The S&P 500’s earnings surge looks incredible. Two companies explain why

Good morning. There’s one number Wall Street watches more closely than almost any other: how much more (or less) money the biggest publicly traded companies in the U.S. are making compared with a year ago. It’s a pulse check not just for the market, but for the broader economy. And right now, that pulse is racing.

As of Monday, the blended earnings growth rate for the S&P 500 in Q2 2026 is 51%, according to an analysis by John Butters, VP and senior earnings analyst at FactSet, shared with CFO Daily. (Blended means it combines actual results from companies that have already reported with estimates for those that haven’t yet.) If that number holds, it would be the index’s highest earnings growth rate since Q2 2021, when it hit 91.6%.

However, two companies— Alphabet and Amazon —are responsible for most of the jump in that growth rate since June 30. Both reported actual GAAP earnings per share that blew past analyst estimates, and both got a major lift from unrealized gains on investments recognized as other income. Alphabet posted EPS of $9.11 versus an estimate of $2.88. Amazon reported $5.75 versus an estimate of $1.82.

Strip out those two companies, and the picture changes. The blended earnings growth rate for the S&P 500 falls to 32.6% from 51%, per Butters’s analysis.

Yet even without Alphabet and Amazon, 32.6% would still be the S&P 500’s highest earnings growth rate since Q3 2021, when it hit 40.6%, he noted. It would also mark the seventh consecutive quarter of double-digit earnings growth for the index—a streak that predates the AI infrastructure buildout dominating headlines this year.

The strength isn’t confined to a couple of tech giants, either. Overall, 10 of 11 sectors are reporting year-over-year earnings growth, with nine of those 10 sectors reporting double-digit earnings growth. Energy is surging 146.3% year-over-year, heavily supported by firm fuel prices, for example. Communication Services earnings are up 116.9% year-over-year, largely amplified by mark-to-market gains from AI infrastructure investments. Meanwhile, health care is the lone detractor, reporting a year-over-year profit decline of around 6.5%.

Butters also shared some common themes in what executives are discussing on Q2 earnings calls. The term “tariff refund” has been cited on only 35 earnings calls to date among S&P 500 companies for Q2. By comparison, the term “AI” has been cited on 305 calls, while “inflation” has been cited on 193 calls. Meanwhile, the term “tariff” has been cited on 162 earnings calls so far in Q2.

Sheryl   Estrada [email protected]

This story was originally featured on Fortune.com

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