markets

Luke Kawa4/14/25

S&P 500 earnings revisions are the worst they’ve been since Covid

An update on just how bad US earnings revisions have been, thanks to some new data from Bloomberg: the worst since April 2020.

This chart tracks the share of S&P 500 companies with earnings estimates higher than four weeks ago less the number with lower earnings forecasts, divided by the total number of changes.

The drawn-out slowdown in domestic activity plus the added tariff-induced disruptions are prompting a worse reading in this measure than any point in the bear market of 2022.

All of these cuts to profit projections aren’t causing much scarring at the index level, however. The benchmark US stock index’s bottom-up 12-month earnings estimates peaked at $276.87 on March 31 and have since declined by less than 0.5%.

Corporate America’s price targets and profit estimates are getting slashed all over Wall Street

Corporate America’s price targets and profit estimates are getting slashed all over Wall Street

The drawn-out slowdown in domestic activity plus the added tariff-induced disruptions are prompting a worse reading in this measure than any point in the bear market of 2022.

All of these cuts to profit projections aren’t causing much scarring at the index level, however. The benchmark US stock index’s bottom-up 12-month earnings estimates peaked at $276.87 on March 31 and have since declined by less than 0.5%.

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Stocks sink as inflation fears rise

Stocks sank after a hotter-than-expected producer price index reading as well as a higher inflation forecast from the Fed amid rising energy prices.

Brown bear on a rock

Hyperscalers and hard hats

If you build it, gains will come

Construction workers

Federal Reserve leaves rates unchanged; dot plot still signals lower rates in the cards for 2026

A relatively dovish reaction function from the US central bank.

Fed Chair Jerome Powell Holds An News Conference On Interest Rates

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Constellation, Talen, and NRG surge as BNP analysts see “golden (AI)ge” ahead for them

Power producers Talen Energy, Constellation Energy, and NRG jumped Wednesday, benefiting in part from a rosy write-up by analysts at BNP Paribas, who launched coverage of all three at “outperform” and argued that the AI energy trade — a big AI-related winner in recent years that has lagged a bit recently — is due for a second wind.

That view was in a broad note on the independent power producer segment of utilities industry that the analysts published Wednesday, titled “The Golden (AI)ge of IPPs.”

Here’s the gist of it:

US independent power producers (IPPs) have lagged the AI basket for 6+ months, after garnering much attention in 2023-1H25. Investors are caught up in the minutia of perceived headwinds: underwhelming pace of power purchase agreement deals, distributed behind-the-meter solutions stealing the ‘time-to-power’ edge, pressure for data centers to bring generation and not tighten the grid, etc.

And yet, as we demonstrate, despite all this noise, the wave of rising load is at the cusp of an acceleration that will nonetheless overwhelm new supply—well into the 2030s, in our view. Hop on or risk missing the resurgent AI trade this decade.

BNP’s price targets for the stocks — Constellation ($407), NRG ($232) and Talen ($549) — implied gains of 32%, 50%, and 68% respectively. (Though today’s gains would reduce those potential upside targets somewhat for new buyers.)

US independent power producers (IPPs) have lagged the AI basket for 6+ months, after garnering much attention in 2023-1H25. Investors are caught up in the minutia of perceived headwinds: underwhelming pace of power purchase agreement deals, distributed behind-the-meter solutions stealing the ‘time-to-power’ edge, pressure for data centers to bring generation and not tighten the grid, etc.

And yet, as we demonstrate, despite all this noise, the wave of rising load is at the cusp of an acceleration that will nonetheless overwhelm new supply—well into the 2030s, in our view. Hop on or risk missing the resurgent AI trade this decade.

BNP’s price targets for the stocks — Constellation ($407), NRG ($232) and Talen ($549) — implied gains of 32%, 50%, and 68% respectively. (Though today’s gains would reduce those potential upside targets somewhat for new buyers.)

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