Briefing.com Summary:
- Amazon, Apple, and NVIDIA are setting the pace for a higher open.
- One takeaway on the other side of the mega-cap reports is that the AI investment cycle is still booming.
- The third-quarter blended earnings growth rate has jumped to 10.6% from 7.0% at the end of the second quarter.
There was a dose of mega-cap weakness on Thursday that dragged the major indices lower, but the tables have turned this morning, and now there is a dose of mega-cap strength that is pushing the major indices higher.
Currently, the S&P 500 futures are up 54 points and are trading 0.8% above fair value, the Nasdaq 100 futures are up 343 points and are trading 1.4% above fair value, and the Dow Jones Industrial Average futures are up 75 points and are trading 0.2% above fair value.
It isn’t hard to see why the market’s fortunes have changed. Amazon.com (AMZN) is up 13% after its earnings report, Apple (AAPL) is up 2.0% after its earnings report, and NVIDIA (NVDA) is up 2.0% on news of a multi-billion-dollar partnership with SK, Samsung, and Hyundai.
There are other high-profile names like Coinbase Global (COIN), Reddit (RDDT), Western Digital (WDC), Strategy (MSTR), and Twilio (TWLO) that are trading notably higher after their earnings reports. For good measure, Netflix (NFLX) is up 1.2% after announcing a 10-for-1 stock split.
The point being is that there is still a lot of energy in the growth stocks, and that energy is fueling the market’s gains.
There is also a bit of a relief trade in the mix. Granted, Meta Platforms (META) and Microsoft (MSFT) stumbled yesterday after their earnings reports, but the sense of relief today is rooted in the understanding that we are now past the “Magnificent 7” reports (except NVIDIA), and they have, for the most part, made it clear that there is more growth to be had. NVIDIA, which doesn’t report until November 19, made that abundantly clear in its own case at its GTC Conference earlier in the week.
To be sure, the AI investment cycle is still booming, evidenced by the increased capex forecasts from these companies, and there is a buzz of enthusiasm/speculation about trickle-down prospects for other companies that is expected to show up in rising earnings estimates.
In terms of the third quarter reporting period, the blended earnings growth rate sits at 10.6% versus an expected 7.0% at the end of the second quarter. The forward 12-month EPS estimate, meanwhile, stood at $279.70 on June 30, and today it is at $297.28, according to FactSet. It has increased from $292.92 on September 30.
This trend has been the market’s friend, and it is expected to remain so, absent a fundamental shock to the system. That doesn’t mean there can’t be a price correction, but absent a fundamental shock, it means the market will remain predisposed to buy into weakness.
It won’t have to do that at today’s open, which isn’t going to be weak—at least not for the mega-cap stocks and growth stocks.
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Originally Posted on October 31, 2025 – Amazon, Apple, NVIDIA, and the growth stocks have energized the market
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