UBS Equities-US Equity Strategy _2Q25 Earnings Brief August 28_ Simonds-117503172

ab28 August 2025Global ResearchUS Equity Strategy2Q25 Earnings Brief: August 28Yesterday, NVDA reported 1Q results. Year over year sales growth for NVDA was 55.6% while earnings increased 53.1% (sales surprise: 1.6%; earnings surprise: 4.2%) (link). With 96.2% of the S&P 500's market cap reported, this will be the last earnings brief for this earnings season. 2Q expectations are for revenues to grow 6.1% and EPS by 11.3%. 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+: 27.2%
Financials: 20.4%
Non-Cyclicals: 1.6%
Cyclicals ex-Energy: 0.3%
Energy: -18.5%The 6 largest TECH+ companies are expected to outgrow the rest of the market as a group (EPS Growth 28.8% vs. 6.9%), 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: 12.1%
AMZN – 2Q25E: 5.3%; 2Q25A: 33.3%
NVDA – 2Q25E: 48.2%; 2Q25A: 54.4%Earnings are beating estimates by 7.7% in aggregate, with 74% of companies so far topping projections. Over the next 5 trading days, 12 companies representing 1.0% of the S&P 500's market cap will report results, including Dell Technologies, Dollar General, Salesforce, Copart and Hewlett Packard.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 20. 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 28 August 2025ab 2US Equity StrategyUBS ResearchS&P 500Figure 1: S&P 500 EPS Growth 11.68.914.310.62Q243Q244Q241Q252Q25E%Current ConsensusForecast11.3Source: Standard & Poor’s, Refinitiv, FactSet, UBS Figure 2: S&P 500 EPS Growth - Impact from TECH+6.36.56.87.96.92Q243Q244Q241Q252Q25E%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+2Q EPS Growth is now 11.3% YoY TECH+ has had an outsized impact on S&P 500 EPS growth over the past yearUS Equity Strategy 28 August 2025ab 3S&P 500 Figure 3: 2Q25 Earnings Dashboard – S&P 500Weighted Growth YoY (%)RevenueMarginsEarningsBuybacksEPSS&P 5006.14.510.60.711.3TECH+14.713.027.7-0.527.2Big 6 TECH+17.112.229.2-0.528.8Rest of TECH+11.413.224.6-0.524.1Cyclicals0.3