US Equity Strategy_Big 6 _ Mag 7 Stock Impact on Market

Summary of US Equity Strategy Conference Call Company and Industry - The report focuses on the US Equity Market, particularly the Big 6 / Magnificent 7 technology stocks, including Nvidia, Amazon, Tesla, Meta, Alphabet, Microsoft, and Apple [9][10]. Core Insights and Arguments - Earnings Forecasts: The report highlights strong earnings forecasts for the TECH+ sector, with significant revisions expected for 2025. The Big 6 / Magnificent 7 stocks are projected to have a positive impact on the broader market [9][10]. - EPS Revisions: - Nvidia: EPS growth estimates for 2024 are at 6.4%, with a significant increase to 14.7% for 2025. - Amazon: EPS growth is expected to be 11.4% in 2024 and 8.3% in 2025. - Tesla: EPS growth is projected at 10.4% for 2024 and 6.0% for 2025. - Meta: EPS growth is forecasted at 5.0% for 2024 and 3.7% for 2025. - Alphabet: EPS growth is expected to be 3.6% in 2024 and 2.0% in 2025. - Microsoft: EPS is expected to decline by 0.5% in 2024 and 1.4% in 2025. - Apple: EPS is projected to decline by 2.0% in 2024 and 3.3% in 2025 [10]. - Market Divergence: There is a notable divergence between the largest stocks and the rest of the TECH+ sector, indicating that the performance of the Big 6 is significantly better than the broader market [11]. Additional Important Insights - Total Return: The Big 6 TECH+ stocks have shown a total return of 17.7% over the last three months, while the S&P 500 has returned 10.2% [32]. - Valuation Metrics: - Nvidia has a forward P/E ratio of 31.4, while Tesla is an outlier at 122.3. - The Big 6 TECH+ stocks trade at a reasonable premium of 29.6 compared to the S&P 500 at 22.1 [33]. - Earnings Weight: The Big 6 TECH+ stocks account for 67.3% of earnings in the TECH+ sector, while the rest contribute only 32.7% [21]. Conclusion - The US Equity Strategy report emphasizes the strong performance and growth potential of the Big 6 / Magnificent 7 technology stocks, highlighting their significant impact on the overall market. The divergence in performance between these stocks and the broader market suggests potential investment opportunities within this sector [9][10][11].