look to reduce questions, and in some cases confusion, over the Portfolio’s use of the term “Panic Point” by changing it to “Checkpoint.” With the benefit of hindsight, inclusion of the word “panic” helped cause some of the confusion.

The definition of “checkpoint” as a designated place for inspection, security screening, or a stopping point in a process to ensure safety and compliance better matches our intent.

To be clear, a position’s checkpoint is a level at which we will meaningfully re-evaluate the rationale for owning the shares in Portfolio. It is not a hard exit point, like a stop-loss.

We will be issuing a table of updated consensus EPS expectations for each of the Portfolio’s individual stock holdings and revised checkpoints near-term.

Removing Qualcomm From the Bullpen

We are removing shares of Qualcomm (QCOM) from the Bullpen, not so much because of the post-earnings run in the shares, but because of questions that drove that run-up and the continued decline in its Apple (AAPL)-related business. During the earnings call, Qualcomm management reaffirmed that only 20% of Apple’s smartphones will include Qualcomm chips this year and that percentage falls to zero next year. In 2025, Apple was estimated to account for 22%-27% of Qualcomm’s total revenue.

What led the market to overlook that pending drop was the comment from Qualcomm management that the company entered the custom silicon space and it has a program win with a leading hyperscaler. Initial shipments are slotted for the December quarter.

We’ll learn more about this when Qualcomm holds its Analyst Day in June, but if Apple is shoring up its chip capacity needs with Intel (INTC), we have to question how much capacity is going to be awarded for AI and data center chips from Qualcomm when fabs from the likes of Taiwan Semiconductor (TSM) and others are already serving customers like Nvidia (NVDA), Advanced Micro Devices (AMD), Broadcom (AVGO), and Marvell.

It boils down to can Qualcomm more than offset the drop in Apple revenue and keep its fiscal 2027 revenue in line with the $42.54 billion consensus? That would be flat with revenue forecasted for this fiscal year, which ends in September. And expected EPS for this year and next is below what it delivered in 2025.

It’s hard to get excited about QCOM shares given the risk profile. We’ll be sure to dial-into Qualcomm’s June Analyst Day if only for competitive learnings, but we’ll revisit the shares based on what we learn.

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At the time of publication, TheStreet Pro Portfolio was long AAPL, AVGO, BE, GOOGL, LITE, MRVL, MU, and NVDA shares.