Bloomberg Surveillance · Monday, July 6, 2026
Andrew Slimon of Morgan Stanley notes that earnings estimates for 2027 have significantly increased, suggesting the market may still be underestimating the impact of AI investment. He believes the market's rise is driven by companies raising guidance, leading to higher future expectations, rather than just valuation multiples expanding.
“Well, yeah, I mean, Tom, Look, earnings estaments are going up faster than the market is.”
“And the reality is that earnings number started this year at three hundred and fifty seven dollars. It's at four hundred dollars today. Now that's twenty twenty seven earnings, So it's up. It's up, you know, whopping thirty three dollars and it's only June. And if you look at the quarterly beats by the SMP, they're accelerating.”
“So as long as the E is going up faster than the P, that means the pe is an inflating. I think that's a much healthier market than a market that's just going being revalued higher on a you know, on a pe basis.”