Nvidia and Big Tech Drive Tech Sector to Lead Earnings Season

The US technology sector enters the earnings season as the chief beneficiary of the AI boom. While Big Tech spends record amounts on data centers and computing infrastructure, chip manufacturers are turning these investments into accelerated revenue and profit growth.

Why Technology is Leading

According to Bloomberg Intelligence, US technology sector profits in the first quarter of 2026 could have grown 41% year-over-year. This is the best result among all S&P 500 sectors and nearly double that of the next closest competitor—the materials sector. Against the backdrop of generally strong earnings, this is particularly notable: FactSet on April 24 estimated aggregate profit growth for index companies at 15.1%, with 84% of companies that have already reported beating earnings per share forecasts.

The main reason for this gap is the scale of spending by the largest platforms on artificial intelligence. In February, Bloomberg reported that Alphabet, Amazon, Meta, and Microsoft collectively plan to direct approximately $650 billion in capital expenditures in 2026. This money goes into new data centers, servers, networks, memory, and accelerators. For infrastructure providers, this is not an abstract bet on the future, but a stream of orders that is already reflected in quarterly results.

Who's Making More Money

The greatest benefit right now is not distributed equally among all technology companies. While platforms continue to explain to investors when their massive AI spending will pay off, hardware suppliers are already skimming the cream from current demand. This concerns not only GPUs but also memory, networking equipment, server components, and the entire ecosystem on which new cloud infrastructure is built. This is where the market sees the most direct and fastest monetization of AI demand.

• Nvidia, according to FactSet, remains the largest contributor to profit growth not only among the "Magnificent Seven" but across the entire S&P 500.
• After Nvidia, analysts highlight Micron, Broadcom, and SanDisk among notable growth drivers.
• Morningstar includes Arista, Amphenol, and Marvell among clear beneficiaries of the AI infrastructure buildup.
• Additional momentum comes from high DRAM and NAND memory prices, as well as supply shortages in certain segments.

This is an important detail: the entire effect cannot be reduced solely to the Big Tech label. FactSet estimates profit growth for the "Magnificent Seven" in the first quarter at 22.8%, but without Nvidia, this figure drops to 6.4%. By comparison, the remaining 493 index companies collectively show 10.1%. In other words, the market is increasingly separating the platforms that finance AI expansion from suppliers that profit from it directly now.

What the Market is Watching

The next test of this logic is the earnings reports in the coming weeks. According to Morningstar's schedule, Microsoft and Amazon are scheduled to report on April 29 after market close, AMD on May 5, and Nvidia on May 20. Investors are interested not only in the quarterly figures themselves but also in management commentary: will previous capital expenditure rates be maintained, how quickly are new capacities being deployed, and is demand for AI computing really remaining near maximum capacity.

That said, the market is watching the sector with some nervousness. In the first quarter, Morningstar's technology index fell 9%, while the semiconductor index lost only 4.8%.

As early as April, the situation began to shift: by April 22, the semiconductor index gained 25.2% for the month. This shows that investors are willing to pay again for companies tied to AI infrastructure if earnings confirm demand, not just promises.

What This Means

At this stage of the AI cycle, the main winner is not necessarily the one who loudly sells ready-made AI services. The companies that monetize fastest are those that supply computing, memory, networking equipment, and data center components. If upcoming reports confirm sustained demand and Big Tech's willingness to continue capital investments, it will be chipmakers and infrastructure suppliers that remain at the center of technology growth in 2026.