Tech sector continues to see double-digit growth with companies like Alphabet, Microsoft, and Meta Platforms investing heavily in AI infrastructure.

From Nasdaq: 2025-02-06 03:20:00

In the 2024 Q4 earnings season, 245 S&P 500 companies reported a +11.6% increase in total earnings from the previous year, with 80.0% beating EPS estimates. The Tech sector saw a +23.2% increase in earnings, with companies like Alphabet, Microsoft, and Meta Platforms continuing to invest heavily in AI infrastructure.

Alphabet plans to increase its capex spending by +47% to $75 billion, while Microsoft and Meta also have aggressive spending plans. Despite market disappointment, these companies remain profitable, with Alphabet’s Q4 earnings up +28.3% and Microsoft’s up +10.2%.

Tech sector earnings are expected to rise +23.3% in the 2024 Q4, continuing a trend of double-digit growth. The sector’s earnings outlook is steadily improving, with revisions for Q4 and full year 2025 showing positive trends. Overall, the Tech sector is expected to remain a key growth driver.

Total S&P 500 earnings for 2025 Q1 are projected to increase by 8.8% from the previous year, with a broad-based revisions trend. Despite challenges in some sectors like Conglomerates and Autos, double-digit earnings growth is expected across all 16 Zacks sectors in 2025, signaling a positive outlook for the market.

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Read more at Nasdaq: Zacks Earnings Trends Highlights: Alphabet, Microsoft and Meta Platforms