In aggregate, the “Magnificent 7” companies have reported higher (year-over-year) earnings growth than the other 493 companies in the S&P 500 over the past several quarters. Is this trend expected to continue in Q3 2026?
The answer is yes. For Q3 2026, the estimated (year-over-year) earnings growth rate for the “Magnificent 7” companies is 33.2%. On the other hand, the blended (combines actual and estimated results) earnings growth rate for the remaining 493 companies in the S&P 500 for the third quarter is 27.7%.
The top two contributors to earnings growth for the “Magnificent 7” companies for Q3 are NVIDIA and Meta Platforms. If these two companies were excluded, the estimated (year-over-year) earnings growth rate for the remaining five “Magnificent 7” companies for Q3 2026 would fall to 7.5% from 33.2%. Thus, most of the expected earnings growth for the “Magnificent 7” companies for Q3 2026 is due to these two companies.
Overall, the top five top contributors to earnings growth for the entire S&P 500 for Q3 2026 are (in order of contribution): Micron Technology, NVIDIA, Meta Platforms, EchoStar Corporation, and Boeing.
Micron Technology and NVIDIA are the top two contributors to (year-over-year) earnings growth for the entire S&P 500 for Q3 2026. If these two companies were excluded, the blended earnings growth rate for the S&P 500 for Q3 would fall to 20.0% from 29.0%.
It should be noted that the other three top contributors (Meta Platforms, EchoStar Corporation, and Boeing) are all benefitting from easy comparisons to weaker earnings reported in the year-ago quarter due to charges and expenses that were included in their year-ago EPS. The year-ago (GAAP) EPS for Meta Platforms ($1.05) included a one-time, non-cash income tax charge of $15.93 billion. The year-ago (GAAP) EPS for EchoStar Corporation (-$44.37) included a one-time, non-cash impairment charge of $16.48 billion. The year-ago (non-GAAP) EPS for Boeing (-$7.47) included a pre-tax earnings charge of $4.9 billion on the 777X program.
It is also important to note that last quarter, Alphabet and Amazon.com reported GAAP EPS for Q2 2026 that included significant gains that boosted the overall earnings growth rate for the S&P 500 for the second quarter. The (GAAP) EPS actual for Alphabet for Q2 included a gain of $98 billion in other income primarily due to net unrealized gains on equity securities, while the (GAAP) EPS actual for Amazon.com for Q2 included a gain of $53.4 billion in other income primarily due to investments in Anthropic. As a result, Alphabet and Amazon.com were the top two contributors to (year-over-year) earnings growth for the S&P 500 last quarter, followed by Micron Technology, NVIDIA, and Chevron.
Meta Platforms and Tesla are the first two “Magnificent 7” companies scheduled to report earnings results for Q3 2026. Both companies are expected to report Q3 earnings on October 21.
Looking ahead, analysts predict the “Magnificent 7” companies will report lower (year-over-year) earnings growth than the other 493 S&P 500 companies for Q4 2026 (23.6% vs. 30.6%). If these are the actual growth rates for the quarter, it will mark the first time the “Magnificent 7” companies will have reported lower earnings growth than the other 493 S&P 500 companies since Q4 2022 (-30.6% vs. 1.6%).
*Not in order of contribution
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