Q3 Earnings Outlook: Positive Revisions & Broad-Based Growth

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>

Here are the key points:

• The overall earnings picture has been positive over the last two years, but it has not been this strong in quite some time. The earnings growth pace is not only strong and accelerating but also broad-based and continuing to improve. In other words, we are experiencing a very favorable earnings setup for the market.

• For 2026 Q3, the expectation is that total S&P 500 earnings will increase +22.6% from the same period last year on +10.9% higher revenues, with 14 of the 16 Zacks expected to enjoy positive earnings growth and 5 sectors producing double-digit growth. This will be the most broad-based earnings growth performance in recent times.

• The revisions trend remains positive, sustaining the favorable revisions trend that has been in place for a year now. Since the start of Q3 in July, earnings estimates have moved higher for half of the 16 Zacks sectors.

• Alphabet GOOGL, Micron MU, and Nvidia NVDA continue to be material contributors to the Tech sector’s growth picture. Excluding these three companies, Q3 earnings for the rest of the Tech sector would be +18.9% (vs. +39.3% otherwise).

The Earnings Big Picture

The chart below shows S&P 500 expectations for 2026 Q2 in terms of what was achieved in the preceding four periods and what is currently expected for the following three quarters.

The chart below shows the overall earnings picture for the S&P 500 index on an annual basis.

The chart below shows the significant contribution of the Tech sector to the aggregate growth picture. The chart also shows how critical Nvidia, Micron, and Alphabet are to the 2026 aggregate growth tally.

The favorable revisions trend noted earlier in the context of Q3 estimates is also at play with estimates for the last quarter of the year, with mostly the same sectors enjoying positive revisions.

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This article originally published on Zacks Investment Research (zacks.com).

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