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The Q3 earnings season has reconfirmed the broad-based strength that we have been seeing in recent reporting cycles. The earnings and revenue growth pace remains strong and broad-based. Even more notably, the revisions trend remains positive, with estimates for 2026 Q4 and full-year 2027 continuing to rise.
Total Q3 earnings for the 372 S&P 500 members that have reported results already are up +24.8% from the same period last year on +14.0% higher revenues, with 82.3% beating EPS estimates and 73.4% beating revenue estimates. The proportion of these 372 index members beating both EPS and revenue estimates (the ‘blended’ beats percentage) is 64.8%.
For the Tech sector, we now have Q3 results from 68.8% of the sector’s market capitalization in the index. Total earnings for these companies are up +33.1% from the same period last year on +28.8% higher revenues, with 83.6% beating EPS estimates and 88.5% beating revenue estimates.
Micron (MU - Free Report) and Nvidia (NVDA - Free Report) continue to be material contributors to the Tech sector’s growth picture. Excluding Nvidia, Micron, and Alphabet (GOOGL - Free Report), which enjoyed an outsized gain in the preceding period, Q3 earnings for the rest of the Tech sector would be up +27.7% (vs. +44.2% otherwise).
The Tech Sector Earnings Scorecard
The Tech sector in general and the broader AI basket in particular have been in the eye of the storm in recent weeks, with worries about data center buildout, funding, and permitting in the spotlight. These worries have been weighing on these stocks’ performance lately, as the one-month performance chart below of Micron, Alphabet, and the Zacks Tech sector relative to the S&P 500 index shows.
Image Source: Zacks Investment Research
We deliberately used Alphabet and Micron in the chart above as a proxy for the high-quality part of the AI basket. Both companies are particularly relevant from an earnings standpoint, with Micron posting blockbuster results at the start of the Q3 reporting cycle while Alphabet famously failed to impress on that score.
Alphabet is hardly alone in struggling to beat consensus estimates in Q3, as the performance of the Tech sector as a whole on this score has been at best average, as the comparison charts below show.
Image Source: Zacks Investment Research
These comparison charts show Q3 EPS and revenue beat percentages for 61 of the 88 S&P 500 companies that have already reported results. As you can see in the left-hand side chart, the Q3 EPS beat percentage for this group is actually tracking a hair below the average for the preceding 20 quarters for this same group of 61 Tech companies.
Looking at Q3 as a whole, combining the actual results that have come out with estimates for the still-to-come Tech companies, total earnings are on track to increase by +44.2% from the same period last year on +35% higher revenues.
The sector’s Q3 earnings growth pace drops to +27.7% from +44.2% once contributions from Micron, Alphabet, and Nvidia are excluded, as the chart below shows.
Image Source: Zacks Investment Research
The Earnings Big Picture
The chart below shows S&P 500 expectations for 2026 Q3, comparing what was achieved in the preceding four periods with what is currently expected for the following three quarters.
Image Source: Zacks Investment Research
We have shown how Q3 estimates have moved higher since the quarter got underway. Below, we show how estimates for the last quarter of the year have evolved in recent weeks.
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture for the S&P 500 index on an annual basis.
Image Source: Zacks Investment Research
As is the case with estimates for 2026 Q4, estimates for full-year 2027 are also moving higher, as the chart below shows.
Image Source: Zacks Investment Research
Since the beginning of July, estimates for 2027 have increased for 10 of the 16 Zacks sectors, with Tech, Energy, Finance and Industrials leading the way.
With 74.4% of the S&P 500 results already in, the revisions trend has remained consistently positive. We will keep a close watch on this key metric through the remainder of this reporting cycle.
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