Full-year 2026 earnings forecasts for companies in the S&P 500 have been revised up to 32% growth. AI investment is the primary driver, while 86% of companies beat analysts’ expectations in their second-quarter earnings.
Full-year 2026 earnings forecasts for companies in the S&P 500 have been sharply revised up to 32% growth. Forecasts had called for 24% growth before second-quarter earnings announcements began, but repeated upward revisions in consumer discretionary and communication services expanded the projected earnings growth rate. The impact of massive AI-related investment on earnings is becoming increasingly clear.
Of the companies that had reported earnings, 86% posted profits above analysts’ expectations. BI’s analysis points out that the earnings-beat rate was at its highest level since 2021, with AI-related companies making a significant contribution.
The earnings forecast for the communication services sector this year was sharply revised up from 26% growth to 51% growth. Growth in advertising revenue and the monetisation of AI contributed to the revision, while stocks such as Alphabet and EchoStar drove the upward adjustment.
The energy and financial sectors also supported the overall upward revisions. Earnings forecasts for Exxon Mobil and Chevron were raised, while expanding orders improved the outlook for the economic sector. Meanwhile, rising costs at Apple and Nvidia have been cited as factors putting pressure on profit margins.