Title: Tech Sector Forward Estimates Still Rising Despite Mag 7 Price Action
Despite recent price action from the Mag 7, the tech sector’s forward estimates are still on the rise. When looking at estimated earnings growth for full-year 2024 and 2025, the expected growth rates are trending upwards.
In 2024, the expected tech sector earnings growth has increased by about 3% since early April ’24, while in 2025, it has risen by 200 bps since the same time. For those interested in which sectors might outperform in 2025 due to rising sector earnings growth, check out the sectors that have seen growth since April ’24.
The Energy sector is expected to decline by 11% in 2024 but is projected to have a growth rate of 14% in 2025. Industrials are anticipating a much faster growth rate in 2025 compared to 2024, with a +16% expected growth. Health Care and Basic Materials sectors are also looking at significant growth in 2025 compared to 2024.
However, the tech sector’s expected growth in 2025 is almost similar to that of 2024, which could be why the Mag 7 and tech sector stocks have remained flat recently. While sector estimates are rising, the absolute change in expected tech sector earnings growth for 2025 is similar to 2024.
In conclusion, there is a positive outlook for 2025 in terms of S&P 500 EPS growth. With a potentially easier Federal Reserve and lower interest rates, interest rate-sensitive sectors may outperform. It’s important for investment advisors, fund managers, and individuals managing their own money to consider portfolio changes for 2025 based on these trends.
Analysis: This article highlights the rising trend in tech sector forward estimates and identifies sectors with potential for growth in 2025. It also points out sectors that are expected to see significant changes in growth rates compared to 2024. Understanding these trends can help individuals make informed decisions about their investments and financial strategies for the future.