THE APEX TIMES
Ross Gerber uses Alphabet and Amazon to argue S&P 500 earnings growth is less broad than it looks
The investor pointed to how much of the S&P 500’s second-quarter earnings growth he says is tied to Alphabet and Amazon, suggesting the index’s performance may be concentrated rather than evenly distributed across companies.
Investor Ross Gerber made a focused argument about what lies behind headline S&P 500 earnings momentum, pointing to the role of Alphabet and Amazon in the index’s second-quarter results. In a recent market note carried by Yahoo Finance, Gerber said that if investors “take out” Alphabet and Amazon, the picture of S&P 500 earnings growth becomes “far less impressive.”
The core of Gerber’s message is concentration. Rather than treating the index’s overall earnings gains as a sign of widespread improvement across the market, he emphasized that a substantial share of growth, at least in the second quarter, is linked to just a couple of very large companies. His point, as framed in the post, is that broad market narratives can be skewed when the biggest constituents swing the overall totals.
Alphabet, the parent of Google, and Amazon are both members of the S&P 500 and among its largest companies by market value. In Gerber’s view, their earnings performance helped lift aggregate index growth during the period in question. The argument is essentially arithmetic: when the same two companies account for a meaningful chunk of reported growth, removing them changes the index’s implied underlying trend.
Gerber’s note also highlights an issue that often comes up in earnings seasons, especially for index-based measures. The S&P 500 is a weighted index, so the largest firms can have outsized influence on whether the index looks healthy on a headline basis. That means an investor can see a “good” quarter for the S&P 500 even if a large portion of the rest of the market is contributing less than the headline suggests.
The Yahoo Finance report frames Gerber’s claim as supported by “data,” though it does not provide, in the information provided here, specific figures such as the exact percentage of earnings growth attributed to Alphabet and Amazon, or the quantified change to the index’s growth rate after excluding them. As a result, what can be verified from this report is the direction of Gerber’s conclusion, not the precise magnitude of the effect.
Alphabet and Amazon are widely followed for their mix of advertising, cloud services, commerce, and subscription offerings. That makes them especially sensitive to factors that can drive large earnings swings, such as changes in digital advertising demand, cloud spending, consumer spending patterns, and overall enterprise technology budgets. When these two businesses move, they can shift the mood not just for their own stocks, but also for the index totals that investors use as shorthand.
For the broader market, the implication is not automatically bearish, but it does point to a diagnostic question. If earnings growth is being propped up primarily by a few megacap companies, then the market’s durability depends on whether the rest of the index can “catch up” in subsequent quarters. If they cannot, then later periods could show more uneven results even if aggregate index figures continue to look acceptable in the short term.
Still, important details are not disclosed in the limited information available from this market note. The report does not specify the quarter-by-quarter composition of earnings growth, whether Gerber’s conclusion is based on year-over-year growth rates or sequential comparisons, or how he treats other large index constituents alongside Alphabet and Amazon. Without those specifics, readers should treat the claim as a perspective on concentration rather than a fully substantiated statistical breakdown in this particular excerpt.
Why It Matters
- Concentration risk: if index earnings growth is driven mainly by a small set of megacap companies, the broader market’s health may be weaker than headlines imply.
- Index-weighting effects: because the S&P 500 is market-cap weighted, a few large companies can sway reported aggregate growth.
- Forward expectations: investors may look to see whether smaller constituents deliver stronger earnings in later quarters, not just megacap performance.
Sources
Key Facts
- Ross Gerber argued that S&P 500 second-quarter earnings growth is concentrated and that the index’s performance looks less impressive when Alphabet and Amazon are excluded.
- The argument was presented in a market note published by Yahoo Finance.
- Alphabet and Amazon are major S&P 500 constituents whose earnings performance can significantly influence index-level totals.
- The post says Gerber used data to make the point, but specific percentages or numeric results are not included in the information provided here.
Technology Related
Apple reportedly tests CXMT memory chips as global components squeeze intensifies
A market report says Apple has been evaluating memory chips from China’s CXMT for possible use across iPhone and Mac product lines, reflecting ongoing pressure on the supply chain for advanced components.
Sovereign AI infrastructure market forecast points to long runway for GPU and compliant cloud stacks, report says
A new market study projects the sovereign AI infrastructure market will expand from $24.8 billion to $301.6 billion by 2040, putting NVIDIA, Microsoft, and AWS in the spotlight as enterprises and governments prioritize data residency, security, and cross-border deployment.
Mobile wallet market forecast projects sharp growth through 2035, with Apple and other payments brands highlighted
A new industry forecast projects the global mobile wallet market will expand from about $15.65 billion to $177.31 billion by 2035, pointing to biometric authentication, “super app” strategies, and digital payments growth in emerging markets as key drivers.
SemiAnalysis argues Microsoft has a path to “out-AI” rivals in the next phase of AI demand, where inference could be a $100B-per-gigawatt market
A market perspective highlighted by Yahoo Finance says the economics of running AI models, not just training them, are likely to drive a major wave of spending. The analysis suggests Microsoft is well placed because it can monetize the compute needed for inference at scale.
Netflix investors are weighing whether “premium” streaming growth is worth a higher price than Disney’s cheaper valuation
A new market discussion contrasts Disney’s lower price and improving business indicators with Netflix’s premium positioning, framing the gap as a bet on predictability versus a turn toward stronger fundamentals.
As investors fret, a Yahoo Finance piece urges backing “proven winners” like Nvidia, Eli Lilly and Disney
The argument, set out in a market column dated Aug. 10, is that risk-averse investors may be looking to avoid uncertainty by sticking with large, well-known leaders, even when the broader tape feels unstable.
Apple shares held up even after a softer outlook, as traders focused on a foldable phone, a Whoop-like band and memory-test talk
Apple stock was up for the week, but fell sharply after the iPhone maker’s quarterly outlook disappointed. Market chatter around new device and supply-chain directions helped keep attention on AAPL.
Micron and Intel post strong results, but investors are focusing on the businesses beneath the headlines
A recent market note argues that even when memory and chip peers deliver “blowout” quarters, the underlying drivers may diverge sharply, with one company benefiting from AI-linked pricing momentum while the other faces a different mix of costs and execution risks.
Palantir shares surged after CEO Alex Karp cited an “otherworldly” second quarter performance
Investors drove a sharp week of gains in Palantir’s stock, reacting to remarks from CEO Alex Karp about the company’s second-quarter results.
Apple’s supply-chain leverage on phone memory may be weakening as pricing power shifts to chip makers
A growing shortage of certain memory components is changing bargaining dynamics for smartphone brands, with potential near-term pressure on component costs for Apple and its customers.