Morgan Stanley points to soaring S&P 500 profits, driven by technology and AI, offsetting concerns about war.

Morgan Stanley indicates that S&P 500 corporate earnings continue to rise, particularly in the technology sector, offsetting concerns over the Iran-Iran conflict. Meanwhile, accelerating investment in AI supports the market's earnings outlook in the coming period.

On May 4, 2569 at 16.06:XNUMX a.m., Bloomberg News reported that A strategist from Morgan Stanley. specify that Strong earnings reports from U.S. companies, particularly in the technology sector, are helping to alleviate investor concerns about the potential impact of conflicts in the Middle East on stock markets.

The analysis team is led by Michael Wilson. Specified in the report Earnings estimates for companies in the S&P 500 index have been revised upwards on several occasions in recent months, with second-quarter estimates rising 2%, while earnings forecasts for 2026 and the next 12 months have increased by 3% and 4%, respectively.

The first-quarter earnings season delivered strong results, with S&P 500 companies reporting an average earnings per share (EPS) 6% higher than expected, the highest in four years.

Hyperscalers and semiconductor manufacturers are key drivers of this strength, driven by rapidly increasing demand for cloud services and continued high order levels. However, growth is not limited to the technology sector alone, as upward revisions in earnings forecasts are also seen across the financial, industrial, and cyclical consumer goods sectors, reflecting broader profit expansion.

Regarding the risk of war with Iran. Analyst I think that The impact is more company-specific than systemic, with increased costs affecting individual companies differently. Meanwhile, the energy sector benefits from higher oil prices, boosting overall market profits.

Even though earnings remain strong and the U.S. stock market is at record highs, concentration risk remains a concern for investors, with just seven stocks generating approximately 80% of the S&P 500 index's returns since the beginning of the year.

meanwhile Strategists from Goldman Sachs Group Inc., led by Ben Snider. specify that Investment in AI infrastructure shows no signs of slowing down, with analysts consistently revising upward their spending estimates for large technology companies since the start of earnings season.

“Rising spending estimates are driving upward revisions in earnings estimates for AI infrastructure companies, boosting overall market earnings prospects and increasing the likelihood of positive EPS risk for the S&P 500.” The analysis team stated that...

refer : www.bloomberg.com

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