U.S. — Alphabet reported GAAP earnings per share of $9.11 against an analyst estimate of $2.88. Both companies received a major lift from unrealized gains on investments recognized as other income.

The current earnings growth streak marks the seventh consecutive quarter of double-digit earnings growth for the S&P 500. Ten of 11 S&P 500 sectors are reporting year-over-year earnings growth. Nine of the 10 growing S&P 500 sectors are reporting double-digit earnings growth.

Energy sector earnings are up 146.3% year-over-year. Communication Services earnings are up 116.9% year-over-year. Health care is the only S&P 500 sector reporting a year-over-year profit decline, of approximately 6.5%.

S&P 500 earnings per share increased 31% from a year earlier in Q2 2026 when excluding one-off income related to private investment holdings. AI infrastructure companies generated approximately half of the S&P 500 earnings increase in Q2 2026. Earnings among AI infrastructure companies climbed 54% year-over-year in Q2 2026. Excluding the energy sector, the median S&P 500 company recorded earnings growth of 14% compared with the same period last year.

The term “AI” was cited on 305 S&P 500 earnings calls for Q2 2026. Only 11% of S&P 500 companies quantified productivity benefits from AI for a specific business application during their Q2 earnings calls. Just 2% of S&P 500 companies put a figure on AI's direct contribution to earnings in Q2 2026. Goldman Sachs estimates AI inference expenses represent less than 0.5% of S&P 500 revenues.

"Q2 results showed a small and statistically insignificant difference in earnings growth between the companies quantifying AI productivity gains this quarter and other S&P 500 companies," Goldman Sachs strategist Ben Snider said. Monthly AI expenditure per employee at the median company rose from $5 in January to $12 in July, according to the Ramp AI Index. Among companies in the top decile for AI spending, monthly expenditure per employee rose from $240 in January to $650 in July.

Home Depot has maintained 157 consecutive quarters of dividend payments, according to its Q2 2026 earnings report. Home Depot same-store sales increased by 1.7% in the fiscal second quarter. Consensus analyst estimates project Home Depot's fiscal 2028 revenue will be 12.4% higher than its 2025 total of $164.7 billion.

Why It Matters

The S&P 500 Shiller CAPE ratio hit 40 in June 2026. The S&P 500 Shiller CAPE ratio averaged roughly 15.7 from 1871 through 2000. The S&P 500 Shiller CAPE ratio topped 40 for the first time in early 1999. Extraordinary valuation gains, not operational improvements, are the primary driver of the record earnings growth, according to FactSet data and analysts. AI productivity gains are not yet significantly impacting earnings differentials across the S&P 500, according to Q2 Earnings Analysis.

Timeline

Alphabet and Amazon are responsible for most of the jump in the S&P 500 earnings growth rate since June 30.

Excluding Alphabet and Amazon, the blended earnings growth rate for the S&P 500 falls to 32.6%. The blended earnings growth rate for the S&P 500 in Q2 2026 is 51%.

What's New

Excluding Alphabet and Amazon, the S&P 500’s blended earnings growth rate of 32.0% in Q2 2026 would still represent the second consecutive quarter of growth above 25% and the seventh consecutive quarter of double-digit growth, per FactSet data. The Communication Services sector’s blended earnings growth rate surged to 117.0% in Q2 2026, driven by Alphabet’s $98 billion unrealized gains on equity securities, a 110-point increase from its pre-June 30 level of 7.2%. "Q2 results showed a small and statistically insignificant difference in earnings growth between the companies quantifying AI productivity gains this quarter and other S&P 500 companies."

Alphabet’s $98 billion unrealized gain on equity securities included $43 billion from its stake in Space Exploration Technologies (SPCX), per The Motley Fool’s analysis of Q2 2026 earnings. Home Depot has paid a dividend to shareholders in 157 consecutive quarters.

How Sources Differ

Sources differ on the blended earnings growth rate excluding Alphabet and Amazon.

Sources differ on the earnings growth rate excluding Alphabet and Amazon. FactSet analysis by John Butters states that the 32.6% earnings growth rate excluding Alphabet and Amazon would be the S&P 500’s highest since Q3 2021, when it hit 40.6%.

Sources differ on the blended earnings growth rate.

Sources differ on excluding earnings growth.

Sources differ on Alphabet blended earnings growth rate.

Sources differ on Alphabet Amazon earnings growth rate detail.

Sources differ on earnings growth consecutive quarter seventh double detail.

Sources differ on earnings growth double digit detail.