world-economy

Analyst Sees Opportunity Beyond AI Trade as Q2 Earnings Season Approaches

Wall Street analysts are lifting earnings expectations for stocks trading at reduced valuations ahead of second-quarter earnings season. S&P 500 earnings per share are forecast to rise 22% year-over-year, marking the strongest growth since the post-pandemic period, according to HSBC Global Investment Research. Energy and information technology sectors are expected to lead with EPS growth of 122% and 61% respectively. The Mag 7 companies—Amazon, Alphabet, Microsoft, Tesla, Nvidia, Meta Platforms and Apple—are projected to post roughly 30% earnings growth. Beyond the concentrated AI trade, HSBC identifies opportunities in sectors benefiting from tariff refunds and FIFA World Cup-related spending. Healthcare represents the only sector expecting weaker earnings, though analysts note potential upside from depressed expectations. Outside energy and tech hardware, broader earnings growth is forecast at approximately 5%.