The S&P 500 Has Only Grown Earnings This Fast Twice Before. History Says This Is What Happens Next
Yahoo Finance ·
2026 is emerging as a banner year for the S&P 500 ( ^GSPC -0.77% ) . Not necessarily for the index's price growth, which is up 12.6% year-to-date, but because of its earnings growth. Analysts now expect S&P 500 earnings per share to grow 24%-32% this year, paced by blockbuster growth from AI stocks and the Magnificent Seven , as the Magnificent Seven now makes up about a third of the index, and it doesn't include breakout stocks like Micron , which are posting EPS growth rates above 1,000%. Nvidia , for example, is expected to grow EPS by 95% this year, driven by soaring demand for its chips, which form the backbone of AI infrastructure . Amazon is on track to grow EPS by 79%, benefiting from a massive one-time equity gain on Anthropic, while also seeing its cloud business reaccelerate. Alphabet is similarly realizing a large gain from Anthropic and Space Exploration Technologies , and is expected to grow generally accepted accounting principles ( GAAP ) earnings by 90%. It's rare for S&P 500 earnings to grow by 25% in a single year when it's not recovering from a recession or some kind of downturn. In fact, it's only happened two other times in the modern era. Let's take a look at what happened then and what it implies for the market today.
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