Will tech giants drive another US earnings beat?

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The bulk of US earnings season heavy lifting is set to be done by NVIDIA Corp (NASDAQ:NVDA) and other AI-led semiconductor companies as Wall Street gears up for another strong quarter.

And despite headwinds and uncertainty from the Middle East war, traders expect forward guidance to confirm that the outlook for 2026 largely remains intact.

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The busiest reporting days fall in the week of 27 April to 1 May, including the quarterly figures of Microsoft Corp (NASDAQ:MSFT), Meta Platforms Inc Class A (NASDAQ:META), Alphabet Inc Class A (NASDAQ:GOOGL), Amazon.com Inc (NASDAQ:AMZN) and Apple Inc (NASDAQ:AAPL). Nvidia is due on 20 May.

About 20 S&P 500 companies, mostly with February quarter-ends, have already set a positive tone in results up to last Friday after 70% beat on earnings per share and 90% on sales.

Top performers included Micron Technology Inc (NASDAQ:MU), which posted record figures for revenue, gross margin, earnings per share and free cash flow in the quarter.

The company, which is one of just three global suppliers of high-bandwidth memory used in AI accelerators, reported a strong demand environment and tight industry supply.

It expects further growth in the current quarter, although shares initially fell due to the firm’s heavy spending plans. They have since jumped by a third on their level on 30 March.

Micron has benefited from the artificial intelligence (AI) boom that has supercharged chip demand at Nvidia, one of its biggest customers. 

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Together, profits for Nvidia and Micron are on course to rise more than 150% in the opening quarter of 2026, which if achieved would account for well over one-third of S&P 500 earnings growth in the three-month period.

UBS Global Wealth Management said on Friday that it sees overall quarterly S&P 500 corporate profit growth of about 17%, which is three percentage points above Wall Street forecasts.

This would be the fastest pace since the fourth quarter of 2021, when earnings surged amid the recovery from Covid. 

The acceleration is driven by the combination of broad-based strength and surging demand for semiconductors from the AI buildout. 

The bank told clients: “The growth rate for the median company in the S&P 500 should be a respectable 8-9%. But AI data-centre demand is driving blistering growth for some of the semiconductor companies.”

The bank expects above-average growth from other sectors including financials and materials, but with the effect of higher oil prices set to have a bigger impact in the second quarter.

While many companies will likely call out some headwinds owing to the war, the bank believes the overarching message will be “resilience”.

It notes recent comments from consumer-focused companies such as Delta Air Lines Inc (NYSE:DAL), Walmart Inc (NASDAQ:WMT) and Carnival Corp (NYSE:CCL), which all suggest largely stable demand trends despite higher oil prices. 

UBS recently tweaked its S&P 500 price targets lower, including a 200 point downgrade to its end-of-year forecast at 7,500. The benchmark last night closed at 6,886, which is above its pre-war level on February 27 and a recovery of 8.5% on its low seen on 30 March.

This marked its second-best run across a time frame of nine sessions in the past four years, only bettered by the bounceback seen after Liberation Day in April 2025.

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UBS has left its earnings per share estimate for 2026 unchanged at $310, representing a rise of 11% as slightly lower growth for consumers of energy is offset by higher expectations for semiconductors and the energy sector.

Bank of America expects earnings growth of 15% in the first quarter, which would represent a sixth consecutive period of double-digit improvement.

It notes that foreign exchange will be a two percentage point tailwind, the largest since 2021 after the dollar index fell nearly 8% year-on-year on average in the first quarter.

The bank adds that earnings estimates have continued to climb, even since the outbreak of the Iran conflict. The revisions have been strongest in energy and technology, specifically Micron after it reported its results in mid-March.

Oil shocks tend to weigh on consumption with a three or four-quarter lag, meaning minimal cuts to earnings expectations in consumer discretionary sectors so far. It adds that energy costs are a manageable portion of S&P 500 operating costs, with labour a much bigger component. 

For short-term investors, the bank pointed out that the earnings season is a good time to be a stock picker given the wider dispersion of daily stock returns on busy reporting days.