S&P 500 on Track for Best Earnings Season Since 2021

May 10, 2026 | Finance

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Summary

Last week delivered the clearest signal yet that Corporate America has absorbed the macro headwinds and come out stronger. With 89% of S&P 500 companies now reported, Q1 2026 is shaping up to be the most impressive earnings season in nearly five years — and the hardest tests are still landing this week.

The Season at a Glance

As of May 8, the blended earnings growth rate for S&P 500 companies in Q1 2026 stands at 27.7% year over year, according to FactSet — up from 27.1% the prior week and sharply above the 9.9% growth analysts had pencilled in at the start of the quarter. Revenue growth is running at 11.3%, with every single sector in positive territory for the top line.

The beat rate is the real story. 84% of companies have reported EPS above analyst estimates, which would be the highest quarterly rate since Q2 2021’s 87%. The five-year average is 78% and the ten-year average is 76%. Companies are coming in 18.2% above consensus on average — the five-year average is 7.3%.

Seven of the eleven S&P 500 sectors are reporting double-digit earnings growth, led by Information Technology, Communication Services, Materials, and Consumer Discretionary. The only sector in the red is Health Care, where large-cap pricing pressure and Medicaid-related exposure are dragging the aggregate.

“The Q1 2026 earnings season has been materially stronger than expected, with the S&P 500 tracking near 28% year-over-year earnings growth and beat rates well above historical medians.”

— Charles Schwab Market Outlook, May 2026

Forward guidance is holding up too. Analysts are calling for Q2 2026 earnings growth of 19.9%, Q3 at 23.2%, and Q4 at 20.7%.

Last Week’s Key Reports (May 4–9)

Disney: Streaming Turns the Corner

Walt Disney (DIS) reported fiscal Q2 2026 earnings on May 6 and delivered on both lines. Revenue came in at $25.17 billion, up 7% year over year and ahead of the $24.85 billion consensus. EPS of $1.57 beat the $1.50 estimate, sending the stock up roughly 7% in the session following the print.

The streaming unit was the standout. Entertainment SVOD revenue accelerated to 13% growth in Q2 from 11% in Q1, with streaming operating income rising 88% to $582 million. Theme parks posted their best-ever fiscal Q2 operating income of $2.6 billion — though domestic park attendance slipped 1%, partly reflecting softness in international tourism. Disney lifted its share repurchase target to at least $8 billion and guided for ~12% adjusted EPS growth for the full year.

Berkshire Hathaway: Greg Abel’s Opening Act

Under new CEO Greg Abel, Berkshire Hathaway posted operating earnings of $11.35 billion, up 18% year over year — but marginally below Wall Street’s $11.56 billion estimate. Insurance was a bright spot, with profit up 28% to $1.72 billion. The cash pile grew to a record $397 billion, up from $373 billion at year-end 2025.

“Greg Abel steps into one of the most scrutinised CEO chairs in American business with a decent first quarter — but the real test will be capital allocation decisions over the next 12 months.”

— Yahoo Finance, May 2026

Airbnb: Revenue Strength, Profit Softness

Airbnb (ABNB) posted mixed results. Revenue of $2.7 billion grew 18% year over year and beat the $2.62 billion estimate. Net income of $0.26/share missed the $0.29 consensus. Management upgraded its full-year revenue growth guidance from “approximately 12%” to “low-to-mid teens.”

Tyson Foods & DoorDash

Tyson Foods (TSN) cleared both bars in its fiscal Q2 2026 report — EPS of $0.87 vs. $0.82 estimate (+6.1%) and revenue of $13.65B vs. $13.54B expected. DoorDash (DASH) beat on the bottom line with EPS of $0.42 vs. $0.37 (+13.5%), but missed on revenue at $4.04B vs. $4.15B forecast. McKesson (MCK) beat EPS ($11.69 vs. $11.57) but missed revenue badly ($92.3B vs. $101.23B), reflecting pharmaceutical distribution mix shifts.

What the Data Is Actually Saying

The 27.7% blended growth figure lands against a backdrop that was supposed to be difficult. Tariff uncertainty, elevated rates, and a wobbling consumer were all cited as potential headwinds entering Q1. Instead, margins held, AI infrastructure investment drove outsized growth, and the consumer did not collapse.

