S&P 500 Earnings Are Growing 24%-32%

TL;DR: Analysts now expect S&P 500 EPS to grow 24%-32% this year, according to The Motley Fool, a pace the report says has appeared only twice before in the modern era. I would treat that as a profit-quality test rather than a crash signal. Watch who earns, how durable it is, and what valuation assumes next.

The S&P 500 is not just rising. Its earnings base is expanding faster than normal at a point when a narrow set of AI-linked companies carries a large share of the index. The same report says the index was up 12.6% year to date, while the Magnificent Seven made up about a third of the S&P 500.

For accredited investors, this matters because public-market profits set the mood for private-market pricing. If public AI margins hold, late-stage venture, growth equity, data-center infrastructure, and private credit tied to the AI buildout get another round of support. If the earnings are pulled forward, the private side usually reprices later and less politely.

What actually happened in S&P 500 earnings?

S&P 500 earnings growth has moved from strong to historically unusual. Goldman Sachs says S&P 500 EPS grew 51% year over year in the second quarter and 26% over the past four quarters, compared with a 7% average annual gain over the past 30 years.

That lines up with the Motley Fool's point. The current earnings pace is rare when the market is not simply bouncing off recession-depressed numbers. LongYield puts the second-quarter figure at 52.0% year over year on a blended basis and says it was the strongest S&P 500 earnings growth in five years.

Those numbers are close, not identical. I would not over-read the one-point difference between 51% and 52%. Different earnings datasets use different blends of reported results and remaining estimates. The direction is the part that matters.

Why does the AI boom change the earnings read?

AI changes the earnings read because the profit growth is concentrated in the companies funding, selling, or benefiting from the AI infrastructure cycle. Goldman Sachs says the AI investment boom is driving nearly half of S&P 500 EPS growth this year, but its contribution should fade.

That is the piece I would watch. A one-year earnings surge can justify a higher index. A capex cycle that turns into depreciation, margin pressure, or weaker incremental returns can change the math fast.

Goldman Sachs forecasts S&P 500 EPS of $415 in 2027 and $460 in 2028, with the index rising to 8,700 over 12 months from 7,764 on September 21. That is a profit-growth argument, not a multiple-expansion argument.

What does history say happens next?

History says the next move depends on whether earnings growth is durable or already priced in. The Motley Fool points to 1994 as one precedent, when S&P 500 EPS jumped 39.8% while the index fell slightly under Alan Greenspan's rate hikes.

That is the warning. Strong earnings do not automatically create strong returns if rates, valuation, or concentration work against the market.

The dot-com comparison is also in the background because valuation and trend measures are stretched. Rallies cites Ned Davis Research saying the S&P 500 is 85% above its long-term trendline and earnings are 66% above theirs, with the current streak of both being at least 30% above trend the longest since the late 1920s.

That does not tell you the market must crash. It tells you the easy-money assumption deserves a hard audit.

What should accredited investors watch next?

Watch earnings quality, not just index level. A private-market investor should ask whether AI demand is producing recurring cash flow, temporary accounting gains, or capex that will have to be depreciated through future income statements.

Signal to watch	What the source says	Investor read
S&P 500 EPS growth	The Motley Fool says analysts expect 24%-32% EPS growth this year	Fast earnings growth can support prices, but it raises the hurdle for future surprises
AI contribution	Goldman Sachs says AI investment is driving nearly half of S&P 500 EPS growth this year	Concentration risk matters if the AI capex cycle slows
Trend stretch	Rallies cites prices 85% above trend and earnings 66% above trend	Future returns may be lower if expectations are already high
Private-market spillover	Public growth equity pricing tends to influence venture marks and late-stage rounds	Revisit exposure to down rounds in private markets before marks catch up

If you own interval funds, private credit funds, venture secondaries, or growth equity vehicles, do the same exercise away from the ticker screen. Read the fee stack before the pitch, especially in semi-liquid private-market wrappers like interval funds. If a manager is using public AI multiples to justify a private valuation, ask how that mark survives a slower EPS path.

Common mistakes investors make with earnings booms

The first mistake is treating earnings growth as a timing signal. It is not. Earnings growth tells you what companies are producing. It does not tell you what investors have already paid for those earnings.

The second mistake is assuming the index is diversified just because it owns 500 companies. When one theme drives a large share of profit growth, portfolio diversification can be weaker than the nameplate suggests.

The third mistake is moving private allocations after public prices have already moved. If the AI cycle reprices public equities first, private marks may adjust later. That lag can hide risk in venture funds, growth funds, and private equity fund lifecycles.

FAQ

Is the S&P 500 going to crash in 2026?

No source in this research pack proves a 2026 crash. The sourced case is narrower. Earnings are unusually strong, AI concentration is high, and trend measures are stretched. That combination argues for stress-testing assumptions, not making a calendar-based crash call.

What percentage of Americans have over $100,000 in the stock market?

This research pack does not include a sourced figure for that question. I would not quote a percentage without a primary dataset or a clearly named survey. For this piece, the relevant issue is not household ownership. It is how much current index earnings depend on AI-linked profit growth.

What did Warren Buffett say about the S&P 500?

The research pack for this article does not include a current Buffett quote about the S&P 500. I would not attach his name to this earnings setup without a direct source. The practical question is still the same: whether current earnings justify current valuation.

How likely is the S&P 500 to crash?

The supplied sources do not quantify crash probability. Rallies cites Ned Davis Research saying returns have historically been lower when the index is far above trend, but lower returns and a crash are different claims.

Run one portfolio check today. List every public and private holding whose valuation depends on AI earnings growth staying high, then write down what happens if growth decelerates rather than collapses.

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