Nvidia, Micron, and Broadcom hold the stock market's fate in the palm of their hands

Goldman Sachs strategist Ben Snider estimates AI infrastructure stocks will contribute nearly 60% of S&P 500 EPS growth this quarter, with Nvidia, Micron, and Broadcom accounting for about 54% of total earnings growth. Investors are watching whether hyperscalers can justify AI capex, as corporate margins face inflation and supply chain disruptions.

Micron MU https://finance.yahoo.com/quote/MU/ and Nvidia NVDA https://finance.yahoo.com/quote/NVDA/ best deliver come earnings day, or else. Quick insight: Goldman Sachs strategist Ben Snider estimated that AI infrastructure stocks will contribute nearly 60% of S&P 500 ^GSPC https://finance.yahoo.com/quote/^GSPC/ EPS growth this quarter. The top 10 contributing stocks are expected to account for nearly 75% of total S&P 500 earnings growth in Q2, with Micron, Nvidia, Exxon XOM https://finance.yahoo.com/quote/XOM/ , and Broadcom AVGO https://finance.yahoo.com/quote/AVGO/ accounting for about 54%. The why: Investors will have a lot to assess as second quarter reporting season kicks off in mid-July. For one, they must monitor whether hyperscalers like Microsoft and Alphabet GOOG https://finance.yahoo.com/quote/GOOG/ , GOOGL https://finance.yahoo.com/quote/GOOGL/ can justify their staggering capital expenditures to build out AI infrastructure. Wall Street will also be laser-focused on how corporate margins are holding up against 3% inflation and the lingering supply chain disruptions caused by the Iran war. Additionally, corporate guidance must be heavily scrutinized to determine if the widening "K-shaped" consumer gap is further dampening sales volume for discount retailers and discretionary products. And lastly, analysts will watch the financial sector for signs of credit tightening and loan stress, which could heavily influence the Federal Reserve's final interest rate choices for the remainder of the year. There's a lot to digest for a market still trading near its highs. And it's important that these key companies deliver big-time on earnings. "The 21% S&P 500 return over the past 12 months has been driven entirely by earnings, making the upcoming second quarter reporting season an important catalyst for the forward trajectory of the market," Snider said. Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories? Email brian.sozzi@yahoofinance.com. Click here for in-depth analysis of the latest stock market news and events moving stock prices Read the latest financial and business news from Yahoo Finance