From the Desk

Market insights from our investment teams

Week of  October 5, 2026

Dec Mullarkey

Managing Director, Investment Strategy and Asset Allocation
LinkedIn

Earnings season is about to kick off for the S&P 500 Index. And consensus expects those results to run high. Earnings-per-share (EPS) is expected to grow 27% year-over-year. Two themes that are likely to dominate are the pace of the AI buildout and the results from energy producers.

AI effects are expected to show up in strong gains for information technology, communication services, materials and industrials companies. Estimates are for hyperscalers to account for nearly one fifth of EPS growth, with 45% more from other AI-related companies – with chip companies a large part of that. All this certainly underscores the omnipotence of AI, in that it is expected to drive about two thirds of EPS growth.

Some trends from the last several quarters are likely to continue. Hyperscaler revenue is expected to grow by 50% year over year with forward committed revenue also growing. Technology margins have remained strong. And while analysts eventually expect some profit pressures, for now they are not revising margins downward. 

At their most basic level, earnings are backward looking. Therefore, following the third quarter the market will start pushing companies for their forward earnings views for next year. Right now, analysts remain optimistic about the growth outlook and seem little concerned by rising rates. But it will be interesting to hear what companies have to say about that on their earnings calls.   

Sources: Bloomberg, The Financial Times, 2026.

The information may include statements which reflect expectations or forecasts of future events. Such forward-looking statements are speculative in nature and may be subject to risks, uncertainties and assumptions and actual results which could differ significantly from the statements. All opinions and commentary are subject to change without notice. SLC Management is not affiliated with, nor endorsing, any third parties mentioned within this article.

Market insights are based on individual author opinions and market observations. SLC Management investment teams may hold different views and/or make different investment decisions. These are observations only and are not intended to provide specific financial, tax, investment, insurance, legal or accounting advice and should not be relied upon and do not constitute a specific offer to buy and/or sell securities, insurance or investment services. Investors should consult with their professional advisors before acting upon any information posted here. 

SLC-20261008-6003133

Timely insights, five minutes a week

Never miss an episode - streaming on Apple, Spotify and Google.

Listen now

I understand that I can unsubscribe at any time and acknowledge that this email address belongs to me. Learn more about privacy and how we collect data to give you relevant content.