Ahead of second quarter earnings results, analysts are keeping a close eye on technology infrastructure, global financial services, and a rebounding energy sector. The focus comes as the equity market shifts away from a highly concentrated, tech-led rally, with capital rotating out of lagging mega-cap tech names and into cyclical and value sectors such as materials, financials, and healthcare.
Within the tech industry, markets are grappling with whether or not all the investment in AI will translate into profits. Investors want to see that the hyperscalers’ AI products and investment in AI infrastructure translate into revenue and earnings. Within the finance industry, the focus is on deal-making momentum and net interest margin (NIM). Out of all industries, the energy sector is expected to be a strong outperformer, with markets expecting significant year-over-year earnings growth due to geopolitical volatility and ensuing supply chain constraints on oil and gas.
When it comes to the broader market, analysts are anticipating year-over-year earnings growth in excess of 20% for S&P 500 firms. This would mark the second quarter in a row where earnings growth was above 20%. Last quarter, sentiment broadly softened across most industries tracked by the AlphaSense Sentiment Indices, but still remained positive in 14 of the 15 sectors.
Behind the bullish earnings expectations are a capital expenditure-led earnings expansion due to AI investment, reshoring, and industrial policy. While large caps are expected to lead the earnings growth in the second quarter, analysts say mid caps are poised for exceptional third quarter growth acceleration, outperforming the large caps. Overall, analysts expect growth to peak in 2026 before slowing on a full-year basis in 2027.
Below, we take a deep dive into what analysts are saying about the tech, finance, and energy sectors, based on findings from AlphaSense.
AI Infrastructure Spending
Investors will be watching to see if the tech giants' massive spending on AI infrastructure, like data centers and advanced processing chips, will translate into revenue and profits. The five largest hyperscalers are expected to spend about $700 billion on AI infrastructure this year, nearly double their spending in 2025.
Just how quickly and to what extent firms can turn AI investments into profit remains a source of skepticism. That’s particularly the case for those building consumer grade AI models due to the everyday person’s price sensitivity.
Model API and cloud AI revenues has some uncertainty because pricing pressure is high. DeepSeek and open source models have made customers more cost sensitive.
A big beneficiary of the infrastructure spending boom is memory: Global DRAM sales are projected to surge 305% YoY in 2026, with NAND “flash” memory sales expected to jump 272%, according to broker research. Hyperscalers are rushing to secure limited capacity for these memory chips, driving a “super-cycle” for the industry. Analysts have raised their forecasts for major chip manufacturers like Samsung, SK Hynix, and Micron, and they expect the production constraints to drive a tight supply-demand environment well into 2027.
Related Reading: How AI Created a Memory Super Cycle: Key Drivers and Market Outlook
Banking Sector: Deal Momentum and Net Interest Margin
For the global finance sector, a pick-up in investment banking activity in the second quarter is expected to be accretive to earnings. Strong activity in equity capital markets in the second quarter and a slate of high-profile IPOs should serve as earnings tailwinds. These IPOs have also provided a “multiplier effect,” triggering secondary trading and financing activity. Big-ticket IPOs in the second quarter included SpaceX, Cerebras Systems, and Quantinuum.
Analysts will be scrutinizing NIM, a key measure of a bank’s profitability, to see if there is any evidence of compression. While most banks are predicting stable deposit costs for the remainder of the year, there is a risk they could creep higher due to increased competition and a hawkish Fed.
Oil Prices and the Strait of Hormuz
Energy stocks are considered likely to be a leader in earnings growth due to rising oil prices in the second quarter from the Middle East conflict. The Strait of Hormuz was closed for most of the second quarter — opening officially on June 18 after more than three months — which caused a spike in oil prices due to supply constraints. On April 30, crude oil surpassed $126 a barrel, which was the highest reading in four years.
Investors will also be monitoring executives' tone during upcoming energy earnings calls. The AlphaSense Energy sentiment index — which tracks sentiment across earnings calls for six major energy companies — showed a negative sentiment reading in the first quarter due to executives voicing concerns around the Middle East conflict and ensuing constraints on energy supply. Now that the Strait of Hormuz is open, there will be a lot of attention on what energy executives have to say about its impacts and forward-looking guidance. Some analysts are already predicting that oil prices will decline in 2027 as the global market shifts toward a market surplus following the resolution of recent geopolitical conflicts.
Keep Track of Industry Sentiment Across Earnings Calls
With the launch of the AlphaSense Sentiment Indices, readers can access a new tool to identify early signals of market confidence and risk across industries each quarter. The sentiment indices quantify shifts in executive language in earnings calls and monitor early signals in corporate conviction within 15 sectors, including aerospace and defense, biopharma, financials, energy, enterprise software and cloud, the Magnificent 7, medtech, and semiconductors. Check out the full list of indices here.
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