Analysts have raised full-year S&P 500 earnings growth forecasts to roughly 25%, up sharply from the start of the year, as capital spending on artificial intelligence propels a broadening market advance.

Wall Street’s optimism has hardened midway through 2026. Strategists at major brokerages now project S&P 500 earnings growth of about 25% for the full calendar year, a marked increase from forecasts of less than 16% in January, according to firm outlooks circulated to clients.

The upgrade reflects more than momentum. Heavy investment in AI infrastructure by hyperscalers and chipmakers has lifted profits across technology and adjacent industries, while resilient consumer spending and stable corporate margins have kept the expansion intact.

The strength has reshaped the investment case. Advisers at firms including Charles Schwab note that long-term investors have been adding equity exposure on pullbacks, betting that productivity gains from AI will support earnings well beyond a single cycle.

Not all of the market is participating equally. Gains remain concentrated in a handful of mega-cap names, prompting caution that valuations have run ahead of fundamentals in places. Some strategists warn that a misstep in AI capital spending could ripple widely.

The mid-year read is one of promise and pressure. A soft landing still looks achievable, but the rally’s dependence on a narrow engine means the second half will hinge on whether broader earnings can confirm the optimism that analysts have now baked in.

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