Earnings season for the U.S. market is currently underway, with about a quarter of S&P 500 companies having reported earnings. According to FactSet data, 88% of S&P 500 companies have reported earnings above Wall Street estimates while 86% have beaten revenue estimates.

The blended net profit margin for the S&P 500 for the quarter has clocked in at 12.4%, well above the five-year average net profit margin of 10.8% and on track for the second-highest clip after last quarter’s 12.8%, the highest on record since the last financial crisis. The blended metric combines actual results for companies that have reported and estimated results for companies that have yet to report.

Judging from early looks, this earnings season is set to become yet another blowout.

However, history has taught us that each earnings season comes with its quirks--for better or worse--and this season’s bogeyman is rising inflation. Higher inflation is usually negative for stocks because it increases borrowing costs, increases input costs and reduces standards of living. More importantly in this market, it reduces expectations of earnings growth, and can put serious downward pressure on stock prices.

Here are some interesting cases this earnings season.

#1. Apple

With a market capitalization of $2.44T, Apple Inc. (NASDAQ:AAPL) is the world’s most valuable company in terms of market capitalization. It’s therefore not a surprise that the Cupertino-based company is one of the most heavily-watched companies, and can sometimes spring surprises when you least expect it.

That’s exactly what has happened this earnings season.

AAPL stock has been sliding after the company beat on both top-and bottom-line expectations--but failed to provide concrete guidance. On Tuesday, the tech bellwether reported third-quarter earnings and revenue that surpassed Wall Street analysts' expectations with sales rising across all its major business lines.

Apple earned $1.30 a share on $81.4 billion in revenue, comfortably topping analysts' forecasts for earnings of $1.01 a share, on sales of $73.5 billion. That marks major growth compared to EPS of  65 cents a share and revenue of  $59.7 billion in last year’s comparable quarter.

Virtually all the company's segments performed beyond expectations:

• iPhone $39.57B vs. $34.56B consensus.
• Mac $8.24B vs. $7.99B consensus.
• iPad $7.37B vs. $7.13B consensus.
• Wearables, Home and Accessories $8.8B vs. $7.63B consensus.
• Services $17.48B vs. $16.32B consensus.

For most companies, that would have sufficed as a very successful quarter.

Unfortunately, AAPL stock has been struggling after the company provided rather ambiguous guidance.

Citi, which maintains its Buy rating on the stock and a $170 price target, said Apple beat across every metric, but there were nagging concerns:

"In fact, it was almost the perfect quarter except for two items, which are 1) no guidance for the September quarter and 2) commentary during the conference call that the September quarter will see services growth closer to normal due to above normal June quarter strength, lingering supply chain issues, and 3pts of revenue headwind from FX," analyst Jim Suva writes in a note today.

Suva notes that Apple said sales would grow double digits in the September quarter but less than the +36%-- essentially a very wide range.

Credit Suisse also has its concerns:

"The business continues to execute well, with broad-based strength across the portfolio led by outsize iPhone growth in the early innings of 5G and Services monetization," analyst Matthew Cabral writes. "That said, with the stock sitting at 26x Street CY22 EPS (in-line with Services peers) vs. increasingly tough comps as (1) iPhone upgrades and ASPs /mix normalize and 5G becomes more mainstream (2) App Store (~1/3 of of Services, per CSe) slows post-COVID and (3) iPad, Mac demand fades."

AAPL shares have dropped 2.7% post-earnings.

#2. Qualcomm

Like Apple, mobile tech company Qualcomm Inc.(NASDAQ:QCOM) reported upbeat second quarter earnings.

Non-GAAP EPS of $1.92 beats by $0.24; GAAP EPS of $1.77 beats by $0.40. Meanwhile, revenue of $8.06B (+64.5% Y/Y) beats by $500M.

As a predominantly mobile chip manufacturer, Qualcomm has been clearly benefiting from the global chip shortage and reported that its chips not only go into cellphones but also cars and much more.

Further, QCOM executives said the company is significantly improving its access to foundries during a global semiconductor shortage in which capacity constraints have hampered the sector.

“Given the advantage of our scale, we were able to take our technology then move it into foundries where there was some available capacity, and we’ve been investing in that over the last several months,” Qualcomm QCOM, 5.80% Chief Financial Officer Akash Palkhiwala told MarketWatch in an interview. “And what you’re now seeing is the benefit of us being able to tap into available capacity at several suppliers.”

Also, unlike Apple, Qualcomm provided definitive guidance saying it sees Q4 revenue of $8.4B-$9.2B vs. consensus of $8.54B and non-GAAP EPS of $2.15-$2.35 vs. $2.07 consensus estimate.

QCOM shares have jumped 7% since the earnings call.

#3. Tencent

Unlike the other two tech giants, Tencent Holdings (OTCPK:TCEHY) has made it on this list not because of some sort of earnings feat but rather due to the extraordinary circumstances surrounding the company's latest stock movements.

Over the past few months, sweeping crackdowns across diverse sectors of the Chinese economy have been sending shockwaves across global financial markets, with American investors finding themselves in the firing line of some of the hottest sectors.

First off, Beijing started cracking down on the crypto space, curbing bitcoin mining due to concerns of excess speculation and warning financial institutions against offering crypto services. 

Regulators then cracked down on Chinese ride-hailing giant Didi Global Inc. (NYSE:DIDI) for alleged data security violations. Chinese consumers have grown increasingly privacy conscious in recent years, and Beijing appears to be taking steps to safeguard platforms like Didi’s that handle sensitive information such as locations. 

A few days ago, China's antitrust administrator ordered Tencent Music Entertainment (NYSE:TME)) to give its exclusive music licensing rights for online music. China's State Administration for Market Regulation or SAMR ordered Tencent Music to follow the authority's ruling within 30 days, according to SAMR's website (Google translated). Tencent Music was also ordered to put an end to requirements for copyright holders to give better treatment to TME than competitors.

Beijing’s unprecedented crackdown on its technology industry has turned Tencent Holdings Ltd. from a market darling into the world’s biggest stock loser this month., with TCEHY stock tumbling 23% in July as of Wednesday and erasing about $170 billion off its market value. 

The authorities finally appear to have realized that running roughshod over homegrown global icons is not exactly the best way to instill confidence in its budding international securities market and have been urging calm and even reassuring investors that the markets would gradually stabilize.

This appears to be working for the wider Chinese market, with major ETFs such as the iShares China Large-Cap ETF (NYSEARCA:FXI), the iShares MSCI China ETF (NASDAQ:MCHI) and the Invesco Golden Dragon China Portfolio ETF (NASDAQ:PGJ) staging a strong recovery.

Unfortunately, Tencent investors are not buying it and TCEHY stock has barely budged.