Wall Street just got a lot more optimistic about corporate America’s bottom line. Full-year 2026 earnings growth projections for the S&P 500 have surged to 32%, up from 24% before second-quarter results started rolling in. The culprit, if you can call it that, is a tidal wave of AI-related spending that’s lifting profits across sectors most analysts didn’t even associate with artificial intelligence a year ago.
The revision, reported as of September 9, reflects a remarkable Q2 reporting season where 86% of S&P 500 companies beat analyst expectations. That’s the highest beat rate since 2021, when companies were clearing a pandemic-era bar that had been set deliberately low.
The AI spending engine keeps accelerating
The primary driver behind these rosy numbers is the hyperscaler capital expenditure boom. Amazon, Microsoft, and their mega-cap peers are pouring money into data centers and AI infrastructure at a pace that makes previous tech investment cycles look modest. Capital expenditure forecasts for 2026 among major hyperscalers are projected to exceed $754 billion, a figure that rivals the entire GDP of countries like the Netherlands.
The communication services sector has been revised up to a projected 51% earnings growth. Consumer discretionary is tracking at 32% growth, buoyed in part by Amazon’s dual role as both an AI infrastructure company and the world’s largest online retailer.
