Abu Dhabi, United Arab Emirates – November 4, 2025 eToro US Investments and Options Analyst Brett Kenwell provided insight into the latest US earnings season, highlighting the strong performance of major technology companies, sector-specific trends, and continued AI investment.
Main earnings highlights
“Last week was a significant earnings week, with more than 40% of the S&P 500 market capitalization reporting, including five of the seven Magnificent stocks. So far, more than 80% of S&P 500 companies have exceeded analyst earnings estimates, achieving 13% year-over-year growth, nearly double the initial consensus estimate,” Kenwell said.
sector performance
- Main areas:More than 90% of companies exceeded earnings estimates in daily necessities, energy, and healthcare.
- lagging sectors: Consumer goods, communications, and materials recorded the lowest earnings beat rates this season.
Amazon’s strong rise
Amazon has emerged as a standout, rising about 10% to a record high on better-than-expected earnings and earnings. Investors responded positively to Amazon Web Services (AWS)’s solid guidance and strong performance. This follows Amazon’s status as the worst-performing Magnificent 7 stock of 2025 until Friday’s rally.
AI investment momentum
AI-related spending remains a key growth driver.
- Alphabet and Meta raised their full-year capital spending forecasts, with Meta expecting significant increases in 2026 compared to 2025.
- Microsoft reported quarterly capital spending of nearly $35 billion, beating Wall Street expectations, and CFO Amy Hood reported that she expects capital spending growth to be higher in 2026 than in 2025.
“Investment in AI infrastructure is booming. Recent deals and partnerships highlight the continued importance of AI, now reinforced by tangible investment numbers,” Kenwell added.
Considerations for investors
Tech stocks have outperformed this year, rising more than 30% versus the S&P 500’s 16.5% rise, but the reaction to the earnings of the Magnificent Seven has been mixed. Investors should keep an eye on the earnings of companies like Palantir, Advanced Micro Devices, and Uber, which could influence near-term market sentiment. Any notable change in sentiment could lead to market volatility as the Fed adjusts its expectations around a possible December rate cut.
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