Big tech stocks have already enjoyed sharp gains this year and Goldman Sachs says there are more to come this earnings season. Consumer discretionary and energy are a different story, however.

In a note Friday, David Kostin, Goldman’s chief U.S. equity strategist, said he expects margins for large-cap tech stocks to remain stable this year after the firms topped estimates for margin expansion in the first quarter, representing an “upside risk to 2Q EPS (earnings per share).”

“Consensus expects Info Tech margins will decline by 31 bp (basis points) in 2Q,” Kostin said. Accounting changes by Facebook and Google parent Alphabet will act as “a one time headwind” in the calculation of margins. “However, Info Tech margins beat consensus forecasts in 1Q and we estimate full-year 2017 Info Tech margins will be stable at 19.9%.”

Some of the tech stocks expected by Goldman to post strong margin growth this year include Nvidia, Qorvo and Lam Research. Tech stocks have rallied 17 percent for the year, making them the S&P 500‘s best performers.

Goldman struck a more pessimistic note when talking about consumer discretionary and energy stocks, however.

The investment bank said tightness in the U.S. labor market poses a threat to consumer stocks as wages tend to rise in such conditions, pressuring earnings for these companies.

“Many wage measures have shown signs of deceleration in recent months,” Kostin said. “However, given that the US economy is at full employment, our US Economics team expects wages will continue to rise. … The combination of wage pressures and weakness in Autos and Retailing will weigh on Consumer Discretionary earnings, which are expected to fall by 3% in 2Q, the most of any sector.”

The S&P’s consumer discretionary sector is the third-best performer of 2017, rising 9.4 percent.
As for energy — this year’s worst-performing sector — Goldman sees a “downside risk” to earnings following oil’s swift fall last month. West Texas Intermediate prices fell from around $48.40 at the beginning of June to approximately $42.50 before rebounding.

“Energy EPS is therefore at risk from lower oil prices (lower revenues) and higher rig counts (higher costs),” Kostin said. “Consensus EPS estimates for Energy have already been revised down by 15% since the start of 2Q. Additional negative revisions to full-year Energy profits would pose a risk to overall S&P 500 EPS growth, given 25% of 2017 EPS growth is expected to come from Energy alone.”

That said, Goldman still expects second-quarter earnings to come in slightly above consensus. In the note, Kostin said solid for the second quarter and a weaker dollar should bolster the S&P’s bottom line.