The S&P 500’s fourth-quarter earnings season, now 85 per cent complete, is poised to record its fifth consecutive quarter of double-digit earnings growth, according to Strategas Securities’ Ryan Grabinski. Technology, industrials, and materials sectors spearheaded this growth, a trend attributed to the ongoing AI-driven capital expenditure cycle. Nvidia, a key player, accounts for almost one-quarter of the technology sector’s net income and about 5 per cent of the total index earnings.
Revenue growth also showed strength, accelerating to 8.8 per cent from 8.3 per cent in the previous quarter. However, Grabinski cautioned that maintaining this accelerated revenue growth could become increasingly difficult as comparisons become more demanding. He noted that Nvidia’s earnings report this week is likely the last one with the potential to significantly influence the broader market narrative, given its substantial impact on the technology sector and the broader market.
Looking ahead, consensus estimates project S&P earnings per share (EPS) growth of 14.3 per cent and 15.7 per cent for 2026 and 2027, respectively. Grabinski suggests that these high expectations set a demanding benchmark for earnings performance over the next 22 months. As a key revenue driver and funding source within the AI ecosystem, any surprise in Nvidia’s performance could reverberate through markets and substantially affect the broader growth outlook.
