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Technology stocks, including chipmakers, have led the recent rally in U.S. stocks, as this earnings season delivered results that challenge AI skeptics and reward investors positioned for continued demand.
Nearly all of the S&P 500’s members have reported earnings for the latest quarter, and 84% of those companies beat analysts’ earnings expectations, according to DataTrek’s Nicholas Colas and Jessica Rabe. That beat rate is higher than the one-, five- and 10-year averages. Under the hood, the technology sector logged beats at a 94% clip, helping explain why stocks have been rising.
The benchmark S&P 500 is up 16% since the end of March, while the so-called Magnificent Seven— the largest stocks in the S&P—have climbed more than 25%.
Wedbush’s Dan Ives described the season as a “wake up call” for tech skeptics on the sidelines of the AI revolution. In his view, the results suggest “AI adoption is underway,” with demand remaining elevated for chips and other hardware, as well as software. Ives said the data is a “bright green light” to own core tech winners into year-end.
For investors, the key question is whether the market’s advance can continue after a strong run. Some experts have raised concerns about the S&P 500’s climb, but AI skeptics who stayed out of tech stocks over the past few weeks have missed substantial gains.
Morgan Stanley pointed to earnings strength as a factor supporting the rally. In a report Monday, the firm’s equity strategy team led by Michael Wilson wrote that “Fundamental strength continues in US earnings.”
Morgan Stanley said Mag 7 earnings are now expected to grow 34% this year, while the rest of the 493 S&P constituents are projected to see EPS growth of 13%. The firm suggested this could be an indication that the benchmark index may keep running.
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
