Market growth is unusually concentrated in a few mega-cap tech stocks, with ten AI-related names making up over 40% of the S&P 500's market capitalization. The article argues non-tech growth stocks merit a look, but growth must be weighed against margins, debt, customer concentration and capital intensity. Analysts expect the "Magnificent Seven" to grow third-quarter earnings 20.3% year over year, versus 27.7% for the other 493 S&P 500 companies, suggesting earnings momentum is broadening. Netskope is cited as an example: revenue rose 29.2% to $220.5 million, yet trailing EBITDA stayed negative at $721 million. The list screens non-tech stocks with market caps above $20 billion and at least 25% five-year EPS growth.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
S&P 500earningstech stocksartificial intelligencevaluation
Open a keyword to see other news on the same topic.
Related news
- Apple Is One of the Most Profitable Businesses in the World. Here's Why the Stock Is Worth $295 a Share Right Now.
The article argues Apple is one of the world's most profitable businesses, with its shares up 1,080% over 10 years as of 21 October and a market capitalisation of 5 trillion USD. In the fiscal third quarter of 2026 (ended 27 June), Apple reported net income of 29.8 billion USD; services made up 28% of revenue with a 76% gross margin, versus 40% for products. The author notes the stock trades at 35 times forward earnings, an 81% premium to the S&P 500's 19.3, and that a forward P/E of 30 would imply a value of about 295 USD per share, 14% below the current 344 USD. The article also acknowledges the bull case that the stock deserves a high valuation given the company's quality and durable returns.
- Don't Miss This Week's 5 Most Important Earnings Charts
This week hundreds of S&P 500 companies report earnings, including Alphabet, Microsoft and Amazon, along with AI infrastructure firms, big pharma, restaurant chains such as Wingstop, Chipotle and Starbucks, and oil majors ExxonMobil and Chevron. The article highlights five stocks with strong earnings surprise records: Vertiv (VRT) has missed only twice in five years and is down 21% over the past month with a forward P/E of 28.9; Microsoft (MSFT) has missed once in five years and is up 3.2% over the past month; Eli Lilly (LLY) has delivered five earnings surprises in a row, is up 8% over the past month, and trades at a forward P/E of 38 with expected 2026 earnings growth of 37%. Sandisk (SNDK) has not missed since its 2025 spin-off from Western Digital, is down 29% over the past month, and has a forward P/E of 5.8; Alphabet (GOOGL) has not missed since the AI Revolution began in 2023.
- The S&P 500 Is Expecting Something Extraordinary. History Says Investors Should Be Careful What They Wish For.
According to LSEG, S&P 500 earnings are forecast to grow 31% year over year in the third quarter, driven mainly by tech and semiconductors, with energy also contributing. The forward P/E has dipped slightly to 21, suggesting the recent rally has been fueled by earnings growth rather than higher valuations. The author warns that if this growth is already priced in, a downside surprise could trigger a 10% correction, though not necessarily a crash. Comparing with earnings booms in 2000, 2004, 2010 and 2021, the article notes that roughly two-thirds of growth comes from AI-adjacent tech firms, while energy gains are tied to oil prices lifted by the Iran war. It suggests keeping core holdings such as VOO and VTI and reviewing overall tech sector exposure.
- China's tech darlings are losing their shine. Here's what's behind the sell-off
China's technology stocks are losing momentum as investors question whether the AI boom can generate profits high enough to justify rich valuations. The STAR 50 Index, which tracks 50 of the largest and most liquid companies on Shanghai's STAR Market, has fallen more than 40% from its July peak. The sell-off began as profit-taking after a strong rally that accelerated when DeepSeek emerged in early 2025, but has widened into doubts about whether earnings can support current prices. Battery giant CATL, down 37% year to date, illustrates the problem: its third-quarter revenue rose roughly 59% but net profit only about 15%, as competition, product mix and changes to taxes and rebates squeezed profitability. Analysts say a sustained rebound would require stabilizing earnings, clearer returns on AI spending and stronger domestic demand.
- Is Apple a Top Tech Stock to Buy Now?
The article notes Apple is up about 27% in 2026 and has lifted revenue growth above 10% year over year, but argues that growth may fade once the current smartphone upgrade cycle ends. It notes that Apple's stock has twice exceeded 40 times earnings over the past decade, and each time the valuation fell by 25% to around 30 times earnings or lower, a pattern the author expects could repeat in 2027. With analysts projecting about 10% revenue growth in 2027, the author sees Apple growing at roughly the S&P 500's average pace, while the index trades at 23.2 times earnings. The author therefore concludes there are better stocks than Apple to consider now and that Apple's valuation is unlikely to rise much further from current levels.
