--- title: "Far Exceeding Expectations! The Just-Concluded Earnings Season Saw US Stocks Perform \"Stunningly Strong\"" type: "News" locale: "en" url: "https://longbridge.com/en/news/285827613.md" description: "US corporate earnings in the first quarter posted their best performance in 20 years, with S&P 500 constituents reporting a 27% year-over-year profit growth, more than double analysts' expectations. The \"Magnificent Seven\" tech giants saw profits surge by 57%. All 11 sectors of the S&P 500 recorded positive growth for the first time in four years. Several institutions promptly raised their full-year earnings forecasts" datetime: "2026-05-10T03:25:35.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/285827613.md) - [en](https://longbridge.com/en/news/285827613.md) - [zh-HK](https://longbridge.com/zh-HK/news/285827613.md) --- # Far Exceeding Expectations! The Just-Concluded Earnings Season Saw US Stocks Perform "Stunningly Strong" US corporate earnings are refreshing Wall Street expectations with a strength rarely seen in two decades. On May 8, according to data from Bloomberg Intelligence, the first-quarter earnings of S&P 500 constituents surged 27% year-over-year, more than doubling the previous analyst forecast of approximately 12%. This marks the fastest growth rate since 2004, excluding recovery periods from major economic shocks. Profits for the "Magnificent Seven" tech companies are expected to jump 57% in the first quarter, increasingly validating the earnings realization capability of AI investments. Geopolitical tensions were originally viewed as the biggest risk dragging down US stocks, but the strong earnings season has alleviated market concerns, while economic resilience has dispelled worries about a global growth slowdown. ## Magnitude of Beat Largest in Over a Decade The first-quarter earnings season in the US was the best in 20 years. The robust performance of this earnings season caught Wall Street off guard. According to Bloomberg Intelligence data, the extent to which S&P 500 constituents exceeded analyst expectations was the largest since 2013, excluding the pandemic period. Charles-Henry Monchau, Chief Investment Officer at Banque Syz, stated: > I cannot recall a time when the gap between sell-side consensus estimates and actual earnings was so wide. At the beginning of the year, he had bet on overseas markets outperforming. However, with the escalation of the situation in Iran and the evolution of the AI boom, he has tactically shifted his positions back to US stocks, pointing out that Europe is "not necessarily the winner in this war." US Bank in Minneapolis initially predicted that the S&P 500's earnings per share (EPS) would reach $305 in 2026. According to Robert Haworth, Senior Director of Investment Strategy at the bank's wealth management division, the strength of the first-quarter performance forced the bank to raise its full-year earnings forecast and its year-end target price for the S&P 500. He frankly stated: > Our expectations were clearly too low. ## Led by the "Magnificent Seven," All Industries Turn Positive Tech giants remain the main engine of this round of earnings growth. According to data compiled by Bloomberg Intelligence, the "Magnificent Seven"—comprising Nvidia, Microsoft, Alphabet, Amazon, Meta, Apple, and Tesla—are expected to see a 57% year-over-year increase in first-quarter profits. During the same period, earnings for the remaining 493 S&P 500 constituents are expected to rise by approximately 17%. (This week, the performance of the Magnificent Seven far exceeded that of the remaining 493 S&P 500 constituents) Thomas Martin, Senior Portfolio Manager at Globalt Investments, is relatively optimistic about the market outlook. He stated: > I cannot recall a period with such sustained earnings growth. We expect EPS to maintain double-digit growth throughout 2026, with AI driving growth for a considerable period. Wendy Soong, Equity Strategy Analyst at Bloomberg Intelligence, pointed out: > The market is catching up on the valuation of future profitability for AI-related companies. Although the conflict in Iran has caused supply chain disruptions, it has also attracted capital inflows into US assets due to risk diversification. **More notably, the strength has spread across the entire market.** As strategists at Deutsche Bank noted in a recent report, all 11 sectors of the S&P 500 recorded positive growth, a first in four years. Even sectors previously dragged down by tariff concerns and sluggish consumer sentiment, such as consumer cyclicals, telecommunications, and healthcare, have returned to a growth trajectory. Deutsche Bank subsequently raised its 2026 EPS forecast by nearly 7% to $342. Max Kettner, Chief Multi-Asset Strategist at HSBC, stated: > **For US stocks, especially large-cap stocks, as well as the credit market and the broader risk asset class, what truly matters is macroeconomic activity and earnings fundamentals.** Oil price trends and geopolitical tensions may be more critical for interest rate and foreign exchange markets. ## Can Growth Persist? Lingering Concerns Remain Strong earnings have not eliminated all risks, and multiple hidden dangers still hang over the market. The ongoing conflict in Iran continues to disrupt energy prices. The S&P 500 has rebounded more than 16% cumulatively from its March lows. Technical indicators show that the index has been hovering in overbought territory since mid-April, and the pressure for a short-term correction cannot be ignored. The recent sharp rise in semiconductor stocks has also triggered caution. According to Goldman Sachs data, hedge funds' underweight position in North American stocks relative to the global stock benchmark has reached a historical high. John Cunnison, Chief Investment Officer at Baker Boyer Bank, warned that maintaining the current momentum of earnings growth requires support from consumer spending and confidence. He said: > Consumer confidence is hovering near historic lows. This prosperity needs to benefit ordinary consumers, not just the wealthy, and translate into broader earnings growth beyond the tech industry. 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