Markets are gearing up for the busiest week of second-quarter earnings season
Alphabet reported second-quarter profit figures that included sizable paper gains from investment stakes.
The busiest week of corporate earnings is coming up, with 177 S&P 500 companies set to report in the days ahead.
But so far, one company has arguably stolen the show. A huge chunk of the S&P 500's SPX profit growth so far has come down to Google parent company Alphabet $(GOOG)$ $(GOOGL)$, which saw earnings per share jump 300% in the second quarter relative to a year earlier as it turned in $112 billion in net income.
It's worth looking below the hood at Alphabet's performance, as the company disclosed that second-quarter results benefited from $98 billion in "other income" - a measure that Alphabet said came largely from unrealized investment gains related to SpaceX $(SPCX)$ and "a private company." Alphabet has a stake in Anthropic, but didn't name the other contributor in its filing.
Regardless of what drove the company's profit expansion, Alphabet has cemented itself as a major driver of S&P 500 earnings growth, according to a FactSet report released on Friday. Alphabet on its own made up 92% of the net dollar increase in earnings for the entire S&P 500 index during the past week.
If Alphabet were excluded from second-quarter earnings figures overall, the S&P 500's blended earnings growth rate - which combines actual results and expected results - would fall to 25.9%, from 37.9%, according to the report. But even without the Alphabet contribution, that would amount to strong earnings growth for the index, and the second straight quarter with a growth rate above 20%.
Alphabet's outsize profit gain has also helped put S&P 500 net profit margins on pace for new highs. Though businesses are navigating swings in oil prices (CL00) (BRN00) due to the Iran war, FactSet data show that blended margins stand at 15.7% for the second quarter, when accounting for actual results and estimates for companies yet to report. If that number holds, it would be the index's highest net profit margin since FactSet started tracking the metric in 2009.
Alphabet's results landed as Wall Street increasingly worries about the costs of the artificial-intelligence buildout. The Google parent, Amazon.com (AMZN), Meta Platforms (META) and Microsoft $(MSFT)$ could together outlay upward of $700 billion toward capital expenses this year, with data centers driving a lot of those costs.
Richard Windsor, an independent analyst at Radio Free Mobile, said Alphabet's earnings-per-share figure hinged largely on the "illusory security of a series of unrealized investment returns that will evaporate at the first hint of trouble." And as Alphabet spends billions on AI, it just reported its first quarter ever with negative free cash flow.
Big Tech and the AI race have done much of the heavy lifting for the stock market over the past few years. Earnings for the week ahead will keep the focus squarely on that industry, as Microsoft, Meta, Amazon and Apple $(AAPL)$ all report.
Like Alphabet, Amazon has a stake in Anthropic, so its profit numbers will be worth watching.
The week will also offer more detail about how the Iran war, rising costs and the widening cyclospora outbreak are affecting what people buy in grocery stores and restaurants.
Coffee chain Starbucks $(SBUX)$ will report results as it tries to further execute its turnaround. Mexican fast-casual chain Chipotle Mexican Grill $(CMG)$ also is due to report, and management may look to calm investor nerves about the impact of the cyclospora outbreak.
Elsewhere, Coca-Cola $(KO)$, Oreo maker Mondelez International $(MDLZ)$, Unilever $(UL)$ and Hershey $(HSY)$ are also on this week's earnings docket. Those companies will report results after grocery-chain Albertsons $(ACI)$ last week warned of deeper struggles among its low-income shoppers.
United Parcel Service (UPS), Visa (V), Mastercard $(MA)$ and Boeing $(BA)$ will also deliver their quarterly financials.
-Bill Peters
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July 26, 2026 10:00 ET (14:00 GMT)
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