Nasdaq EPS Growth 25–30% But Software Multiples May Fall Over Six Months
Analyst forecasts Nasdaq EPS growth of 25–30% this year and S&P 12-month earnings growth of 16%, yet warns software multiples could contract over the next six months without AI-driven price increases. Geopolitical risks could push oil above $90–$100, triggering volatility and prompting Fed rate cuts.
1. Market Resilience Despite Geopolitical Tensions
U.S. equity benchmarks opened lower on heightened Middle East conflict but rallied into the close, keeping S&P 500 within 4–5% of record highs. VIX remained below 30, indicating limited fear despite escalating Iran tensions.
2. Earnings Growth Versus Valuation Reset
Nasdaq companies are on track for 25–30% EPS growth this year, while the broader S&P posts 16% 12-month earnings growth. Analyst suggests a flat Nasdaq into year-end could normalize valuations to 2015 levels without a major sell-off.
3. AI Monetization Critical for Software Stocks
Software firms face risk of multiple compression unless they prove AI integration drives subscription price increases. Without higher per-seat fees, flat seat counts will pressure revenue growth and valuation support.
4. Fed Rate Cut Prospects
Federal Reserve is projected to deliver two to three rate cuts over the year but could accelerate easing if oil sustains above $90–$100 and supply shocks mount, injecting further market volatility.