$SPDR S&P 500 ETF (SPY.US)$ | BofA RAISES its 2024 S&P 500 e...

$SPDR S&P 500 ETF(SPY.US)$ | BofA RAISES its 2024 S&P 500 earnings estimates to $250 from $235, citing AI's 'virtuous cycle' and marking the highest Wall Street forecast with a 12% YoY upside.
"Companies delivered another STRONG beat in 4Q and our economists RAISED their 2024 GDP forecast to +2.7% YoY (vs. +1.4% in November)," note strategists.
This GDP increase is expected to boost EPS growth by 5ppt.
Despite a 3ppt shortfall in expected EPS growth in 2023, BofA anticipates a REBOUND in 2024, also setting a 2025 EPS forecast at $275.
Hyperscalers like $MSFT, $AMZN, $GOOGL, and $META are projected to SPEND $180 billion on capex in 2024, up 27% YoY.
“History suggests companies in reinvestment cycles underperform, but we see a potential VIRTUOUS cycle forming from AI (artificial intelligence) investments,” strategists noted.
“Semis and networking are the most obvious BENEFICIARIES, but increased power usage and the physical build-out of data centers will lead to MORE demand for electrification, utilities, commodities, etc,” they added.
“Productivity gains from AI and domestic investments are also a major tailwind.”