Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) and Amazon.com, Inc. (NASDAQ:AMZN) are responsible for a large share of the S&P 500’s second-quarter earnings growth, a concentration highlighted by investor Ross Gerber using FactSet (NYSE:FDS) data.
Alphabet, Amazon Drive 71% of Earnings Increase
Gerber highlighted FactSet data cited by the Wall Street Journal showing that Alphabet and Amazon account for about 71% of the dollar increase in S&P 500 blended earnings since July.
The concentration underscores how heavily the market’s overall earnings growth is being driven by a small number of mega-cap companies, particularly those benefiting from the artificial intelligence boom.
According to FactSet, S&P 500 companies have posted 50.4% blended earnings growth for the second quarter, the strongest pace since the stimulus-fueled recovery in 2021.
However, excluding Alphabet and Amazon would significantly change that picture.
“Excluding Alphabet and Amazon.com, the blended earnings growth rate for the S&P 500 for Q2 2026 would fall to 32.0% from 50.4%,” FactSet insight stated.
Amazon has benefited from accelerating demand for its cloud-computing business, particularly as companies increase spending on AI infrastructure. Alphabet has similarly gained from rising demand for cloud services and AI-related technology.
Although earnings growth remains strong, the disparity highlights the market’s vulnerability to shifts in investor sentiment around the AI trade.
A selloff in chip stocks, for instance, pressured the S&P 500 and Nasdaq Composite ahead of the latest earnings season, even as the Dow Jones Industrial Average advanced, the WSJ report noted.
Alphabet, Amazon Q2 Revenue Surges Fueled by AI and Cloud Growth
Alphabet reported $119.80 billion in second-quarter revenue, beating estimates of $116.82 billion.
Revenue rose 24% year over year, while Google Cloud growth accelerated 82%, driven by demand for AI infrastructure and solutions, CEO Sundar Pichai said.
Alphabet Class A shares closed at $354.30, down 3.04% over the past five days, while Class C shares declined 3.16% to $353.47 over the same period, according to Benzinga Pro.
Amazon posted $200.61 billion in the second-quarter revenue, topping the $196.46 billion consensus estimate.
AWS revenue jumped 36.7% year over year, its fastest growth in 18 quarters, while its AI and chip businesses each surpassed a $25 billion annualized revenue run rate, CEO Andy Jassy said.
Amazon shares closed at $274.48, down 1.34% over the past five days.
Alphabet, Amazon and Microsoft Corp (NASDAQ:MSFT) collectively reported more than $150 billion in investment gains during the latest earnings season, with much of the increase linked to their private artificial intelligence holdings.
Benzinga Edge ranks Amazon in the 90th percentile for Growth, with the stock showing a positive price trend across the short, medium and long term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: PJ McDonnell / Shutterstock – ek
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