Stocks Are Trading at Records—Strong Earnings Could Send Them Even Higher
S&P 500 companies are beating earnings expectations, with nearly 90% surpassing estimates, driven by strong tech sector results. The market reaction has been muted, but experts see opportunities in sectors like tech.
S&P 500 companies are handily beating earnings expectations, with nearly 90% surpassing estimates, compared to a 10-year average of 76%. Earnings have exceeded estimates by 11%, ahead of the 10-year average of 7%. The tech sector has driven this growth, with earnings increasing by 45%, more than twice the pace of the next-best sector. AI investment has fueled this growth, with companies like Taiwan Semiconductor Manufacturing Co. and ASML reporting strong results. Analysts have increased their estimates for tech sector earnings by 5% since January, with Big Tech companies expected to invest $680 billion this year, up 63% from last year. The market reaction has been muted, but experts see opportunities in the tech sector.
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