US equities were a hair’s breadth from setting new records early this week.

If you’re looking to explain that, you might channel James Carville: “It’s the fundamentals, stupid.”

Headed into reporting season, consensus expected to hear that corporate America enjoyed another quarter of blockbuster earnings growth in Q2. With more than 60% of S&P 500 companies on the books, management hasn’t disappointed.

As Goldman’s Ben Snider noted in his latest, nearly two thirds of companies that’ve reported so far beat on the bottom line by at least one standard deviation. That, he remarked, is “one of the highest levels on record.”

The overall, aggregate YoY EPS growth figure for the index including write-ups tied to Alphabet and Amazon’s Anthropic stakes is a ridiculous 45%, as illustrated below.

Excluding mega-cap tech’s “other” income — which, I should note, comprised some 60% of mega-cap tech GAAP net income for Q2 — EPS growth’s still a very impressive 26%. That’s a helluva encore from Q1’s already robust pace and it’s better than the 22% company analysts collectively expected.

Note that the median company — i.e., controlling for the mega-caps — grew the bottom line by 12% in Q2, down slightly from Q1’s pace, but very healthy all the same and 3ppt better than forecast.

As was the case in Q1, these results look pretty extraordinary considering we’re not lapping recession comps. And as Snider wrote in the same note, 2027 estimates have been revised higher in light of ongoing corporate outperformance.

The figure on the left, below, shows consensus estimates for 2027 EPS have been bumped up for virtually every sector and revision breadth remains positive for the index.

That said, and as illustrated by the chart on the right, upside for margins is coming almost entirely from the mega-caps.

“Input cost pressures remain a risk to corporate profitability,” Snider cautioned. “Net profit margins for the median S&P 500 stock have remained relatively unchanged during the past several quarters as companies managed headwinds from tariffs and energy prices while the profitability of the largest tech stocks has continued to lift margins for the aggregate S&P 500.”

Needless to say, mega-tech, the hyper-scalers, semis and AI adjacents are doing a lot of the heavy lifting.

The figure above gives you some context for those names’ contribution to overall, aggregate EPS growth by quarter. Q3 and Q4 are obviously estimates, and Nvidia and Broadcom are yet to report.

AI infrastructure stocks by themselves “are expected to account for nearly a third of S&P 500 earnings growth in Q2,” Snider went on, adding that the same stocks will likely contribute “more than half of S&P 500 earnings growth for the remainder of 2026 and in 2027.”

That’s mirrored at the macro level, where AI-related investments are to thank for a meaningful share of overall US economic growth.