S&P 500 Q2 Earnings Surge 51%. Alphabet and Amazon Explain Why
Alphabet and Amazon account for most of the 51% Q2 earnings surge. Strip them out and the S&P 500 growth rate still hits 32.6%, seven straight quarters of double-digit gains.
The S&P 500's blended earnings growth rate for Q2 2026 stands at 51%, according to FactSet VP and senior earnings analyst John Butters. That would be the index's best reading since Q2 2021, when it hit 91.6%. Two companies account for most of the jump since June 30.
Alphabet posted GAAP EPS of $9.11 against an estimate of $2.88. Amazon reported $5.75 versus a $1.82 estimate. Both got a major lift from unrealized gains on investments booked as other income. Strip them out and the blended growth rate drops to 32.6%, Butters said.
Even at 32.6%, the index would still post its best quarterly earnings growth since Q3 2021, when the rate reached 40.6%. It would also mark the seventh consecutive quarter of double-digit earnings growth for the S&P 500, a streak that predates the AI infrastructure buildout dominating headlines.
The strength is not confined to tech. Ten of 11 sectors are reporting year-over-year earnings growth, and nine of those show double-digit growth. Energy surged 146.3% year-over-year, supported by firm fuel prices. Communication Services earnings rose 116.9%, amplified by mark-to-market gains from AI infrastructure investments. Health care is the lone detractor, posting a year-over-year profit decline of about 6.5%.
Butters also tracked what executives are discussing on Q2 earnings calls. The term "AI" appeared on 305 calls among S&P 500 companies. "Inflation" showed up on 193 calls. "Tariff" was cited on 162 calls. "Tariff refund" appeared on only 35 calls.
In other moves, Ash Bhumbla was appointed EVP and CFO of Hormel Foods, effective Sept. 8. He joins from Tyson Foods, where he served as SVP and CFO for the chicken segment. Laurie Bergman was named CFO of Ecovyst, effective Aug. 24. Samuel J. Poletti was promoted to CFO of AMRZ, effective Aug. 24, succeeding Baris Oran. Poletti had been chief strategy and M&A officer since the company's NYSE listing in June 2025.
KPMG's Mid-Year 2026 M&A Pulse Survey, drawing on 300 corporate and private equity dealmakers, found 84% of corporates expect deal volume to stay flat or climb in the second half. International expansion jumped from 53% at year-end 2025 to 67% at mid-year as the top driver. Private equity showed similar growth ambitions but more caution: 45% expect higher volumes, yet nearly half report longer timelines, and 28% have paused deals over Middle East tensions. Still, 39% of PE firms now eye transactions above $1 billion, up from 5% at year-end 2025.
Harvard Business School professor Shikhar Ghosh, whose AI version is part of an online startup bootcamp where founders rehearse pitches, said the goal "isn't to create a substitute for me." The AI preparation means "when we do come together live, we can spend more of that valuable time on the questions where human judgment and conversation matter most."
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