AI Boom Driving ‘Astronomical’ Profit Growth, Lifting Information Technology, Energy and Two Other S&P 500 Sectors
Powerful demand for artificial intelligence technologies is lifting earnings expectations for companies in the S&P 500.
Analysts now project full-year profit growth of 32% in 2026, a significant increase from the 24% anticipated prior to the latest reporting period, says The Kobeissi Letter.
This quarter saw 86% of S&P 500 firms surpass analyst targets, marking the highest beat rate in half a decade.
Communication Services earnings estimates jumped to 51% growth from the expected 26% at the start of the second quarter, while Consumer Discretionary forecasts rose to 32% from 12%, driven by Amazon’s (AMZN) results.
Energy and information technology sectors now face projections of 83% and 59% growth, respectively, reflecting broad gains from AI infrastructure spending.
“AI is driving astronomical profit growth.”
The Kobeissi Letter highlights that AI is now “single-handedly carrying the global economy.”
“The fact that the S&P 500 is 2.5% away from a record high despite the bond market looking like this is remarkable.
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