Nine tech stocks are powering the enthusiasm for corporate earnings this year.
The analysis: Upward earnings revisions for the tech sector this year have mostly come from memory chip names in Sandisk (SNDK), Micron (MU), Lumentum Holdings (LITE), Intel (INTC), Western Digital (WDC), and Seagate Technology (STX), according to new research from Evercore ISI strategist Julian Emanuel. These six names have seen analyst earnings estimates increase by 50% or more for 2026.
The bullish profit vibe is also evident in the consumer discretionary sector. Amazon’s (AMZN) earnings estimates have been revised higher by 10% year to date, the third-highest in its sector. However, more than 50% of the discretionary names in the sector have seen downward estimate revisions to their 2026 numbers since the start of the year.
Alphabet (GOOG, GOOGL) and Meta’s (META) latest earnings reports have fueled 25% and 10% upward 2026 EPS revisions, respectively, since the start of the year.
AI’s impact on profit estimates: Wall Street’s earnings optimism is clearly running hot on AI, which makes sense.
The five hyperscalers alone — Alphabet, Amazon, Meta, Microsoft (MSFT), and Oracle (ORCL) — are expected to unleash $520 billion in AI capital expenditures in 2026, a roughly 30% jump from the prior year. This kind of spending doesn’t happen without a serious conviction that the returns on investment are coming.
Morgan Stanley’s research team recently noted that 21% of S&P 500 (^GSPC) companies are now flagging concrete AI benefits on earnings calls — up from just 10% in 2024. This signals AI is moving fast from hype to tangible margin benefits.
Companies applying AI broadly to their products and customer experience are banking profit margins that are nearly 4 percentage points higher than non-adopters, per PwC. That gap is only going to widen as the technology matures.
With $2.9 trillion in global data center construction expected through 2028, the Street has every reason to keep lifting its profit estimates on the main players fueling the boom. That ranges from hyperscalers building the infrastructure to the memory chip companies.
Bottom line: Stocks trade on expectations of future earnings and cash flow. Right now, this is a market driven by a couple of handfuls of large tech stocks that the Street expects to perform admirably for the foreseeable future.
The bulls’ best hope is that these top tech names deliver big-time earnings this year — because the reality check won’t be pretty for the broader market if they miss.
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.
