The significance of Big Tech earnings for the market rally depicted in one chart

Big Tech companies expected to drive Q4 earnings growth for S&P 500
As earnings season continues, new data from FactSet show that Big Tech companies are expected to drive fourth-quarter earnings growth for the S&P 500. Earnings for Apple, Alphabet, Microsoft, Amazon, Meta, and Nvidia are forecasted to grow a combined 53.7% in the fourth quarter, while the other 494 companies in the S&P 500 are expected to see a 10.5% decline.
With five of these companies set to report quarterly results this week, expectations are high, with NVIDIA projected to grow earnings per share by more than 400% compared to the prior year. As the market reacts to these reports, the performance of these tech giants will be critical for overall market direction.
This surge in earnings for the largest stocks is expected to continue into the first quarter of 2024, with Amazon, Alphabet, Meta, and Nvidia projected to grow earnings by nearly 80%. Their outsized performance compared to the rest of the market has led some on Wall Street to believe that the S&P 500 may not be overvalued, despite hitting all-time highs.
Investors are closely watching these earnings reports as they account for a significant portion of the market’s recent growth. But these expectations go beyond just the numbers, as they are also essential for updates on various market-moving narratives for each company.
All eyes will be on tech earnings in the coming weeks, not only for their expected outperformance but also for the potential implications of their results on the broader market. Apart from driving market growth, these earnings reports will be integral in providing insights into the state of consumer spending and economic activity.

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