July has brought heightened volatility to Wall Street, with U.S. stocks drifting lower amid persistent geopolitical tensions, rising crude oil prices, and growing concerns over escalating AI capital expenditures. As tech giants like Alphabet and Tesla face pressure from heavy AI spending, investors are rotating into fundamentally resilient names.
To navigate this uncertain environment, Chris Senyek, a senior analyst at Wolfe Research, recommends anchoring portfolios in high-quality companies that consistently exceed earnings expectations. He has identified three stocks for the second half of 2026 that he believes are well-positioned to benefit from post-earnings momentum.
BlackRock Inc (BLK)
The first pick is BlackRock, the world's largest asset manager, which reported strong fiscal Q2 results. The company achieved record net inflows and expanding margins, prompting an upgrade from JPMorgan last week. Analyst Michael Cho described BlackRock as a "best-in-class asset manager with execution against various growth drivers across different business lines." JPMorgan cited organic revenue growth and operating leverage as key reasons for its bullish outlook, and expects inflows to remain robust. Additionally, BlackRock offers a dividend yield of 2.09%, enhancing its appeal as a long-term holding. For context on recent market moves, see our coverage of the Dow's 546-point surge driven by strong earnings.
UnitedHealth Group (UNH)
UnitedHealth shares have edged higher after reporting better-than-expected Q2 earnings on July 16. Goldman Sachs maintained its Overweight rating on the healthcare giant, stating that the results "reinforce that turnaround in insurance and care delivery remains firmly on track." The investment firm expects UNH stock to extend gains as improved medical cost trends and strength in Optum Health continue to boost profitability. UnitedHealth also pays a dividend yield of 2.16%, making it attractive for income-focused investors. This pick aligns with a broader trend of quality stocks gaining favor amid tech weakness, as seen in the Nasdaq's slide driven by chip stock selloffs.
Philip Morris International (PM)
Completing Wolfe's trio is Philip Morris International, a consumer staple giant whose multi-year shift toward reduced-risk alternatives is gaining momentum. CEO Jacek Olczak expressed optimism in the recent earnings release, noting he was "very pleased with what has happened beyond the numbers this quarter" as smoke-free products gain market traction. Wall Street has taken notice: BTIG initiated coverage with a Buy rating and a $216 price target, implying a 10% upside. Analyst Owen Bennett praised management's execution of the smoke-free transition, highlighting that "combustibles remain robust, a global leading RRP premium positioning has been established, and critically from a valuation perspective, this transition continues at levels way beyond most peers." Philip Morris also offers a solid dividend yield of 2.94%, further appealing to income-oriented investors. For more on sector rotation, check our analysis of oil stocks poised for gains if crude prices rise.
These three stocks represent a focus on quality and consistent earnings performance in a market that is increasingly rewarding such attributes. As geopolitical and sector-specific risks persist, Wolfe Research's picks offer a defensive tilt with growth potential.
This article is for informational purposes only and does not constitute financial advice.
