Tesla announced its quarterly results overnight, kicking off the earnings season of the "Seven Sisters" of technology stocks, and the market is focusing on the earnings of these giants, which is not only crucial for the technology sector, but also affects the heart of the U.S. stock market.
According to DataTrek analyst Nick Colas, the Seven Sisters' first-quarter profit growth rate will reach 38% year-on-year, far exceeding the 2.4% growth expected by the S&P 500 as a whole.
Without the "Seven Sisters", the S&P 500's earnings would fall into negative growth
Specifically, among the "Seven Sisters", Colas expects Nvidia's earnings to lead the other six companies, and if Nvidia is excluded, the growth expectation for the "Seven Sisters" will drop to 23%. Tesla's earnings are expected to decline, Apple's earnings will rise slightly, and the other four companies will all have varying degrees of earnings growth.
Colas also said that without Amazon, Google, Meta, Microsoft and Nvidia, S&P's earnings would have fallen 6.0% in the first quarter, rather than the current 0.5% growth forecast.
Colas also noted that the remaining 495 companies "are on track to see an inflection point later this year, supporting current equity market valuations."
BofA's related report also pointed out that despite the strong earnings growth of the "Seven Sisters", its sequential growth rate is expected to slow. Earnings of 493 companies, excluding the Seven Sisters, are expected to fall 6% year-on-year.
Wall Street News previously mentioned that Citi's calculations also show that without the contribution of the "Seven Sisters", the overall return of the US market would have fallen by 14%.
The BofA team noted that although the shares of the Seven Sisters are still below the levels of two weeks ago after Monday's rally, they may rise further due to the positive results.
For Tesla, Goldman Sachs said that despite the scepticism about the company and the electric vehicle market in which it operates, many negative factors have been priced in. Investors should pay attention to Tesla's sales growth potential in 2024 as well as the decline in gross margin.
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