AI-Summary – News For Tomorrow
With Q3 earnings season approaching, analysts are raising EPS estimates for S&P 500 companies, especially in Information Technology and Communication Services. ETFs like QQQ and QQQM, heavily weighted towards these sectors, could benefit. Tech stocks NVDA and AVGO’s recent strong reports hint at positive earnings. FactSet’s John Butters notes that while tech and communication services see EPS estimate increases, healthcare faces decreases. QQQ and QQQM’s significant exposure to tech (79%) and limited healthcare allocation (4.50%) further supports their potential for a successful earnings season.
News summary provided by Gemini AI.
September is the final month of the third quarter, meaning another earnings season is right around the corner. It could be a banner one, because data indicates analysts have been boosting earnings per share (EPS) for S&P 500 member firms at a notable rate.
Investors looking for ETFs with which to play what could be a stellar batch of quarterly updates may want to consider the (QQQ ) and the (QQQM ). (NVDA) fiscal Q2 earnings out last month and (AVGO) report out last week could be signs those funds will be earnings season winners. Those two semiconductor stocks combine for nearly 15% of the funds’ rosters.
“At the sector level, five of the eleven sectors witnessed an increase in their bottom-up EPS estimate for Q3 2025 from June 30 to August 28, led by the Information Technology (4.0%), and Communication Services (+2.6%) sectors,” noted John Butters of FactSet. “On the other hand, five sectors recorded a decrease in their bottom-up EPS estimate for Q3 2025 during this period, led by the Health Care (-7.2%) sector. One sector (Utilities) recorded no change (0%) in its bottom-up EPS estimate for Q3 2025 during this period.”
The sector notes are pertinent. That’s because QQQ and QQQM devote about 79% of their lineups to tech and communication services stocks. The healthcare sector, a potential EPS offender, represents just 4.50% of the ETFs’ portfolios.
“At the sector level, seven sectors witnessed an increase in their bottom-up EPS estimate for CY 2025 from June 30 to August 28, led by the Communication Services (+ 4.0%), Financials (+ 3.3%), and Consumer Discretionary (+ 3.0%) sectors,” added Butters.” On the other hand, three sectors recorded a decrease in their bottom-up EPS estimate for CY 2025 during this period, led by the Health Care (-2.1%) sector. One sector (Real Estate) recorded no change (0%) in its bottom-up EPS estimate for CY 2025 during this period.”
