The inside story on earnings and revenue for S&P 500’s Big 6
In terms of valuation, the largest companies on the S&P 500 are Apple, Microsoft, Alphabet (Google), Amazon, Facebook and Tesla. These are the behemoths that have been helping to drive the U.S. stock market higher. Many of the tech companies permeate our lives and have become almost utility-like.
Amazon dominates the e-commerce space in North America (despite the earnings and incredible success of Canadian tech darling Shopify, which we looked at last week).
Neither is Tesla a stranger to this space. The star of the electric vehicle (EV) movement has impressive growth numbers and growth potential.
Trinity Asset Management offers tables for Big 6 earnings and revenue projections, and Barron’s recently looked at the Top 5, as reported in Seeking Alpha…
“All the above names are very volatile. In the earnings preview, to the mega-cap names, the trends were obvious. For the overall SP 500, the mega-cap names have not only market-cap influence, but “earnings weight” influence. As was written on this blog this weekend, the overall increases in forward SP 500 EPS and revenue estimates are substantial, not a s mall amount due to last week’s mega-cap earnings reports.”
Earnings growth has been more than impressive in this second quarter of 2021, though I have often pointed out this is likely the earnings peak for growth rates.
And from the tables offered in the Trinity link, you can see analysts are ratcheting up their revenue and earnings projections for most of the Big 6. Analysts do not see the growth and the dominance of mega companies ending any time soon. These companies are putting up big numbers and there are expectations that there is more to come.
The tables offer a sense of the potential for future growth; you can also get a sense of any change in sentiment from analysts, who feel that Amazon and Facebook offer the greater growth potential of the gang. I own Apple and I’m not surprised to see more modest growth projections. It is more than difficult for mega stocks to deliver mega growth. That said, I still love my Apple, as it offers a wonderful series of growing business lines that take the pressure off of iPhone sales.