Analysts raised their S&P 500 third-quarter 2026 earnings estimates during the quarter, reversing a pattern in which estimates usually fall. By September 30, expected year-over-year earnings growth had climbed to 29.5%, from 26.7% at June 30. The reasons are stronger revisions, unusually positive company guidance and growth forecasts across sectors—but a relatively small group of AI-related stocks is expected to supply much of the index’s growth. These are forecasts, not final Q3 results.
1. Analysts raised estimates instead of cutting them
FactSet’s October 2, 2026 preview put the S&P 500’s bottom-up Q3 earnings-per-share (EPS) estimate 1.4% higher on September 30 than it had been on June 30. That is an unusual direction for estimates to move during a quarter: over the previous 20 quarters, the estimate fell by an average of 2.2%; over the previous 40 quarters, it fell by an average of 2.5%.
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A shorter-window reading from FactSet’s September 4 report showed the same pattern. The Q3 estimate rose 1.2% from $88.64 on June 30 to $89.69 on August 31, compared with average declines over the first two months of 1.7% across five years and 2.1% across ten years. The June-to-August figures and the full-quarter figures use different endpoints, so they should not be treated as the same measurement.
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|---|---|---|
| June 30–September 30, 2026 | Up 1.4% | Average decline of 2.2% over the prior 20 quarters; 2.5% over the prior 40 quarters |
| June 30–August 31, 2026 | Up 1.2%, from $88.64 to $89.69 | Average first-two-month decline of 1.7% over five years; 2.1% over ten years |
Source: FactSet, October 2, 2026 preview and September 4, 2026 report. FactSet’s market EPS series may use GAAP or non-GAAP EPS at the security level.
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2. More companies gave positive earnings guidance
Analyst revisions were accompanied by upbeat company forecasts. By FactSet’s October 2 cutoff, 116 S&P 500 companies had issued Q3 EPS guidance: 72 positive and 44 negative. The positive share—62%—was well above the historical comparisons in FactSet’s preview.
| Measure | Q3 2026 as of October 2 | Five-year average | Ten-year average |
|---|---|---|---|
| Share of guidance that was positive | 62% (72 of 116 companies) | 40% | 41% |
| Number of companies with positive guidance | 72 | 42 | 40 |
Source: FactSet, October 2, 2026 preview. The count is limited to companies that had issued guidance by that date; it does not describe every S&P 500 company.
3. Those signals lifted the expected growth rate
With estimates moving up, FactSet’s expected year-over-year S&P 500 earnings growth rate rose from 26.7% on June 30 to 29.5% on September 30. The same preview put expected Q3 revenue growth at 12.3%, up from 10.9% on June 30.
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| Forecast | June 30, 2026 | September 30, 2026 |
|---|---|---|
| Year-over-year EPS growth | 26.7% | 29.5% |
| Year-over-year revenue growth | 10.9% | 12.3% |
Source: FactSet, October 2, 2026 preview. These were pre-results forecasts. FactSet said that, if the earnings estimate were realized, Q3 would mark a third consecutive quarter above 25% growth and an eighth consecutive quarter of double-digit growth; those streaks are conditional on the forecast, not confirmed results.
4. Growth was forecast across sectors, but not evenly
FactSet projected year-over-year earnings growth in all 11 S&P 500 sectors, with double-digit growth in five. Energy, Information Technology, Communication Services and Materials were among the leaders. Revenue was also forecast to grow in every sector, led by Information Technology, Energy and Communication Services.
Broad sector coverage does not mean each sector contributes the same amount to index growth. State Street’s October 12 review of FactSet data said Technology, Communication Services and Consumer Discretionary generated roughly 75% of total S&P 500 earnings growth in each of Q1 and Q2 2026. That is historical context about the first two quarters, not a Q3 contribution forecast.
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Sources: FactSet, October 2, 2026 preview; State Street Investment Management, October 12, 2026 review.
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5. A handful of AI-related stocks may account for a large share
The headline growth forecast has a concentration caveat. Axios reported on October 13 that Goldman Sachs analyst Ben Snider expected AI infrastructure stocks to drive more than half of Q3 S&P 500 EPS growth. More than two-thirds of expected growth was attributed to 10 stocks, with Micron and Nvidia alone expected to contribute more than one-third.
“At the stock level, AI infrastructure stocks are expected to drive more than half of S&P 500 EPS growth in Q3,” Snider said, as quoted by Axios. That is an analyst estimate about the expected contribution to index growth, not a claim that most companies will produce similar growth.
Q2 provides a separate reason to be cautious about headline index figures. State Street reported that 85.8% of S&P 500 companies beat Q2 expectations, but the median company’s beat was 5.8%, far below the 26.0% aggregate index-level surprise. The gap illustrates how index-weighted totals can be driven disproportionately by large companies.
There is also a broader corporate-profit figure, but it measures something different: the U.S. Bureau of Economic Analysis reported that after-tax corporate profits rose 18.2% year over year in Q2 2026, as reported by Axios. That economy-wide realized-profit measure is not directly comparable with FactSet’s forecast for S&P 500 Q3 EPS. Axios also noted that Q2 S&P 500 earnings included large non-operating valuation gains from Amazon and Alphabet’s technology investments, another reason not to treat the prior quarter’s aggregate figures as a like-for-like comparison with Q3 expectations.
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Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Sources: Axios, October 13, 2026; State Street Investment Management, October 12, 2026.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What to take from the optimism
Wall Street’s upbeat Q3 outlook rests on evidence that estimates and company guidance moved in a more favorable direction than usual, lifting the index growth forecast. But the 29.5% figure was still an estimate as of September 30, and the expected contribution was concentrated in a small set of stocks. A strong index forecast therefore does not establish that the typical S&P 500 company will grow earnings at the same rate.
FactSet describes its earnings preview as informational, not legal, tax or investment advice.
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