Analysts see S&P 500 earnings rising 31% in the third quarter

Technology and artificial-intelligence companies are expected to drive most of the projected increase. Investors are also weighing how long the current pace can last.

Analysts expect aggregate third-quarter earnings for S&P 500 companies to be 31% higher than a year earlier. About two-thirds of the increase is projected to come from technology and major AI-related companies, including Alphabet, Amazon.com and Meta, according to LSEG. The figure is a forecast, not a reported result.

Rising expectations helped the S&P 500 set a record this week ahead of earnings season. Reports from major banks, including JPMorgan Chase and Goldman Sachs, are expected to informally open the season next week. Investors will watch whether companies again beat analyst estimates, as they did in the second quarter.

LSEG data show S&P 500 earnings rose nearly 54% year over year in the second quarter. Excluding accounting gains at Alphabet and Amazon.com from AI-related investments, growth was about 35%. Sameer Samana of Wells Fargo Investment Institute said technology and AI could account for 70% to 80% of current growth.

Analysts expect energy-sector earnings to increase about 115% year over year. US oil prices rose roughly 30% in the third quarter, which the source report linked to geopolitical tensions. Chipmakers’ earnings are forecast to grow 136%, compared with 158% in the second quarter.

Some strategists warn that earnings growth may be nearing a peak. Anthony Saglimbene of Ameriprise Financial said some expectations depend on continued capital investment in AI and that investors are scrutinizing the future returns on that spending more closely. Other factors include higher borrowing costs and rising US Treasury yields amid concerns about inflation, oil prices and French government debt.