Prominent tech analyst Dan Ives is predicting a “very strong” third-quarter earnings season for tech stocks, suggesting the results will “match/exceed the AI hype.”
His bullish outlook, driven by robust AI demand in cloud stalwarts, is complemented by a market analysis indicating that the broader market impact from tariffs will be less severe than previously feared.
Q3 Tech Earnings Will ‘Exceed The AI Hype’
Ives, the Global Head of Tech Research at Wedbush Securities, stated in a post on X that Big Tech companies like Microsoft Corp., Alphabet Inc., and Amazon.com Inc. experienced “very robust AI enterprise demand in the quarter based on our field checks.”
Tariff Impact In Q3 To Be ‘Much Less Than Anticipated’
This sentiment is echoed in a recent analysis from LPL Financial, which projects that corporate America is set for another good earnings season following an outstanding second quarter.
The report, authored by Chief Equity Strategist Jeffrey Buchbinder, argues that a “Tariff-driven slowdown [is] unlikely to hurt Q3 earnings growth much.”
While tariff costs have increased, the LPL report notes that at a macro level, “the effects have been much less than we, and most analysts, anticipated”. This resilience is attributed to several factors, including tariff mitigation measures, a surge in AI investment, and a weaker U.S. dollar.
See Also: Jensen Huang Drops Bombshell Warning: Nvidia’s Guidance Assumes ‘China Zero’ — Says US Could ‘Hurt American Companies Worse’ With Total Tech Ban
Mag 7 To Drive The Q3 Earnings Season
The Magnificent 7 are once again expected to be a significant driver of market performance. According to LPL’s research, 70% of the S&P 500’s expected 8% earnings growth will come from the six largest technology companies, which include the Magnificent Seven excluding Tesla Inc. (NASDAQ:TSLA).
This concentration of growth underpins LPL’s continued preference for large-cap growth stocks over their value counterparts.
Looking ahead, LPL suggests that the combination of AI investment, resulting productivity gains, and supportive fiscal policy could “potentially enable earnings to grow at a double-digit clip in 2026 and keep this bull market well supported”.
For the third quarter, the firm believes corporate America has an “excellent opportunity to post another low-teens earnings growth rate for the S&P 500”.
Price Action
Here is the list of Mag 7 stocks and their performance in 2025.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Wednesday. The SPY was up 0.60% at $673.11, while the QQQ advanced 1.15% to $611.44, according to Benzinga Pro data.
The futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading higher on Thursday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Chung Hao Lee / Shutterstock
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