Key insights
- Wolfe Research highlights semiconductors as the leading driver of S&P 500 earnings growth, projecting they will contribute 39% of total year-over-year growth, with Micron and NVIDIA as key contributors. Despite market concerns over geopolitical issues and energy prices, S&P 500 earnings have been solid, with technology, particularly semiconductors, playing a crucial role. This suggests continued strength in the semiconductor sector could positively influence the broader market.
Investing.com -- Semiconductors have emerged as the single most important driver of S&P 500 earnings growth, according to Wolfe Research, even as broader market sentiment has been weighed down by concerns over the prolonged Middle East conflict and elevated energy prices.
“Although doom and gloom has been pervasive throughout markets (outside of episodic rips such as yesterday’s on headlines) as investors become increasingly concerned about a prolonged conflict with persistently higher energy prices, S&P 500 earnings have quietly been very solid with 2026E Operating EPS revisions up ~3% year-to-date,” wrote analyst Chris Senyek.
Technology companies are said to have been the primary engine behind that resilience. Wolfe Research projects the sector will account for more than half of the index's year-over-year earnings growth in 2026.
Within tech, semiconductors stand out. Senyek estimates the group will contribute approximately 39% of the S&P 500's total year-over-year earnings growth, with Micron and NVIDIA cited as the main drivers.
Micron reported on March 18, with second-quarter earnings of $12.20 per share, $3.41 better than the analyst estimate of $8.79. Nvidia's next earnings release will be in May. In late February, the semiconductor giant posted Q4 earnings per share of $1.62, $0.10 better than the analyst estimate of $1.52.
"We believe Semis have cemented themselves as the most important group for the S&P 500 as they're driving outsized contributions to earnings growth and revisions year-to-date," Senyek wrote.