1 Number Every Investor Needs to Look For When Nvidia, Alphabet, and Amazon Report Earnings, Whether You Own the Stocks or Not
This key source of income accounts for a huge amount of earnings for the entire S&P 500.
Overview
Analysts are projecting phenomenal earnings growth for the S&P 500 (SNPINDEX: ^GSPC) in both the near and long term. The second-quarter consensus earnings growth estimate is 23.6%. They expect 25.1% earnings growth for the full year. And over the next five years, analysts expect average earnings growth of 24.9%.
Those forecasts are being driven by booming earnings for some of the biggest companies in the index, including Nvidia (NASDAQ: NVDA), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Amazon (NASDAQ: AMZN). All three companies are seeing very strong revenue and earnings growth as demand for AI compute has continued to outpace their ability to increase supply, producing earnings results that have often exceeded analysts' high expectations.
Details
Those results have helped many investors justify the S&P 500's high valuation. In fact, the S&P 500 forward P/E ratio has declined despite stocks rising this year, as analysts raise their earnings outlook for the index. But there's a key number to watch in these big companies' quarterly reports that might make their earnings look better than they actually are.
Source
Originally published at www.fool.com.