Image Source: Unsplash
 

• The outlook for corporate earnings has been improving in recent quarters, as reflected in steadily rising earnings estimates. As the 2025 Q4 earnings season really gets underway in the coming days, the market will be looking for this favorable trend to not only remain in place but actually expand beyond the few key sectors where it has been concentrated lately. 
• For 2025 Q4, total S&P 500 earnings are currently expected to be up +7.9% from the same period last year on +8.2% higher revenues. This will be the 10^th quarter of back-to-back positive earnings growth for the index.
• Looking at the calendar year picture, total S&P 500 earnings are expected to grow by +12.9% in 2026, with the growth pace dropping to +9.3% when the Tech sector’s contribution is excluded.
• All 16 Zacks sectors are expected to enjoy positive earnings growth in 2026, the first time since 2018, with nine sectors expected to achieve double-digit growth, including Aerospace (+38.2%), Autos (+22.6%), Basic Materials (+20.3%), Tech (+19.9%), Transportation (+13.6%), and Industrials (+11.1%).
• Q4 earnings for the ‘Magnificent 7’ group of companies - which includes the likes of NVIDIA (NVDA - Free Report), Apple (AAPL - Free Report), and Tesla (TSLA - Free Report) - are expected to be up +17.3% from the same period last year on +16.5% higher revenues. Excluding the ‘Mag 7’ contribution, Q4 earnings for the rest of the index would be up only +4.6% (vs. +7.9%).

Tech Remains Earnings Growth Driver
 

The Tech sector has been driving aggregate earnings growth since 2023 Q3, and the trend is expected to continue in 2025 Q4 and beyond. For Q4, Tech sector earnings are expected to be up +15.4% from the same period last year on +16.3% higher revenues, the 10^th quarter in a row of double-digit earnings growth.

This would follow the sector’s +27.3% earnings growth on +15.5% higher revenues in 2025 Q3. But as the chart below shows, the sector’s growth trajectory is expected to continue in the coming quarters.
 

Image Source: Zacks Investment Research
 

In addition to the Tech sector’s strong growth profile, the sector is also among the few sectors whose earnings outlook is steadily improving. This shows up in the revisions trend that continues to remain positive for the Tech sector, both for Q4 as well as for full year 2026.

For calendar year 2026, the Zacks Tech sector is currently expected to enjoy +19.9% earnings growth, which would follow the sector’s expected +20.0% earnings growth in 2025.
 

Image Source: Zacks Investment Research

The Tech sector has not only been the largest contributor to aggregate earnings growth, but it has also been enjoying persistent positive estimate revisions, a trend that continues for 2026. The chart below shows the evolution of aggregate 2026 Tech sector earnings estimates since the start of July 2025.
 

Image Source: Zacks Investment Research

The Earnings Big Picture
 

The chart below shows expectations for 2025 Q4 in terms of what was achieved in the preceding four periods and what is currently expected for the next four quarters.
 

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

The Tech sector has an outsized role in the S&P 500 index. The sector is expected to bring 35.9% of the index’s total earnings over the coming four-quarter period and currently accounts for 43.1% of the index’s total market capitalization. The Tech sector’s positive estimate revision trend is a major reason its members enjoy a strong market following and support.

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