In the midst of monetary policy, geopolitical risks, and the uncertainty of the upcoming US presidential election, the third quarter earnings season has officially begun. As the third quarter earnings season kicks off, the US stock market also celebrates its bull market's second anniversary,$S&P 500 Index (.SPX.US)$setting a new high for the 45th time this year, and for the first time in history crossing the milestone of 5800 points.

Looking ahead to this earnings season, global investors once again turn their focus on the technology magnificent 7 in the US stock market—$Apple (AAPL.US)$,$Microsoft (MSFT.US)$,$Alphabet-C (GOOG.US)$,$Amazon (AMZN.US)$,$NVIDIA (NVDA.US)$,$Meta Platforms (META.US)$And.$Tesla (TSLA.US)$The market hopes to find clues from these companies to determine when the substantial investments can see returns.

According to analysts' consensus expectations, Futu News has compiled performance forecasts for large technology stocks in the market for Mooer reference:

It is worth noting that this quarter has a new situation, namely Wall Street analysts expect this quarter to have the slowest earnings growth rate in nearly a year. The expected profit growth rate of the S&P 500 Index is only expected to increase by 4.3% from the previous year. In the first three quarters of this year, this growth rate reached 9.8%, 13.1%, and 11.2% respectively.

This is not entirely a bad thing. Lower expectations may actually provide more room for positive surprises, similar to when the same group of analysts had forecasted a profit growth rate of only 3.8% for the U.S. stock market in the first quarter of this year, which ended up doubling.

Baird investment strategist Ross Mayfield also stated: "Analysts' downward revisions to earnings expectations are larger than usual, which may increase the likelihood of exceeding expectations, leading to better stock market performance.

Over the past two years, the explosive development of AI has driven earnings growth and has become a major driver of the rise in the U.S. stock market.

From current institutional forecasts, technology and communication technology are expected to be the fastest-growing sectors in the previous quarter. Industry leader Nvidia continues to strive to meet the strong demand for its AI chips, with CEO Huang Renxun stating earlier this month that the external demand for its next-generation AI chip, Blackwell, is "crazy," and the company's stock price is poised to reach a historic high this week.

Market expectations, the third-quarter profit of the "magnificent 7" in the US stock market is expected to increase by 18%. However, data from Bloomberg Intelligence shows that the problem lies in the profit growth rate of these technology giants slowing down, lower than the 30% or more in 2023.

The sustainability of companies' enthusiasm is under scrutiny, especially in terms of technology costs and return on investment. When asked about their ai expenditures in July, Google CEO Sundar Pichai said: "For us, the risk of underestimating investment far outweighs the risk of overinvestment" because this technology has the potential to change the way we work.

Goldman Sachs recently released a report stating that discussions in the market have become more nuanced. There is a prisoner's dilemma where despite the lack of clear income prospects, some companies feel compelled to invest in this technology. Relatively, investors currently prefer growth stocks at the top of the industry.

Editor/Somer