How Nvidia and Micron Are Single-Handedly Reshaping S&P 500 Tech Earnings
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How Nvidia and Micron Are Single-Handedly Reshaping S&P 500 Tech Earnings
09 mins
We are off to a strong start this Q2 earnings season, which accelerates significantly this week as more than 300 companies report results—including 85 S&P 500 members. This week’s lineup offers a highly representative cross-section of the market, featuring key players from all sectors alongside two prominent “Magnificent Seven” members: Tesla and Alphabet. By Friday, we will have a much clearer picture of corporate health, with results in from more than a quarter of the entire index.
The picture emerging from early results is one of continued strength and solid momentum. An above-average proportion of companies are beating estimates, while management teams are offering reassuring commentary regarding their outlooks for the current and upcoming periods. Although we are still in the early stages of the Q2 reporting cycle—with results in from roughly 10% of S&P 500 members—the initial data gives us strong confidence that the broader corporate earnings landscape remains highly positive.
The chart below gives you a big-picture view of the overall earnings picture. It highlights current Q2 expectations right alongside actual results from the past four quarters and forecasts for the next three.
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Image Source: Zacks Investment Research
As you can see here, total S&P 500 earnings for 2026 Q2 are expected to increase by +25.3% compared to the same period last year on +11.9% higher revenues.
Of the 16 Zacks sectors, 11 are expected to have positive earnings growth in Q2, with Energy (earnings growth of +129.5%), Tech (+48.8%), Basic Materials (+45.2%) and Finance (+23.5%) as the major growth drivers.
Q2 earnings growth drops to +14.1% from +25.3% once the Tech sector’s substantial contribution is excluded.
The +129.5% earnings growth for the Energy sector is meaningful, but aggregate earnings growth would still be +20.7% on an ex-Energy basis.
For the Magnificent Seven—two of whose members report this week—total Q2 earnings are expected to increase +28.7% year-over-year on +25.1% higher revenues. While this marks a deceleration from the group’s blistering +48.7% earnings growth (on +25.3% revenue gains) in Q1, their fundamental strength remains a major market driver. Crucially, there is plenty of strength outside of the group: if we exclude the Magnificent Seven entirely, Q2 earnings for the rest of the S&P 500 would still be up a robust +24.3%.
The Tech sector has been a pillar of earnings growth over the last two years, and it is expected to continue playing that role in Q2 and beyond. The chart below shows current earnings and revenue growth expectations for the sector relative to what it actually reported in the preceding two periods and what is expected over the following three quarters.
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Image Source: Zacks Investment Research
The Tech sector is unlike the other 15 Zacks sectors, as it alone brings in 41% of all S&P 500 earnings and accounts for 45.6% of the index’s total market capitalization. Semiconductors as a whole and two companies in that industry in particular are playing a material role in the Tech sector’s current growth profile.
These two companies are Micron Technology MU and Nvidia NVDA. Micron has already reported Q2 results, with earnings up +1350.1% on +345.7% higher revenues. Excluding the contribution from Micron and Nvidia, Q2 earnings for the rest of the Zacks Tech sector would be up +25.3% (vs. +48.8% otherwise).
The chart below shows the contribution of these two companies to the Tech sector’s growth profile.
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Image Source: Zacks Investment Research
The chart below shows the earnings picture on an annual basis.
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Image Source: Zacks Investment Research
As with Q2 expectations, the Tech sector has an outsized impact on the annual earnings picture as well. Total Tech sector earnings are expected to increase +40.1% from the same period last year on +18.3% higher revenues.
Excluding the Tech sector’s substantial contribution, total earnings for the year would be up +12.7% (vs. +22% otherwise).
As we saw with Q2 expectations, contributions from Micron and Nvidia are also significant here, as the chart below shows.
Zacks Investment Research
Image Source: Zacks Investment Research
The way to read this chart is that the +22% earnings growth expected in 2026 drops to +12.7% once the Tech sector is excluded and +15.5% once only Nvidia and Micron are excluded from the index.
Q2 Earnings Season Scorecard
Through Friday, July 17th, we have already seen quarterly results from 49 S&P 500 members. Total earnings for these 49 index members that have reported results are up +48.7% from the same period last year on +15.1% revenue gains, with 91.8% of the companies beating EPS estimates and 79.6% of them beating revenue estimates.
The comparison charts below put the Q2 earnings and revenue growth rates for these index members in a historical context.
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Image Source: Zacks Investment Research
The comparison charts below put the Q2 EPS and revenue beats percentages in a historical context.
Zacks Investment Research
Image Source: Zacks Investment Research
As you can see above, the Q2 EPS beats percentage for this group of 49 index members is a new 5-year high, while the revenue beats percentage is very close to the 5-year high.
The unusually strong earnings growth rate of +48.7% and revenue growth of +15.5% are benefiting from Micron’s blockbuster quarter results. The comparison charts below show the growth picture on an ex-MU basis.
Zacks Investment Research
Image Source: Zacks Investment Research
For a detailed view of the evolving earnings picture, please check out our weekly Earnings Trends report here >>>> Early Q2 Results Show a Highly Robust Earnings
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