Societe Generale believes the strength of the U.S. earnings season is extending well beyond the technology sector, reinforcing its bullish outlook for equities. In a note to clients this week, the bank reiterated its expectation that the S&P 500 will climb to 8,000 and encouraged investors to “buy the momentum dip.”
Earnings Season Continues to Exceed Expectations
Chief U.S. Equity Strategist Manish Kabra described the current reporting period as “another stellar earnings season,” noting that around 60% of S&P 500 companies have already reported, while only 9% have missed expectations, “the lowest reading ever.”
According to SocGen, 86% of companies have delivered earnings beats, while profit margins have improved across 10 of the index’s 11 sectors. Both overall S&P 500 margins and margins excluding technology have reached record highs.
Positive Revisions Continue to Build
The bank noted that companies beating expectations are still outperforming the broader market despite a noticeable slowdown in momentum during the middle of earnings season. Stocks that disappointed, meanwhile, have continued to underperform.
Analyst revisions also remain favourable, with roughly 15 earnings upgrades for every 10 downgrades. Technology, financials and industrials are leading the improvement, while SocGen has increased its 2026 earnings-per-share forecast by 2% to $335 since reporting season began.
AI Investment Continues to Support Growth
SocGen believes the artificial intelligence investment cycle continues to strengthen.
The bank said the “hard data” is accelerating, pointing to faster cloud revenue growth among the three largest hyperscale providers, a $300 billion increase in order backlogs and an additional $150 billion in planned capital expenditure.
Industrials were highlighted as another bright spot, benefiting from record profit margins and improving analyst upgrades. Large-cap industrial companies are expected to deliver 15% earnings growth, while small-cap industrial earnings are projected to expand by around 30%.
Broader Market Leadership Supports Bullish View
Kabra said earnings growth is becoming increasingly broad-based across the market, describing the record highs in the S&P 500 Equal Weight Index as “a testament to this,” with cycle drivers “still running hot.”
Although SocGen acknowledged that elevated market leverage and higher real bond yields could limit further valuation expansion, it argued that a meaningful market reversal would likely require much tighter monetary policy and an inverted yield curve—conditions the bank does not currently expect.
Given that backdrop, SocGen continues to favour the equal-weight version of the S&P 500 and maintains its target of 8,000 for the benchmark index.