Labor Market, AI Key Themes In US Earnings Calls: Goldman Sachs By Investing.com

In a Wednesday note to clients, Goldman Sachs strategists highlighted key issues facing the company’s management in the second quarter. After analyzing the transcript of the earnings calls, the bank identified three dominant themes: the labor market, consumer behavior and AI.

Investors’ attention turned back to the labor market after July’s payrolls report came in below expectations. Despite that, Goldman’s economists note that job openings still point to strong labor demand. The recent increase in the unemployment rate to 4.3% was largely due to temporary layoffs and labor supply problems, especially for new immigrants.

“The company’s comments this quarter on hiring plans and the labor market largely reflect a healthy labor market,” strategists said in the note.

Although some companies have discussed downsizing or slowing hiring, the overall tone suggests a better alignment between hiring needs and available labor, marking a major shift from the post-pandemic period when labor shortages were a major problem. The share of companies citing job shortages has now returned to pre-pandemic levels, and references to layoffs in earnings calls remained low in Q2.

On the consumer side, comments from companies on Q2 earnings calls reflected mixed sentiment, according to Goldman Sachs.

While some companies reported weaker sales due to continued macroeconomic pressures on consumers, others saw resilient spending. Discussions frequently focused on product affordability and disparities between low- and high-income consumers.

Meanwhile, the quantitative results from the consumer income reports are in line with broader macroeconomic data, pointing to a generally healthy American consumer.

The Consumer Discretionary and Consumer Staples sectors showed a 60/40 split between gains and losses, challenging the notion that all consumer stocks are struggling.

The US consumer scorecard also points to a reasonably healthy consumer, although economic data highlights widening disparities between income cohorts, with lower-income consumers experiencing slower income growth and a divergent sense of consumers compared to higher income groups.

On the artificial intelligence side, 2Q earnings calls continued to reflect strong hype around the technology, with a particular focus on the significant investment required to capitalize on it.

Hyperscalers such as Amazon (NASDAQ: ), Google (NASDAQ: ), Microsoft (NASDAQ: ) and Meta (NASDAQ: ) were closely watched as investors assessed both demand for AI-enabled products and services and plans of investments in artificial intelligence of companies. write down strategies.

Following their earnings reports, consensus estimates for hyperscale capital spending and R&D in 2025 rose 3%. This ongoing investment trend has been picked up by companies involved in building AI infrastructure, including data center REITs, utilities and semiconductor manufacturers.

“These AI infrastructure companies have highlighted that continued investment in AI will translate into a continued tailwind for their businesses,” the strategists said.

Beyond hyperscalers, other firms have emphasized the efficiency and productivity gains achieved through AI.

Year-to-date, AI infrastructure stocks have outperformed the equal-weight S&P 500 by 20 percentage points, compared to a 3 percentage point underperformance for stocks tied to AI revenue and long-term productivity gains.