Adam Parker Walks Back April Earnings Cut, Analyst Says Tariff Risks Were Overblown: 'The Big 50 Companies Were Kind Of Immune'

Analyst Adam Parker, the founder of Trivariate Research, is reversing course on his earlier bearish outlook on U.S. corporate earnings, saying that fears around tariffs and inflation may have been overblown.

What Happened: On Monday, Parker admitted to being a little “too harsh” while slashing his corporate earnings estimates for the year, way back in April. In an interview with CNBC’s Closing Bell, Parker says that his initial reaction was to lower his “estimates by a lot,” with the notion that “this tariff stuff’s going to be bad.”

“But I took a look over the last couple [of] days and said, maybe I was too harsh,” he says, pointing to the resilience shown by the largest U.S. companies, noting that the top 50 names account for half of the market’s gross profits, and tend to hold up well in the face of inflationary pressures.

“The big 50 companies were kind of immune,” he says. “The financials are in good shape.”

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Parker also pushed back on concerns that multinationals would suffer due to a stronger dollar or rising input costs. Oil and broad commodity indexes haven't surged meaningfully, he says, suggesting that margin pressures could ease.

While he acknowledged that some institutional investors are bracing for a “soft pocket” in the economy between August and October, referring to a short-term cooling in business activity, or a temporary slowdown, he is certain that the longer-term optimism tied to artificial intelligence will support the broader sentiment.

“We're dreaming about AI stuff next year,” he says, adding that “it's hard to get too negative when I still can think there's going to be some better predictive analytics deployed into companies.”

Why It Matters: Economist Nouriel Roubini had echoed similar views on the tariffs, as well as AI-driven growth, more than two months ago.

He famously said that it “wouldn’t matter if Mickey Mouse is President,” because the economy will keep growing, since artificial intelligence is set to “transform a dozen major sectors, propelling economic growth.”

Roubini stated that by the end of this decade, “U.S. growth could hit 4 percent. By the end of the next decade, we might see 6 percent,” as for the first time in history, “we’re entering a phase of exponential innovation.”

On the other hand, however, tariffs continue to result in headwinds and uncertainties, with the auto industry in particular seeing a significant impact.

Last month, Ford Motor Co. F CEO Jim Farley told investors that the company is set to see a net impact to the tune of $1.5 billion through the full year.

“We’ve estimated the gross impact of tariffs for [the] full year total company EBIT of $2.5 billion and a net impact of $1.5 billion,” he said, during the company’s first quarter results.

Price Action: Shares of Ford Motors were up 1.51% on Monday, trading at $10.75, and are flat in after-hours trading.

Ford Motors scores well on Benzinga’s Edge Stock Rankings, and as a favorable price trend in the short, medium and long term, but how does it compare with the Top 5 S&P 500 stocks listed above? Click here to find out.

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