JPMorgan Projects Significant Q4 Profit Growth for “Magnificent Seven” Stocks

JPMorgan forecasts that the “Magnificent Seven” stocks on the U.S. market, including Apple (AAPL, Financial), Microsoft (MSFT), Amazon (AMZN), NVIDIA (NVDA), among others, are expected to achieve a 22% profit growth in Q4. This growth rate will drive the S&P 500’s overall profits beyond analysts’ expectations. Removing these seven companies, S&P 500’s profit is projected to grow by just 5%, narrowing the gap between the two figures.

The Q4 earnings season has begun, and market attention is increasingly on profit performance. Despite conservative market expectations, analyst Mislav Matejka suggests that surprises may still come from these leading stocks, which have exceeded forecasts for seven consecutive quarters. Although growth has slowed compared to previous quarters, the absolute profit growth remains significant.

JPMorgan has revised down the S&P 500’s Q4 profit growth expectations over recent months to 8% from 18% predicted at the beginning of the year. This conservative outlook could positively impact the market, driven by robust U.S. economic activity and typical seasonal benefits in Q4, potentially exceeding market expectations.

The report also highlights the resilience of the U.S. economy, projecting a 2-3% real GDP growth in 2025, outpacing Europe’s 1%. This economic resilience supports U.S. profit growth. Contrary to the U.S., the European market faces a bleak outlook, with the Stoxx 600 index profits expected to decline by 1% in Q4.