Analysts now project 32% full-year profit growth for the S&P 500 in 2026, up from 24% before the latest earnings season, according to The Kobeissi Letter. The upgrade tracks a record beat rate this quarter and steep upward revisions in Communication Services, Consumer Discretionary, Energy and Information Technology.
Profit forecasts jump across the index
The Kobeissi Letter now expects the S&P 500 to post 32% profit growth for 2026, up from a 24% estimate before the latest reporting period. The revision follows a quarter in which 86% of S&P 500 companies beat analyst targets, the highest beat rate in half a decade.
According to The Kobeissi Letter: "AI is driving astronomical profit growth."
Four sectors lead the upgrade
Communication Services earnings estimates climbed to 51% growth, up from the 26% expected at the start of the second quarter. Consumer Discretionary forecasts followed a similar path: estimates rose to 32% from 12%, driven by Amazon's results.
Energy and Information Technology show the sharpest revisions. Energy now faces a 83% growth projection and Information Technology a 59% projection, which The Kobeissi Letter ties to broad gains from AI infrastructure spending.
AI's role in the index's level
The Kobeissi Letter also frames AI's role in the S&P 500's current level. It states that without AI, the S&P 500 would be at least 50% lower. Without the surge in oil prices, it adds, the index would be above 9,000. The index currently sits 2.5% away from a record high.
Agentic AI seen as a corporate efficiency driver
Beyond earnings, The Kobeissi Letter points to the enterprise agentic AI market as a further catalyst. It expects the market to grow from $2.6 billion to $24.5 billion by 2030, more than 9x its current size. Citing Gartner forecasts, it adds that 30% of enterprise applications are expected to embed autonomous agents by 2028, spanning customer service, operations, finance, HR and cybersecurity.
Source: The Daily Hodl
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