Will tech stocks continue to dominate earnings in 2026?

Yes, tech stocks are expected to continue outperforming in earnings, but growth outside the tech sector is also projected to increase significantly.

How are investors approaching AI investments in 2026?

Investors are actively trying to separate genuine AI innovators with clear profitability from those considered 'imposters' or lacking a viable business model.

What does Bank of America predict for S&P 500 earnings?

Bank of America projects collective S&P 500 profits to rise around 7% from 2024 levels, with potential for 11% growth.

Home / Business and Economy / Tech's Reign Continues, But Broader Gains Ahead?

Tech's Reign Continues, But Broader Gains Ahead?

13 Jan

•

Summary

Big tech is expected to drive most earnings growth this season.
Broader company participation anticipated for market gains in 2026.
Investors are separating genuine AI successes from 'imposters'.

Tech's Reign Continues, But Broader Gains Ahead?

Major technology companies are expected to continue their dominance in earnings growth for the current reporting season. Analysts anticipate a collective S&P 500 profit increase of around 7% from 2024 levels, potentially reaching 11% with upward forecast revisions. Corporate guidance remains highly positive, the most robust seen since 2021, with major banks like JPMorgan Chase set to release their updates imminently.

Looking beyond the immediate earnings season, a significant market evolution is anticipated for 2026. While tech earnings are still projected to outperform, there is growing optimism for cyclical sectors, fueled by factors like tax refunds and potential stimulus discussions. This indicates a potential broadening of market gains, moving beyond the concentrated performance seen from the "Magnificent Seven" cohort.

This evolving landscape prompts investors to carefully differentiate between AI companies with clear paths to profitability and those at higher risk of failure, akin to historical market bubbles. While tech is expected to remain a primary driver, the market is bracing for a shakeout of weaker players and "AI impostors," suggesting a more diversified and potentially healthier market in the coming years.