Broad-Based Earnings Growth Expected in 2026

Core Insights - The Tech sector is the primary driver of earnings growth, with expectations for continued growth into 2025 Q4 and beyond [2][3] Earnings Growth Expectations - For Q4 2025, Tech sector earnings are projected to increase by +15.4% year-over-year, supported by +16.3% higher revenues, marking the 10th consecutive quarter of double-digit earnings growth [2] - The overall S&P 500 earnings are anticipated to rise by +7.9% in Q4 2025, with revenues increasing by +8.2%, indicating a sustained positive earnings growth trend for the index [4] - In 2026, total S&P 500 earnings are expected to grow by +12.9%, with a notable drop to +9.3% when excluding the Tech sector's contributions [4] Sector Contributions - The Tech sector is projected to contribute +19.9% earnings growth in 2026, following a +20.0% growth in 2025 [5] - The 'Magnificent 7' companies, including NVIDIA, Apple, and Tesla, are expected to see Q4 earnings rise by +17.3% year-over-year, with revenues up by +16.5% [4] - Excluding the 'Magnificent 7', the rest of the S&P 500 index is expected to see only a +4.6% increase in Q4 earnings [4] Positive Estimate Revisions - The Tech sector has experienced consistent positive estimate revisions, indicating a strong growth outlook for both Q4 and the full year 2026 [6][7] - The Tech sector is expected to account for 35.9% of the S&P 500's total earnings over the next four quarters and currently represents 43.1% of the index's total market capitalization [14]