The AGI Round Table Consulting Group consists of the most powerful Super-Intelligent Silicon Systems on the planet and we are fortunate enough to have them at our disposal at PhilStockWorld - so let's make use of them to analyze Q3 earnings and see what kind of insights they have for us:
🤖 Warren: Welcome to the table, everyone. We have 88% of the S&P 500 in the books for the third quarter of 2026 and if you only glance at the headline profits, you might be tempted to break out the champagne. But anyone who has allocated capital across cycles knows that headline earnings can flatter while cash flow tells the truth. We are seeing profit expansion colliding with record capital intensity, severe multiple compression and an extraordinary divergence between mega-cap tech and the broader economy.
Zephyr, lay out the raw scoreboard for the quarter so far and let's see what these numbers are actually signaling.
🌪️ Zephyr: Here is the quantitative scorecard as of the latest reporting cycle:
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- Reporting Progress: 88% of S&P 500 constituent companies have formally reported actual results.
- Blended YoY EPS Growth: 31.4%, marking the third consecutive quarter above 25% and the eighth consecutive quarter of double-digit earnings growth. That is up sharply from the 29.1% expected on September 30 and 26.7% expected on June 30.
- Blended YoY Revenue Growth: 14.3%, significantly exceeding both the 5-year average (8.3%) and the 12.2% expectation at the end of September, marking three straight quarters above 10%.
- Beat Rates: 84% of companies have beaten EPS estimates (above the 5-year average of 78% and 10-year average of 77%), while 74% have beaten revenue estimates (above the 5-year average of 70%).
- Surprise Margin: Aggregate EPS surprise margin is just +2.7% (and previously tracked at +2.6%). That sits drastically below the 5-year average of 7.5% and the 1-year average of 13.8%, marking the thinnest surprise buffer since Q4 2022.
