HSBC Projects Strongest U.S. Q2 Stocks Earnings Growth Since Post-Pandemic Era

HSBC Global Investment Research projects U.S. corporate earnings per share (EPS) growth in the second quarter will mark the strongest trajectory since the post-pandemic boom. The investment firm attributes this momentum to concentrated strength within mega-cap companies rather than broad market expansion. Nicole Inui, head of equity strategy for the Americas at HSBC Global Investment Research, stated the growth is anchored by fundamentally strong sectors including energy, technology, and industrials, supported by high fundamental demand and increased investor revenue expectations in AI-focused tech stocks.

Energy and Technology Sectors Lead Double-Digit Earnings Gains

HSBC expects the energy sector—including XLE, VDE, and XOP—and the information technology sector—including VGT, XLK, and SOXX—to lead earnings growth with double- and triple-digit gains. The technology sector will remain the premier driver of the market's record earnings expansion, supported by strong cloud computing growth and capital commitments toward artificial intelligence infrastructure. Market analysts have historically revised corporate EPS projections ahead of quarterly reporting cycles, but consensus estimates in the weeks leading up to earnings rollouts have been skewed by high fundamental demand and increased revenue expectations in AI-focused tech stocks.

Microsoft and Alphabet Report Strong Q1 2025 Revenue Growth

Microsoft Corp. (MSFT) reported Q1 2025 revenue of $77.7 billion, representing an 18% increase year-over-year. The tech giant's diluted GAAP earnings per share landed at $3.72, heavily supported by a 40% revenue surge in its Azure and cloud services business. Alphabet Inc. (GOOGL) announced consolidated Q1 2025 revenue of $109.9 billion, marking a 22% increase year-over-year. Similar performance was seen by Magnificent Seven companies, chipmakers, and memory drive makers, according to the HSBC report published by Seeking Alpha.

SPY, QQQ, and DIA ETFs Post Year-to-Date Gains

Retail sentiment on Stocktwits for SPY, QQQ, and DIA was between "extremely bullish" and "neutral" zones with "normal" to "high" message volumes. SPY, QQQ, and DIA ETFs have gained 9.7%, 17%, and 8% year-to-date, respectively.

FAQ

What did HSBC project for U.S. Q2 corporate earnings growth?

HSBC Global Investment Research projects U.S. corporate earnings per share (EPS) growth in the second quarter will mark the strongest trajectory since the post-pandemic boom, concentrated within mega-cap companies in energy, technology, and industrials sectors.

How did Microsoft and Alphabet perform in Q1 2025?

Microsoft reported Q1 2025 revenue of $77.7 billion with an 18% year-over-year increase and diluted GAAP EPS of $3.72, supported by a 40% revenue surge in Azure and cloud services. Alphabet announced Q1 2025 revenue of $109.9 billion, a 22% year-over-year increase.