Amazon Drives S&P 500 Earnings Growth for Q2 Above 45% On Valuation Gains

During the past week, the (blended) earnings growth rate for the S&P 500 for the second quarter increased to 47.4% from 38.0%. If 47.4% is the actual growth rate for the quarter, it will mark the highest year-over-year earnings growth rate reported by the index since Q2 2021 (91.6%). Eight sectors are now reporting double-digit earnings growth for Q2 2026, led by the Energy (135.3%), Communication Services (109.8%), Consumer Discretionary (90.7%), and Information Technology (69.4%) sectors.

Given the substantial increase in the Q2 earnings growth for the S&P 500 during the past week, which companies were the largest contributors to this increase?

At the company level, the positive EPS surprise reported by Amazon.com ($5.75 vs. $1.82) was the largest contributor to the increase in the Q2 earnings growth rate for the S&P 500 during the past week. This company alone accounted for 76% of the net dollar-level increase in earnings for the S&P 500 over this period.

However, it should be noted that EPS reported on a GAAP basis by Amazon.com was used for both the earnings surprise and the earnings growth rate calculations, as the majority of analysts contributing EPS estimates to FactSet for Amazon.com are providing EPS estimates on a GAAP basis for this company. Historically, Amazon.com has only reported EPS numbers on a GAAP basis.

While all publicly traded U.S companies report EPS on a GAAP (generally accepted accounting principles) basis, many U.S. companies also choose to report EPS on a non-GAAP basis. There are mixed opinions in the market about the use of non-GAAP EPS. Supporters of the practice argue that it provides the market with a more accurate picture of earnings from the day-to-day operations of companies, as items that companies deem to be one-time events or nonoperating in nature are typically excluded from the non-GAAP EPS numbers. Critics of the practice argue that there is no industry-standard definition of non-GAAP EPS, and companies can take advantage of the lack of standards to exclude items that (more often than not) have a negative impact on earnings to boost non-GAAP EPS.

It is important to note that the (GAAP) EPS actual for Amazon.com for Q2 2026 included non-operating, pre-tax other income of $53.4 billion, primarily from investments in Anthropic. However, as previously stated, the vast majority of analysts providing EPS estimates to FactSet used the (GAAP) actual EPS of $5.75 including the other income as the comparable number to their estimates.

As a result, Amazon.com is now the second-largest contributor to year-over-year earnings growth for the S&P 500 for Q2 2026, trailing only Alphabet. Last week, Alphabet also reported an unusually large EPS surprise due to (GAAP) EPS that included a net gain of $98.0 billion primarily due to net unrealized gains on equity securities. For more details, please see this article: Alphabet Drives S&P 500 Earnings Growth to Highest Level Since 2021 On Valuation Gains.

If Alphabet and Amazon.com were excluded, the blended earnings growth rate for the S&P 500 for Q2 2026 would fall to 28.8% from 47.4%. Thus, even excluding Alphabet and Amazon.com, the S&P 500 would still be reporting its 2^nd consecutive quarter of year-over-year earnings growth above 20% and 7^th consecutive quarter of double-digit earnings growth.

*Not in order of contribution

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