Corporate America Is Crushing All Estimates – But Magnificent Seven Still Run The Show

The second-quarter 2025 earnings season delivered one of the biggest beats in over a decade — excluding the COVID rebound — with corporate America surprising investors across the board.

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But as strong as the results were, much of the growth is still concentrated in a handful of mega-cap stocks.

According to a Goldman Sachs report shared Monday, 92% of S&P 500 companies have reported results, with 60% beating EPS estimates by over one standard deviation — the highest rate since 2009.

Aggregate S&P 500 EPS jumped 11% year over year, well ahead of the 4% analysts were expecting before the season began.

“The quarter has been marked by one of the greatest frequency of earnings beats on record,” said Goldman’s analyst David J. Kostin.

Corporate America Delivered Despite Tariff Concerns

“Tariffs and some upward pressure on prices did not stop corporate America from delivering solid second quarter numbers,” said Jeff Buchbinder, chief equity strategist, LPL Financial.

Much of that surprise, however, came from a low base — analysts had aggressively slashed estimates earlier this year following the market's spring correction.

S&P 500 earnings per share are on pace to grow more than twice the sub-5% rate analysts had projected at the end of June.

Magnificent Seven Continue To Dominate: Earnings Grew 3x Faster Than The Rest

Earnings strength remains highly concentrated at the top.

The Magnificent Seven — Alphabet Inc. GOOGL, Amazon.com Inc. AMZN, Apple Inc. AAPL, Meta Platforms Inc. META, Microsoft Corp. MSFT, Tesla Inc. TSLA and Nvidia Corp. NVDA – which is yet to report, grew second-quarter earnings per share by 26% year-over-year.

That compares with just 7% for the rest of the index. The 19-point spread exceeded even the 14-point gap forecast at the start of earnings season.

Kostin said 2026 EPS forecasts for the Magnificent Seven have been revised 1% higher year-to-date, while estimates for the remaining 493 stocks have been cut by 4%.

While many expected this divergence to narrow into 2026, revisions have pushed convergence further out.

Year to date, analysts have raised 2026 EPS forecasts for the Magnificent Seven by 1%, but have trimmed forecasts for the rest of the index by 4%, widening the gulf even more.

The dominance of the Magnificent Seven is expected to persist through year-end, though the gap may begin to narrow in 2026 as the other 493 S&P companies start to catch up.

For now, the earnings divergence remains wide — a key reason why LPL Research continues to favor large-cap growth stocks over their value-oriented peers.

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