Ericsson: The Memory Chip Pressure Everyone Sees May Already Be Priced In
Note: These figures reflect diluted GAAP earnings per share, reported before non-recurring items, and may differ from the non-GAAP figures used by some sources.
Part 2.1: Price Behavior Around Earnings
Ericsson typically reports earnings before the market open, meaning Day 0 captures the first full trading session reaction to results, while Day +1 reflects follow-through momentum.
| Earnings Date | Day 0 Move | Day 0 Range | Day +1 Move | Day +1 Range |
|---|---|---|---|---|
| 2026-07-14 | -$1.58 (-13.48%) | $0.58 (4.91%) | -$0.07 (-0.69%) | $0.36 (3.55%) |
| 2026-04-17 | -$0.79 (-6.50%) | $0.87 (7.15%) | +$0.40 (+3.52%) | $0.25 (2.24%) |
| 2026-01-23 | +$0.85 (+8.87%) | $0.21 (2.24%) | +$0.25 (+2.40%) | $0.23 (2.21%) |
| 2025-10-14 | +$1.68 (+20.56%) | $0.46 (5.63%) | -$0.20 (-2.03%) | $0.24 (2.44%) |
| 2025-07-15 | -$0.62 (-7.91%) | $0.51 (6.57%) | +$0.15 (+2.08%) | $0.18 (2.49%) |
| 2025-04-15 | +$0.62 (+8.32%) | $0.20 (2.62%) | -$0.13 (-1.61%) | $0.22 (2.73%) |
| 2025-01-24 | -$1.28 (-14.38%) | $0.41 (4.61%) | +$0.11 (+1.44%) | $0.31 (4.09%) |
| 2024-10-15 | +$0.99 (+13.13%) | $0.48 (6.36%) | -$0.05 (-0.59%) | $0.15 (1.71%) |
| Avg Abs Move | 11.64% | 5.01% | 1.79% | 2.68% |
Ericsson's stock has exhibited high volatility around earnings releases, with an average absolute Day 0 move of 11.64% over the past eight quarters. The direction has been unpredictable: the stock surged 20.56% in October 2025 following a strong beat, but plunged 14.38% in January 2025 and 13.48% in July 2026 despite meeting or beating estimates in some cases. Day +1 follow-through has been much more muted, averaging just 1.79%, suggesting most of the price discovery happens immediately on earnings day. The wide Day 0 range of 5.01% indicates significant intraday volatility as the market digests results and guidance. Investors should brace for a potentially large swing in either direction, with recent history showing moves ranging from down 13.48% to up 20.56%.
Part 2.2: Options Market Expected Move
| Metric | Value |
|---|---|
| Expiration Date | 10/16/26 (DTE 2) |
| Expected Move | $0.77 (7.99%) |
| Expected Range | $8.82 to $10.35 |
| Implied Volatility | 138.99% |
The options market is pricing an expected move of 7.99% (±$0.77) through the October 16 expiration, which is notably lower than the stock's average historical earnings move of 11.64%. This suggests options traders may be underpricing the potential volatility, given Ericsson's track record of double-digit swings in six of the past eight earnings releases.
Part 3: What Analysts Are Saying
Analyst sentiment on Ericsson has deteriorated heading into this earnings release, with the average recommendation standing at 2.44 on a 5-point scale — firmly in sell territory. The consensus is deeply divided: just 1 Strong Buy and 9 Hold ratings are offset by 6 analysts recommending selling the stock (1 Moderate Sell and 5 Strong Sells). One month ago, the picture was slightly less bearish with 10 Holds and only 4 Strong Sells.
The average price target of $9.70 implies just 1.3% upside from the current price of $9.58, with the range spanning from a low of $8.00 to a high of $11.00. This narrow upside potential reflects Wall Street's cautious stance on the stock's near-term prospects. The deteriorating sentiment trend — with one Hold rating shifting to a Strong Sell over the past month — underscores growing concern about Ericsson's ability to navigate the current telecom spending downturn. The concentration of sell-side ratings and minimal price target upside suggest analysts see limited catalysts for outperformance unless the company delivers a meaningful positive surprise on earnings or guidance.
Part 4: Technical Picture
Ericsson's technical setup heading into earnings is decidedly bearish, with the Barchart Technical Opinion registering a 96% Sell signal — down slightly from 100% Sell last week but significantly worse than the 80% Sell reading from a month ago. The stock is caught in a clear downtrend across all timeframes:
- Short-term (75% Sell): Strong sell signal indicates near-term momentum remains negative
- Medium-term (100% Sell): Maximum bearish reading suggests intermediate-term pressure is intensifying
- Long-term (100% Sell): Maximum sell signal reflects entrenched weakness in the longer-term trend
Trend Characteristics: The trend shows Good strength but Average direction, suggesting the downward momentum is consistent but not accelerating dramatically — a pattern of steady erosion rather than capitulation.
The stock is trading at $9.58, positioned above its 5-day ($9.54), 10-day ($9.43), and 20-day ($9.58) moving averages, indicating some short-term stabilization. However, it remains below all longer-term averages: the 50-day ($9.90), 100-day ($10.59), and 200-day ($10.89). This configuration — above short-term support but below all meaningful resistance — suggests the stock is attempting to find a floor after a prolonged decline but has yet to establish a sustainable recovery.
| Period | Value | Period | Value |
|---|---|---|---|
| 5-Day MA | $9.54 | 50-Day MA | $9.90 |
| 10-Day MA | $9.43 | 100-Day MA | $10.59 |
| 20-Day MA | $9.58 | 200-Day MA | $10.89 |
The technical picture offers little support heading into earnings. With the stock trading 12% below its 200-day moving average and all three timeframes flashing sell signals, Ericsson faces significant overhead resistance. A positive earnings surprise would need to be substantial to break through the 50-day average at $9.90 and shift the technical momentum. Conversely, any disappointment could quickly push the stock back toward the recent lows, given the lack of technical cushion. The setup is cautionary: momentum, trend, and positioning all favor the downside unless results and guidance materially exceed expectations.