S&P 500 earnings for the second quarter of 2026 are on track to rise 25.3% year over year, with the Technology sector alone contributing nearly half of that growth, according to Zacks Investment Research. Two semiconductor giants—Nvidia (NVDA) and Micron Technology (MU)—are single-handedly reshaping the sector's earnings profile, accounting for a significant portion of the Tech sector's 48.8% earnings growth. Excluding these two companies, Tech sector earnings growth would fall to 25.3%, underscoring their outsized impact.
Q2 Earnings Season Off to a Strong Start
As of July 17, 49 S&P 500 members have reported Q2 results, with total earnings up 48.7% year over year on 15.1% higher revenues. An impressive 91.8% of companies beat EPS estimates, and 79.6% exceeded revenue forecasts—both near five-year highs. The robust start is partly fueled by Micron's blockbuster quarter, which saw earnings surge 1,350% on revenue growth of 345.7%. Excluding Micron, the earnings growth rate for the early reporters drops to a still-solid 27.5%.
The broader earnings picture remains positive, with 11 of 16 Zacks sectors expected to post positive earnings growth in Q2. Energy leads with a 129.5% jump, followed by Tech at 48.8%, Basic Materials at 45.2%, and Finance at 23.5%. Even excluding the Energy sector, aggregate earnings growth would be 20.7%.
Tech Sector Dominance and the Magnificent Seven
The Technology sector is a heavyweight, contributing 41% of all S&P 500 earnings and accounting for 45.6% of the index's market cap. Its 48.8% earnings growth is more than double the broader index's pace. The Magnificent Seven—which includes Nvidia but not Micron—are expected to see Q2 earnings rise 28.7% year over year on 25.1% higher revenues, a deceleration from Q1's 48.7% growth. However, strength outside this group is evident: excluding the Magnificent Seven entirely, the rest of the S&P 500 would still post 24.3% earnings growth.
Nvidia and Micron are pivotal to the Tech sector's performance. For the full year 2026, total S&P 500 earnings are expected to increase 22%, but that drops to 12.7% when the Tech sector is excluded. Removing only Nvidia and Micron from the index reduces the growth rate to 15.5%, highlighting their disproportionate influence.
Outlook and Key Themes
Early results and management guidance suggest continued momentum, with an above-average proportion of companies beating estimates and offering reassuring outlooks. The Q2 earnings season accelerates this week as more than 300 companies report, including Tesla and Alphabet from the Magnificent Seven. By Friday, results from over a quarter of the S&P 500 will be in, providing a clearer picture of corporate health.
Investors are closely watching whether the AI-driven demand that has boosted Nvidia and Micron can sustain their growth. Meanwhile, the broader market's resilience—even outside the tech giants—signals that the earnings expansion is broad-based, not solely dependent on a few names.