The Q2 2026 earnings season has ended with the biggest beat ever recorded for the S&P 500. According to the final update from [FactSet](insight.factset.com), companies in the index beat analyst estimates by an aggregate 29.2%, versus a five-year average of 7.0% — the highest level since FactSet began tracking the metric in 2008. The previous record was 23.2%, set in Q2 2020.
A blowout quarter, with 86% of companies beating
86% of S&P 500 companies beat EPS estimates, the highest share since Q2 2021 (87%) and above the five-year average of 78%. The blended earnings growth rate — combining actual results with estimates for companies yet to report — reached 50.4%, the fastest pace since Q2 2021 (91.6%), when the index was boosted by the post-pandemic reopening. Revenues surprised too: 3.2% above estimates, the biggest revenue surprise since Q2 2022, with blended revenue growth of 15.0%.
Net margin at 16.9%, an all-time record
The index's blended net margin rose to 16.9%, a new record since FactSet began tracking the metric in 2009. According to [FactSet's margin analysis](insight.factset.com), already in late July the level was the highest ever reported, surpassing the previous record of 14.8% set in Q1 2026. Ten of the index's eleven sectors posted growth, eight of them double-digit; health care was the only decliner.
Alphabet and Amazon explain most of the surge
The aggregate figure, however, needs context: most of the beat comes from unrealized gains booked by two giants. In its Q2 10-Q, [Alphabet](sec.gov) reported $98.0 billion in net other income, almost entirely driven by $99.0 billion of gains on equity securities — largely unrealized — mainly related to its stakes in SpaceX and a private company (Anthropic). Net income jumped to $112.2 billion, with EPS of $9.11 versus estimates of $2.88.
In [Amazon's 10-Q](sec.gov), net other income came in at $53.4 billion, almost entirely attributable to the Anthropic stake: upward adjustments for observable price changes on nonvoting preferred stock and the reclassification of gains on convertible notes. EPS was $5.75 versus estimates of $1.82. According to [FactSet](insight.factset.com), Amazon alone accounted for 76% of the net dollar-level increase in index earnings during its reporting week; [24/7 Wall St.](247wallst.com) notes that Alphabet's 93.6% margin, inflated by unrealized gains, single-handedly moves the index's blended margin from 14.4% to record territory.
Strip out the two giants and the beat is still above every average
The key point: the season remains solid even without these effects. Excluding Alphabet and Amazon, the earnings surprise would fall from 29.2% to 10.9% — still above every historical average — while earnings growth would drop from 50.4% to 32.0%, still the second straight quarter above 25% and the seventh consecutive quarter of double-digit growth. [Deutsche Bank](finance.yahoo.com) agrees: after the season it raised its 2026 S&P 500 EPS forecast to $358 from $342, pointing to a record 87% share of companies beating and margins at all-time highs.
The market is pricing in that strength: the index's forward 12-month P/E stands at 20.0x, roughly in line with its five-year average (19.9). For Q3 and Q4 2026, analysts expect earnings growth of 27.4% and 25.2% respectively, with 30.0% growth expected for 2026 as a whole.
Sources
- [FactSet — S&P 500 Earnings Season Update: August 7, 2026](insight.factset.com)
- [FactSet — S&P 500 Reporting Highest Net Profit Margin in More Than 15 Years](insight.factset.com)
- [FactSet — Amazon Drives S&P 500 Earnings Growth for Q2 Above 45% On Valuation Gains](insight.factset.com)
- [Alphabet Inc. — Form 10-Q, Q2 2026 (SEC EDGAR)](sec.gov)
- [Amazon.com Inc. — Form 10-Q, Q2 2026 (SEC EDGAR)](sec.gov)
- [24/7 Wall St. — The S&P 500 Is On Track to Post Record Q2 Profits — But There's a Catch](247wallst.com)
- [Yahoo Finance — Deutsche Bank raises S&P 500 earnings estimates on the back of the solid Q2 beats](finance.yahoo.com)
