{"slug": "corporate-earnings-soared-in-q2-with-ai-as-the-growth-engine-chart-of-the-day", "title": "Corporate earnings soared in Q2, with AI as the 'growth engine': Chart of the Day", "summary": "Bank of America reported that with nearly 90% of S&P 500 companies having released second quarter earnings, about 80% posted year-on-year EPS growth, placing the quarter in the 94th percentile, and the index is on track for four consecutive quarters of EPS growth exceeding 20%, a feat achieved only 10 times since 1936. BofA strategists led by Savita Subramanian noted that AI remained the index's primary growth engine, with median AI-related stocks seeing EPS growth of 28% versus 12% for non-AI stocks, but warned that growth is expected to decelerate in 2027, potentially weakening equity returns. JPMorgan Chase's equity strategy team led by Dubravko Lakos-Bujas raised their year-end S&P 500 target to 8,000 from 7,800, implying about 3% appreciation from Friday's close.", "body_md": "As the second quarter earnings season begins to wind down, Wall Street and Main Street alike are tallying up the scores, and the numbers have been unquestionably strong.\n\nWith just under 90% of companies in the S&P 500 ([^GSPC](https://finance.yahoo.com/quote/^GSPC/)) having released second quarter earnings, roughly 80% have reported year-on-year EPS growth, putting the quarter in the 94th percentile for the metric, per Bank of America research.\n\nThose results, plus Wall Street consensus forecasts for the third and fourth quarters, put the S&P 500 on track for four consecutive quarters of EPS growth exceeding 20%, per BofA, a phenomenon that has only happened 10 times since 1936.\n\nPart of that story, according to** **Bank of America strategists led by Savita Subramanian, is the AI boom that has largely been driving the US equity market.\n\nThe second quarter has seen broad earnings growth, with 10 out of 11 sectors on pace for positive year-on-year movement, BofA noted. Yet, \"even so, AI remained the index's primary growth engine,\" the strategists wrote. While the median AI-related stock notched EPS growth of 28%, the median non-AI-related stock saw growth of just 12%.\n\nBut that strength isn't likely to last forever, the strategists said. While consensus expectations remain strong for the third and fourth quarters, EPS growth is expected to decelerate in 2027, which the strategists said may muddle investors' perceptions.\n\nThe question for investors now is what happens when that torrential growth slows down.\n\n\"Markets tend to become less supportive as earnings growth decelerates, with years of above-trend but slowing EPS growth typically producing weaker equity returns,\" the strategists wrote.\n\nApollo Global Management's Torsten Sløk made the same point over the weekend, with data pointing out that while profit margins have been steadily surging in the tech sector, everywhere else in the market has seen little to no profit margin expansion — another sign of how dependent the major indexes have become on the AI boom for their returns. (Disclosure: Yahoo is a portfolio company of funds managed by affiliates of Apollo Global Management.)\n\n\"The bottom line is that the AI capex boom is so far only showing up in the sellers' margins, not the buyers',\" Sløk wrote. \"This is important because the longer it takes the S&P 493 to generate ROI, the bigger the downside risks to an economy and a market this concentrated in the AI trade.\"\n\nThat doesn't mean there isn't still a good amount of optimism on Wall Street,\n\nOn Monday, JPMorgan Chase's equity strategy team, led by Dubravko Lakos-Bujas, raised their year-end S&P 500 target to 8,000 from 7,800, which, if reached, would mark a roughly 3% appreciation from where the index closed on Friday.", "url": "https://wpnews.pro/news/corporate-earnings-soared-in-q2-with-ai-as-the-growth-engine-chart-of-the-day", "canonical_source": "https://ca.finance.yahoo.com/news/corporate-earnings-soared-in-q2-with-ai-as-the-growth-engine-chart-of-the-day-173507179.html", "published_at": "2026-08-10 17:35:07+00:00", "updated_at": "2026-08-10 17:39:25.087604+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-policy"], "entities": ["Bank of America", "Savita Subramanian", "S&P 500", "Apollo Global Management", "Torsten Sløk", "JPMorgan Chase", "Dubravko Lakos-Bujas"], "alternates": {"html": "https://wpnews.pro/news/corporate-earnings-soared-in-q2-with-ai-as-the-growth-engine-chart-of-the-day", "markdown": "https://wpnews.pro/news/corporate-earnings-soared-in-q2-with-ai-as-the-growth-engine-chart-of-the-day.md", "text": "https://wpnews.pro/news/corporate-earnings-soared-in-q2-with-ai-as-the-growth-engine-chart-of-the-day.txt", "jsonld": "https://wpnews.pro/news/corporate-earnings-soared-in-q2-with-ai-as-the-growth-engine-chart-of-the-day.jsonld"}}