What has been overlooked in most coverage: the 18.2% earnings beat margin is nearly 2.5× the five-year average. That gap is partially a result of analyst sandbagging after tariff-shock uncertainty in Q4 2025, but also reflects genuine operational leverage — particularly in tech, where AI is compressing unit costs faster than analysts modelled.

This Week’s Earnings to Watch (May 11–17)

The volume of reporting companies drops sharply this week, but the names that remain carry genuine market-moving potential. Below is the full calendar for the week, with the six highest-conviction reports highlighted.

1. Cisco Systems (CSCO) — Wednesday May 13, after close

Cisco is the lone Dow component reporting this week and carries unusual signal value. The company logged $2.1 billion in AI orders in Q2 alone and raised its full-year AI order target to more than $5 billion — with ~$3 billion expected to convert to revenue from hyperscalers this fiscal year. The flagship Silicon One G300 chip (102.4 Tbps switching bandwidth) has become the go-to infrastructure piece for hyperscaler buildouts.

What to watch: Gross margin trajectory. UBS analyst David Vogt has flagged that higher component costs could cap margins even as revenue beats. The legacy networking segment has declined for five consecutive quarters — the question is whether AI order momentum is large enough to bend that curve. Management’s July guidance update will be closely parsed.

2. Alibaba (BABA) — Wednesday May 13, before open

Alibaba reports its fiscal Q4 2026 results against a backdrop of genuine cloud momentum. Cloud and AI revenue has been growing at ~18% YoY, with AI-related product revenue in triple-digit growth territory. The company holds ~$50.5 billion in net cash and returned $16.5 billion to shareholders over the past year.

What to watch: Margin recovery in international commerce and Taobao & Tmall monetisation trajectory. If discretionary spending in China softened in Q1, it will show up here. Tariff exposure commentary will also move the ADR.

3. Applied Materials (AMAT) — Thursday May 14, after close

The semiconductor equipment bellwether. AMAT’s own fiscal Q2 guidance ($7.15–8.15B revenue) already sat above Wall Street’s $7.0B consensus. Morgan Stanley raised its price target to $454, expecting higher July guidance and gross margin expansion — and forecasts AMAT will raise its CY2026 Semi Systems growth guidance from 20% to 25%+. Seaport Research initiated at Buy with a $500 target, calling it “the best positioned of the global WFE suppliers.”

What to watch: AI chip equipment order flow and export control commentary. Any tightening in restrictions on China would hit AMAT’s addressable market more than most in the sector.

4. Constellation Energy (CEG) — Monday May 11, before open

The largest US nuclear operator has become a proxy for the AI data-centre power trade. Long-term power purchase agreements with hyperscalers have transformed its earnings visibility.

What to watch: Updates on new data-centre power contracts and the status of the Crane Clean Energy Center restart.

5. AstraZeneca (AZN) — Tuesday May 12, before open

AstraZeneca reports against strong oncology pipeline momentum. Its ADC (antibody-drug conjugate) franchise has driven consistent double-digit revenue growth.

What to watch: Pipeline updates on TROP2 and HER2 ADC candidates, and any commentary on US drug pricing reform risk.

6. Archer Aviation (ACHR) — Monday May 11, after close

Archer reports Q1 2026 results as the clock ticks louder. Wall Street expects a loss of $0.25 per share on just $1.66 million in revenue — a rounding error against a $4.4 billion market cap. The bull case rests on a $6 billion order backlog, a $2 billion cash position, and 100% FAA acceptance of its Means of Compliance document set. The harder story, which the mainstream narrative is underplaying, is a ~$500 million annual cash burn and a share count that has grown 171% since the SPAC listing in 2021.

What to watch: Cash at quarter-end and burn rate against the $160–180M adjusted EBITDA loss guided for Q1. Any specific TIA (Type Inspection Authorization) timing — the FAA gate that must open before paying passengers can board. Whether the UAE commercial launch is still on for 2026 or quietly sliding into 2027. And any signal on further share issuances. We covered Archer in detail ahead of this print — full breakdown here.

“Applied Materials is the one report institutional investors will focus on most — semi equipment capex is the earliest indicator of where the AI infrastructure cycle is heading next.”

— Rubbish Talk analysis, May 2026

Sources