If Big Tech earnings deliver, the bull run gets fresh legs

We’re at an all-time high for the S&P 500 right at the beginning of earnings season. If we can get through this earnings season with not too many major failures, this upward current momentum that we have in the market, is likely to continue.

It’s tempting to call this a pause for breath—but make no mistake, what follows could determine whether bulls stay in control.

With 59 S&P 500 companies already reporting and a staggering 86% surpassing estimates, according to FactSet’s latest, the bar being set is high. It’s a message: optimism is winning, but only if it endures.

The spotlight now turns to the elite of the elite: Alphabet and Tesla. These two giants, part of the so-called “Magnificent Seven,” are poised to set the tempo. FactSet forecasts these mega-caps will deliver about 14% year-on-year growth, dwarfing the modest 3.4% gain expected from the remaining 493 S&P members.  If they execute, markets could ride that booster straight into orbit.

Look at Alphabet first. Here’s a conglomerate that dominates search, YouTube, cloud, and is now making serious AI inroads. Analysts expect around 15% growth in earnings, with cloud revenue expanding in double digits. That’s robust by any standard.

However, the test will lie in translating AI investment into sustained profit, and avoiding regulatory traps that could dampen its shine.

Then there’s Tesla, which is a polarizing force in the EV and tech arenas. Yes, deliveries are down about 13.5% year-over-year, and earnings are estimated to fall roughly 19–20%, with EPS north of $0.40.

But Elon Musk is doubling down, reportedly sleeping in the office, laser-focused on robotaxi and tech updates. If he delivers on those fronts, sentiment could swing sharply positive, even if top-line figures remind investors of lumpiness in the core auto business.

This is why this phase of earnings feels nothing like a routine check-in. We’re perched on a razor’s edge: confirmation that growth remains intact—or the first sign that valuations teeter on thin air.

The S&P’s forward P/E sits around 22.2, higher than its five- and 10-year norms of 19.9 and 18.4, respectively. That’s a premium tied to performance. With 19 quarters of revenue growth already behind us, it’s time for proof that earnings can keep pace.

The message from the banks so far paints a picture: financials and healthcare are lifting earnings, while sectors like energy are lagging. But if Alphabet or Tesla stumble, it could offset gains and invite a broader reassessment. Conversely, if they deliver, and perhaps outperform, this rally gains fresh legs.

Why is this crucial? Because the backdrop remains complex. Tariff chatter, Fed policy shifts, geopolitical worries, they’re all still in play. But right now, the market isn’t fixated on macro headlines. It’s banking on this micro foundation: corporate earnings. A strong season builds confidence that transcends volatility.

It’s about narrative, too. When the S&P hits new heights just as earnings season begins, there’s a constancy in the story. It’s not just that the market is high, it’s that earnings are expected to follow suit. Beat expectations, and that narrative deepens; miss them, and the rally becomes vulnerable to challenges.

So, here’s where we stand: the Opening Act is strong. Momentum is palpable. But what matters most is what happens next. Can the Magnificent Seven deliver? Will Alphabet stave off AI disruption and regulatory spanners? Can Tesla quell concerns about shrinking deliveries and keep investor passion alive through its tech ambition?

Their answers will echo far beyond their own results; they’ll shape how investors view the entire S&P.

So buckle up. This week’s script will write the next chapter in the bull story. No one wants to see forceful resistance here. The market’s high ambitions demand high execution. If that comes, the journey upward continues.

Nigel Green is deVere CEO and Founder

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Also published on Medium.