Reuters: Analysts Forecast 31% S&P 500 Earnings Growth in Q3, Driven by AI Giants
AI giants drive most of the expected S&P 500 earnings growth for Q3, but slowing momentum raises peak concerns.
ImportanceStructuralEvidenceE3 inspectableWrite-upStandard
According to Reuters, data from LSEG shows analysts expect S&P 500 companies' Q3 earnings to grow approximately 31% year-over-year.
About two-thirds of this increase is attributed to the technology sector, including AI giants like Alphabet, Amazon, and Meta. This contrasts with Q2 earnings growth of nearly 54%, the highest since 2021. Even excluding market value revaluation gains, Q2 growth remained at about 35%.
In specific sectors, US semiconductor companies are expected to see Q3 earnings grow by about 136%, down from approximately 158% in Q2. Wells Fargo noted that it would not be surprising if tech and AI contributed 70% to 80% of the growth.
Anthony Saglimbene, Chief Market Strategist at Ameriprise Financial, warned that investors fear this earnings growth cycle is nearing its peak. The AI investment boom relies on continued massive capital expenditure by companies, leading to stricter scrutiny of performance as quarterly spending increases.