Amazon in Focus of AI Trend Stocks – Analysts Give Thumbs Up

The excitement surrounding Artificial Intelligence (AI) in global markets is reaching new heights as the earnings season provides investors with insights into the fruits of AI investments among S&P 500 companies. According to analysts, a slowdown in earnings growth is expected, with a projected increase of 5.3% in S&P 500 earnings compared to the previous year – a decline from the 13.2% increase in the second quarter, according to Reuters. Particularly, the technology and communication services sectors are expected to perform strongly, with earnings growth forecasts of 15.4% and 12.3%, respectively. Since last year, AI companies have dominated the narratives surrounding corporate earnings, leading to significant market gains. The S&P 500 has reached record highs, recording a year-to-date increase of approximately 21%, primarily driven by strong performance in the technology and communication sectors. Howard Chan, CEO of Kurv Investment Management, observes that analysts are closely examining how large corporations are monetizing their AI initiatives. Those that succeed will be duly rewarded. Meta, for example, experienced a rise in stock prices thanks to strong sales forecasts, demonstrating that digital advertising revenues are being successfully converted into AI investments. The spending by major corporations like Google on AI technologies, however, raises questions about their integration into existing business models. With a price-to-earnings ratio of 22.3 for the next 12 months, which is significantly above the long-term average of 15.7, many investors hope that the results of the current quarter will justify the higher stock valuations. Solita Marcelli from UBS Global Wealth Management is optimistic about the future, particularly as the semiconductor sector continues to remain a central point for AI investments. Amazon leads the list of trending AI stocks. Despite Amazon's outstanding potential as an investment, there remains confidence that some AI stocks offer a higher promise of return in a shorter time.