- Over 25% of the Stocks in the S&P 500 Are Down 40% or More. 4 Bargain Tech Stocks to Buy Now
Despite the S&P 500 trading near all-time highs, more than 25% of its stocks were down 40% or more from their highs as of October 8, 2026. The article presents four stocks as bargains to consider, starting with Netflix at a forward P/E of around 18.5 times 2027 analyst estimates. Oracle has a backlog of $664 billion at the end of Q2, but it already carries considerable debt and is burning cash. ServiceNow trades at a forward price-to-sales ratio of 7.5 times 2027 estimates, while AppLovin trades at about 13 times 2027 earnings estimates after revenue rose 53% to $1.9 billion and adjusted EPS rose 66% to $3.76 last quarter.
Related markets
Latest news
- Silver Falls Below $50/Ounce: What Lies Ahead?
Silver has broken below $50/ounce and is weakening more than gold, with prices hitting the lowest levels since the start of the year. A Metals Focus report expects the market to shift from deficit to surplus in 2027, as inventories rise and jewelry and industrial demand slow; high prices and efforts to use less silver, especially in solar panels, also weigh on demand. Interest rates add pressure: the Fed held rates in October but signaled readiness to tighten further, markets price an 80% chance of a 25 basis point hike in December, and rising yields reduce the appeal of precious metals. London vault stocks reached 932 million ounces, with about 267 million ounces available for trading excluding ETP holdings, nearly double the October 2025 low, as silver held in ETPs fell by about 60 million ounces this year. The report says silver will likely keep following gold over the next 12 months, and the outlook could change if expectations of tighter monetary policy in 2027 ease.
- 1 Big Winner and 1 Loser From the Upcoming Anthropic IPO
Reports suggest Anthropic's upcoming IPO could beat the record for the largest in history. The author expects Broadcom to benefit, as Anthropic reportedly plans major AI infrastructure build-outs and has a five-year agreement worth $161.2 billion for TPU-based compute capacity with Broadcom. Broadcom projects $115 billion in AI revenue for fiscal 2027 and $230 billion for fiscal 2028, though a growing AI chip share could lower gross margins. In contrast, Recursion Pharmaceuticals, founded in 2013, still has no drug on the market, and Anthropic, which says nine of the 10 largest pharma companies are among its clients, could erode its AI drug-discovery edge. The author finds Recursion's stock unattractive given clinical and regulatory uncertainty.
- After Eli Lilly’s Explosive Earnings Report, Is It Too Late to Buy the Stock?
Eli Lilly reported third-quarter revenue up 39% to more than $24 billion, driven mainly by its weight loss portfolio. Mounjaro sales rose 65% to over $10 billion and Zepbound climbed 49% to $5.3 billion, while 40% of new patients starting an oral obesity medicine chose Foundayo. Lilly holds 63% of the U.S. market, and the stock is trading at a record high above $1,300, at 42x forward earnings estimates versus more than 70x in 2024. The article argues the weight loss market still has room to expand, since only 3% to 10% of potential U.S. patients access weight loss care, and that late-stage candidates such as retatrutide add to the growth outlook.
- Nvidia (NVDA) CEO Jensen Huang Reportedly Targeted In Chinese Espionage Plot
Reports say Nvidia CEO Jensen Huang was targeted in an alleged Chinese espionage plot. The reported operation has prompted fresh questions from US lawmakers about potential security vulnerabilities in Nvidia's AI chip development. Regulators and legislators are weighing the incident against existing restrictions on Nvidia's advanced AI chip exports to China. The article argues the episode could reinforce Washington's view of Nvidia as critical AI infrastructure, while also potentially hardening support for stricter licensing and oversight of where its top-end platforms are deployed, which could cap part of the addressable market.
- Shopify Stock Is More Than 10% Below Its Record. Should You Buy Before Its Nov. 3 Report?
Shopify (SHOP) closed at a record $179.22 on Oct. 12 but now trades about 12% below that level, including a roughly 6% drop on Friday. The e-commerce software company reports third-quarter results before the market opens on Nov. 3, after management set guidance in August for revenue growth in the low thirties, gross profit growth in the mid-to-high 20s and a free cash flow margin in the high teens to low 20s. The author notes Shopify has met or beaten its guidance all year, with revenue growth of 34% in both the first and second quarters, though the third quarter faces a tougher comparison. Shares fell about 16% on May 5 even though first-quarter revenue growth beat the outlook, and rose about 17% after the August report, suggesting investors judge more than guidance beats. At roughly 86 times trailing free cash flow, the author argues the drop does not change much and prefers to wait for the report and see where shares settle afterward.
- The 5 most interesting analyst questions from Alphabet's Q3 earnings call
The market reacted sharply negatively to Alphabet's third-quarter results, even though revenue of $127.6 billion was in line with the S&P analysts' estimate of $127.9 billion. Earnings per share were $2.12 against an expected $3.01, a 29.6% miss. Management credited AI-driven momentum across Search, Cloud and YouTube for the strong top-line growth, and operating margin rose to 31.8% from 30.5% a year earlier, though rising costs for infrastructure and AI investment weighed on profitability. In the Q&A, analysts asked about productivity gains from new AI models, scaling agentic products to a billion users, compute allocation between internal needs and Cloud customers, and how TPU system sales affect cash flow.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.