More good news in biggest week for US results
Another round of encouraging corporate results could mean upside risk to Wall Street profit forecasts. Graeme Evans explains.
28th July 2026 15:00
by Graeme Evans from interactive investor
The US earnings season today produced more cheer after quarterly results by Coca-Cola Co (NYSE:KO) fuelled hopes that the rally of the S&P 500 index is broadening from the AI arms race.
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Coca-Cola shares opened in record territory as the global drinks giant raised its full-year guidance, supported by volume growth and improved margins.
The advance came at the start of peak week for US results, with hyperscalers Microsoft Corp (NASDAQ:MSFT), Meta Platforms Inc Class A (NASDAQ:META) and Amazon.com Inc (NASDAQ:AMZN) among the 35% of the S&P 500 by market cap due to report.
Reports by another 30% of the S&P 500 have already shown that 81% of companies topped estimates for earnings per share, versus the typical figure of 74%. The median beat is an impressive 7.2% compared with the usual 3.5%.
Earnings growth is tracking at 24% in the second quarter, although Bank of America expects this year-on-year rate to move up to its 28% forecast as more companies report.
The S&P 500 index today opened above 7,400, having surged by 17% since the end of March and by 8% so far in 2026.
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UBS Global Wealth Management believes that the bull market has further to go after recently backing the benchmark to reach 8,200 by next June.
It said that key drivers of the strong recent run remain intact, including solid earnings growth, supportive monetary policy and AI investment and adoption.
The current results season has so far seen Wall Street stick with its estimates for the third quarter as management teams suggest no slowdown in earnings strength.
UBS's expectations for a broadening equity rally have been boosted by encouraging signs beyond the AI complex.
On the more cyclical side, it noted that American Express Co (NYSE:AXP) had seen no sign of a broad pullback in consumer spending while Capital One Financial Corp (NYSE:COF) results showed an improvement in its credit card delinquency rate.
UBS added yesterday: “If earnings season continues at this pace, there is upside risk to our S&P 500 EPS estimates. Second-quarter growth could be higher than 30%, better than our initial estimate of 28%.”
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Google owner Alphabet Inc Class A (NASDAQ:GOOGL) has been one of the biggest names to report so far although shares fell 7% the next day as capital expenditure (capex) concerns overshadowed strong Cloud results.
The results signalled further strength in the AI investment cycle as Alphabet upped its capex guidance range for this year by 8% to $195-205 billion and said that this is expected to be followed by a significant increase in 2027.
Bank of America said Wall Street consensus now suggested that the five big hyperscalers, including Oracle Corp (NYSE:ORCL), will increase capex by 85% in 2026 after a jump of 73% in 2025.
Across the S&P 500, capex grew by 33% in the first quarter in what was the strongest pace since 2001. This is expected to accelerate to 40% in the second quarter, which would be the highest level in BofA data history back to 1987.
While tech has driven the bulk of spending, the bank said a recent survey of chief executives was a sign of a broader-based uptick after 50% forecast higher capex over the next six months.
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Meta Platforms and Microsoft are due to report after Wednesday's closing bell, followed by Apple Inc (NASDAQ:AAPL) and Amazon on Thursday evening.
Palantir Technologies Inc Ordinary Shares - Class A (NASDAQ:PLTR) and Berkshire Hathaway Inc Class B (NYSE:BRK.B) are on 3 August before Elon Musk's Space Exploration Technologies Corp Class A (NASDAQ:SPCX) makes its results debut after the market has closed on 4 August. NVIDIA Corp (NASDAQ:NVDA) reports results on 26 August, with Micron Technology Inc (NASDAQ:MU) not until the end of September.
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