Q4 Earnings Review

The Q4 2025 earnings season shows robust 13% profit growth and strong beats, though market reactions have been selective, particularly for Tech and the Mag-7. AI investment continues to surge above expectations, while a weaker US dollar is boosting performance for multinational exporters.

Key Takeaways

• 1.Q4 2025 earnings are exceeding expectations with a blended net income growth of 13% for the S&P 500, led by Information Technology.
• 2.AI-related capital expenditure is surging significantly, with actual realized capex of $375.5B far exceeding the $308.9B estimated for Q4.
• 3.A weakening US dollar is providing a significant tailwind for exporters, with international-focused companies reporting 27.7% growth versus 2% for domestic peers.

Table of Contents

• Earnings announcements have triggered notable share price volatility this earnings season
• The sales growth story: Tech is still a standout, followed by communication services
• The bottom-line breakdown reflects strength in tech and financials, while the consumer discretionary sector is still under pressure
• Did earnings help soften the scepticism in software?
• Analyst sentiment remains strong for both semis and software
• A growing number of companies are now contributing to overall earnings growth, signalling a broadening of the recovery across the S&P 500
• Analyst sentiment on the current quarter has also been rebounding
• The beat rate remains strong
• Earnings surprise also remains above average
• Guidance has also, on balance, been better than expected
• The Mag-7: Strong results, selective market reactions
• Capex: AI Investment surges beyond expectations
• Dollar weakness has also become a talking point
• Exporters benefit
• Stock screening for "Quadruple Winners": Identifying the season's standouts

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