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17h ago

S&P 500 Posts Record Earnings Surprise Driven by AI Chips and Energy

Concentration in a handful of mega-cap techs plus investment-accounting gains leaves the durability of the profit surge unclear.

ExxonMobil said quarterly profit more than doubled from a year earlier.
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Overview

  • This week’s corporate reports show S&P 500 earnings beat estimates by about 29% in aggregate, the largest surprise on record since FactSet began tracking the measure.
  • When analysts combine reported results with estimates for companies yet to report, blended S&P 500 earnings growth is roughly 50% year-over-year, lifted heavily by AI-related demand and higher oil prices.
  • Alphabet and Amazon account for a disproportionate share of the headline gains and removing them cuts the blended growth rate from roughly 50% to about 32%, highlighting concentration risk.
  • Including ‘other income’ such as gains on equity investments inflates headline EPS growth to about 45%, while excluding those investment gains brings year-over-year EPS growth closer to the mid-20s percent range.
  • Investors have pushed indexes to record highs but AI-focused chip and memory stocks remain volatile, leaving markets exposed to valuation risk and making upcoming reports from NVIDIA, Micron, Cisco and CPI data key tests for sustainability.