HSBC Sees Strongest US Q2 Earnings Growth Since Post-Pandemic Era — Energy, Tech And Materials Sectors To Shine

An analysis by HSBC Global Investment Research reveals that U.S. corporate earnings expectations are climbing at their fastest pace since the post-pandemic recovery era.

• Projections for corporate earnings per share (EPS) are experiencing a pre-earnings upward revision, marking the strongest growth trajectory seen since the immediate post-pandemic boom, HSBC says. 
• Majority of this record-breaking EPS momentum is isolated within a select group of mega-cap companies. 
• Growth will primarily come from key sectors—including energy, technology and industrials. 

Corporate America is entering its second-quarter earnings season on a historically strong footing. Expectations for corporate earnings growth are expected to surge the most in the post-pandemic era, according to a recent report by HSBC Global Investment Research.

Market analysts have historically revised their corporate earnings per share (EPS) projections ahead of the official quarterly reporting cycle. Typically, consensus estimates moderate in the weeks leading up to earnings rollouts, but high fundamental demand and an increase in overall investor revenue expectations, specifically in AI-focused tech stocks have skewed analyst expectations.

A report by HSBC, published by Seeking Alpha, highlighted that while these projections are historically lofty, the investment firm remains unconcerned. Nicole Inui, head of equity strategy for the Americas at HSBC Global Investment Research, said optimism is anchored by the fact that the explosive expansion is not a fragile, generalized bubble but is instead highly concentrated within fundamentally strong sectors and dominant market players.

HSBC expects energy (XLE), (VDE), (XOP) and information technology (VGT), (XLK), (SOXX) to lead earnings growth with double and triple-digit gains. 

 Mega-Cap Technology Anchors Momentum

The technology sector will remain the premier driver of the market's record earnings expansion, taking support from strong cloud computing growth and massive capital commitments toward artificial intelligence infrastructure.

Microsoft Corp. (MSFT) reported a booming Q1 2026 revenue of $77.7 billion, representing an 18% increase year-over-year. The tech giant's diluted GAAP earnings per share landed at $3.72, heavily supported by a 40% revenue surge in its Azure and cloud services business 

Whereas, Alphabet Inc. (GOOGL) announced a consolidated Q1 2026 revenue of $109.9 billion, marking a 22% increase year-over-year, with similar performance seen by Magnificent Seven companies, chipmakers and memory drive makers. 

SPY, QQQ, DIA: Retail View 

Retail sentiment on Stocktwits for SPY, QQQ and DIA was between ‘extremely bullish’ and ‘neutral’ zones with ‘normal’ to ‘high’ message volumes.

SPY, QQQ, DIA ETFs have gained 9.7%, 17% and 8% year-to-date. 

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