U.S. companies expect third-quarter net profit to rise 30%, but artificial intelligence giants NVIDIA and Micron Technology alone drive over a third of that growth, according to analyses from FactSet and Dow Jones Market Data.
NVIDIA and Micron Lead Third-Quarter S&P 500 Earnings Growth
Two semiconductor heavyweights are carrying an unprecedented share of the stock market’s profit expansion. In reports published ahead of the peak reporting season, The Kobeissi Letter and FactSet identified NVIDIA and Micron Technology as the top two contributors to year-over-year earnings growth for the S&P 500 in the third quarter of 2026.
FactSet’s blended growth rate for the S&P 500 sits at 29%. Strip away NVIDIA and Micron, and that growth rate drops to 20%, meaning just two companies account for roughly 9 percentage points of the index’s total advance. Other top contributors, such as Meta Platforms, EchoStar, and Boeing, owe parts of their year-over-year gains to easy comparisons against weaker earnings in the previous year that included heavy non-cash charges and impairment expenses.
Micron Posts Record Margins on Memory Shortages
The memory manufacturer posted adjusted earnings per share of $33.42, a surge of more than 1,000% from the $3.03 reported in the same period a year earlier. Quarterly revenue climbed 379% to $54.2 billion, beating consensus expectations of $50.97 billion.
AI data centers require vast quantities of high-bandwidth memory, and global supply remains severely constrained. Micron’s GAAP operating margin hit 80.7% in the final quarter of fiscal 2026, up from 32.3% a year prior.
NVIDIA Revenue and Earnings Expectations Double from Last Year
NVIDIA faces a similar wave of demand, though its reported figures for the quarter ending in October remain ahead on the calendar. Analysts expect the company to post revenue of $108.98 billion and earnings per share of $2.47, roughly doubling its performance from a year earlier when it reported $57.0 billion in revenue and $1.30 per share.
Supply commitments—the funds the company has promised to disburse to secure future production capacity—reached $279.0 billion in the second quarter of fiscal 2027, up from previous periods in fiscal 2026. Much of that spending targets memory production for Vera Rubin components.
Rising component costs introduce friction. NVIDIA expects gross margins to bottom at 71% to 72% in the fourth quarter because memory prices have risen faster than anticipated.
Even though our demand is much greater than 70%, our supply allows us to confidently deliver 70%.
Jensen Huang, NVIDIA
Wall Street Concentrates in Chipmakers While Strategists Debate Infrastructure Spending
Reliance on two chipmakers marks a concentration across Wall Street. According to data tracked by The Kobeissi Letter, the fifteen largest stocks in the S&P 500 now command 46.7% of the index’s market value, eclipsing the 27.2% concentration recorded at the height of the dot-com bubble in 2000.
Commodity companies like ExxonMobil and Chevron have also seen profits rise due to higher oil prices during geopolitical conflict.
Some analysts voice caution over whether the vast sums poured into data centers will yield proportional returns. Ed Yardeni, founder of Yardeni Research, captured that sentiment in a note cited by The Wall Street Journal:.
There is a concern that all these data centers may eventually have to be converted into pickleball courts.
Ed Yardeni, founder of Yardeni Research
Chris Grisanti, chief market strategist at MAI Capital Management, argued that the index’s health remains sound because earnings outside the top tier continue to expand. The top players are leading the team, but the rest are doing their part,
Grisanti said, noting that S&P 500 companies outside the top 10 are projected to grow earnings by 10% year over year.
Will data center returns justify the capital expenditures, or will the concentration of earnings in two chipmakers leave the broader index vulnerable if demand slows?