Source: Wall Street News
Bank of America estimates that if the “Seven Sisters” are excluded, the profit of 493 other companies in the first quarter is expected to drop 6% year over year.
Tesla released its quarterly report overnight, kicking off the “Seven Sisters” earnings season for technology stocks. The market is focusing on the profits of these giants. This is not only critical to the technology sector, but also affects the heart of the US stock market.
According to DataTrek analyst Nick Colas, the profit increase of the “Seven Sisters” in the first quarter will reach 38% year-on-year, far exceeding the 2.4% growth rate expected by the S&P 500 index as a whole.
Without the “Seven Sisters,” S&P 500 earnings would fall into negative growth
Specifically, in the “Seven Sisters,” Colas expects Nvidia's profit to lead the other six companies. If Nvidia is excluded, the growth forecast for the “Seven Sisters” will drop to 23%. Tesla's profit is expected to decline, Apple's profit will rise slightly, and the other four companies will all have varying degrees of profit growth.
Colas also said that without the five companies Amazon, Google, Meta, Microsoft, and Nvidia, S&P's profit would fall 6.0% in the first quarter instead of the current 0.5% growth forecast.
Colas also pointed out that the remaining 495 companies “are expected to reach an inflection point later this year, thereby supporting current stock market valuations.”
Bank of America's related report also pointed out earlier that although the “Seven Sisters” profit growth is strong, its month-on-month growth rate is expected to slow down somewhat. The profits of 493 companies excluding the “Seven Sisters” are expected to drop 6% year over year.
Citi's estimates also show that without the contributions of the “Seven Sisters,” the overall return in the US market would fall by 14%.
The Bank of America team pointed out that although the “Seven Sisters” stock is still below the level of two weeks ago after Monday's rebound, it may rise further due to positive performance.
Regarding Tesla, Goldman Sachs said that despite strong skepticism about the company and the electric vehicle market in which it is located, many negative factors have already been priced by the market. Investors should pay attention to Tesla's potential for increased sales volume and declining gross margin in 2024.
edit/lambor