UBS Equities-US Equity Strategy _2Q25 Earnings Brief July 31_ Simonds-116900406

ab31 July 2025Global ResearchUS Equity Strategy2Q25 Earnings Brief: July 31Yesterday, META reported 2Q results beating consensus expectations overall (sales surprise: 6.1%; earnings surprise: +20.4%) and raising the low end of CapEx guidance to $66B-$72B from $64B-$72B (link). Microsoft also beat consensus 2Q expectations (sales surprise: 3.6%; earnings surprise: +8.3%) and surprised significantly in its cloud computing unit. 52.0% of the S&P 500's market cap has reported. 2Q expectations are for revenues to grow 4.9% and EPS by 7.7%. Projected EPS growth among groups varies significantly, as shown below (a blend of consensus estimates and reported results where available): Expected EPS Growth YoY
TECH+: 21.0%
Financials: 18.7%
Non-Cyclicals: -2.2%
Cyclicals ex-Energy: -0.7%
Energy: -22.3%The 6 largest TECH+ companies are expected to outgrow the rest of the market as a group (EPS Growth 22.2% vs. 4.0%), though results vary for each company:Big 6 TECH+ EPS Growth (Expected vs. Actual, YoY)
GOOGL – 2Q25E: 15.5%; 2Q25A: 22.2%
META – 2Q25E: 15.0%; 2Q25A: 38.4%
MSFT – 2Q25E: 14.2%; 2Q25A: 23.7%
AAPL – 2Q25E: 2.4%; 2Q25A: Thursday 07/31
AMZN – 2Q25E: 5.3%; 2Q25A: Thursday 07/31
NVDA – 2Q25E: 46.4%; 2Q25A: Wednesday 08/27Earnings are beating estimates by 7.1% in aggregate, with 75% of companies so far topping projections. EPS is on pace for 8.3%, assuming the historical trend of estimate revisions through the end of reporting season.Over the next 5 trading days, 156 companies representing 28.1% of the S&P 500's market cap will report results, including Apple, Amazon, Exxon Mobil, Berkshire Hathaway, AMD and Walt Disney.This report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES, including information on the Quantitative Research Review published by UBS, begin on page 19. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.Equity StrategyAmericasSean SimondsStrategistsean.simonds@ubs.com+1-212-713 2851Maxwell Grinacoff, CFAStrategistmaxwell.grinacoff@ubs.com+1-212-713 3892Andrew GarthwaiteStrategistandrew.garthwaite@ubs.com+44-20-7567 4343Gerry FowlerStrategistgerry.fowler@ubs.com+44-20-7567 5490US Equity Strategy 31 July 2025ab 2US Equity StrategyUBS ResearchS&P 500Figure 1: S&P 500 EPS Growth 11.68.914.310.62Q243Q244Q241Q252Q25E%Current ConsensusForecastExpected Final Reported Growth8.37.7Source: Standard & Poor’s, Refinitiv, FactSet, UBS Figure 2: S&P 500 EPS Growth - Impact from TECH+6.36.56.87.95.82Q243Q244Q241Q252Q25E%Source: Standard & Poor’s, Refinitiv, FactSet, UBS Note: Impact calculated as difference in EPS growth between S&P 500 and S&P 500 ex-TECH+Assuming revisions follow the typical pattern, we expect 2Q EPS growth to finish close