Stocks are heading into the week on uneasy footing. Sunday night, the U.S. fired on and seized an Iranian-flagged cargo ship in the Gulf of Oman, and the Strait of Hormuz restrictions came back into play over the weekend. Futures are selling off. Oil is up 7%, with WTI back above $90 a barrel. The two-week ceasefire that propped up last week’s record-setting rally is set to expire this week, and the market is pricing in real risk that this thing gets worse before it gets better.
Last week was one for the record books. The Nasdaq finished with its 13th straight winning session, a streak it hasn’t matched since 1992. The S&P 500 gained 4.5%, the Nasdaq added 7.2%, and both hit new all-time highs. That’s a great run. But when markets rally that hard and that fast, any excuse to sell tends to work. The Iran news is that excuse.
None of that changes what a good investor does. You look at what’s happening, figure out which businesses benefit, and buy the ones that make sense at the right price. Here’s what I’m watching this week.
Northrop Grumman (NOC)
Northrop reports first-quarter earnings Tuesday before the bell. Analysts are looking for $6.03 per share on revenue of $9.75 billion. The bigger story is the backdrop. With the U.S. and Iran escalating, defense contractors are exactly where you want to be.
Trump’s fiscal 2027 budget request calls for a significant jump in defense spending, and that’s before this weekend’s developments. Northrop makes the B-21 Raider stealth bomber, Sentinel ICBMs, and a growing list of unmanned systems. Every one of those programs is in political and operational favor right now.
The stock closed Friday at $665.26, well off its March high of $770. The average analyst price target sits at $701 across 16 covering analysts, and MarketBeat puts it at $720. That’s 6% to 8% upside before you factor in any beat-and-raise on Tuesday. If the report confirms strong bookings tied to Middle East demand, this one could run. Defense stocks aren’t sexy, but they tend to work in weeks like this one.
ConocoPhillips (COP)
Oil is the other obvious beneficiary of Sunday’s news. But buying Exxon or Chevron here is tough. Both are up more than 30% year to date and sitting near all-time highs. The easy money in the mega-caps was made months ago.
ConocoPhillips is a different story. It’s a pure-play upstream producer, meaning its profits move directly with the price of crude. No refining, no chemicals, no gas stations. Just oil and gas coming out of the ground. When WTI goes from $80 to $90, nobody benefits more per barrel than COP.
The stock closed Friday at $116.04 after dropping 4.55% in a single session, a notable move given how strong the overall market was last week. It’s pulled back from an early-April high of $136, giving you an entry that’s nearly 15% off the peak. On April 12, Jefferies analyst Lloyd Byrne raised his price target from $129 to $160, citing higher expected production volumes in the first quarter. Twenty-one analysts cover the stock with a Buy consensus. With oil spiking on the Iran news and COP trading at a discount to its recent highs, this one has real room to run.
Tesla (TSLA)
Here’s the higher-risk pick. Tesla reports Wednesday after the close, and Wall Street is split down the middle on what that report will look like.
The bull case got a big boost last week. On April 15, Tesla announced that its AI5 chip had successfully taped out, meaning the design is finalized and ready for production. The stock rallied on the news and kept running, closing Friday at $400.62. Elon Musk has been pitching Tesla as an AI and robotics company for years, and the AI5 chip is the first tangible proof that the pitch has real hardware behind it.
Wall Street consensus is looking for EPS of $0.37 on revenue of $22.7 billion, though Refinitiv’s Smart Estimate is more cautious at $0.30 EPS on $21.5 billion in revenue. Q1 deliveries came in soft, and margins remain the wild card. If guidance or commentary on Robotaxi, Optimus, or Full Self-Driving disappoints, the stock gets punished.
So this one comes with a warning. Tesla isn’t for the faint of heart. But if you’ve been waiting for a setup where the downside feels limited (the stock has already taken its beating) and the upside has a real catalyst (AI5 plus any hint of a Robotaxi timeline), this is your week to pay attention.
