The first-quarter earnings season has shaped up as the strongest in five years, with S&P 500 earnings per share growth tracking at 26% year-on-year — the highest since 2021. Even excluding one-time gains from Amazon, Meta, and Google, the figure remains at 18%. A remarkable 64% of companies beat both EPS and sales estimates, the best beat rate in half a decade. Bank of America strategists say the results, led by AI investment and commodity strength, support a full-year 2026 EPS growth forecast of 22%.
The AI spending boom continues to exceed expectations. Amazon, Google, Microsoft, and Meta collectively guided their 2026 capital spending $50 billion above consensus. Bank of America’s semiconductor team now projects total hyperscale capex for 2026 at over $800 billion, a 67% leap year-on-year, with a path toward $1 trillion in 2027. Capital spending as a share of operating cash flow is set to jump from 70% in 2025 to nearly 100% in 2026, pressuring near-term free cash flow.
All eyes are on Nvidia’s quarterly report, with analysts expecting $1.78 EPS on $79.2 billion revenue, an approximately 80% jump. Data-center chip demand remains the critical metric. Jim Cramer warned that Nvidia often rallies then faces “relentless hammering” as investors sell into strength, suggesting even a solid beat may not guarantee a sustained move higher. Meanwhile, European chip tool maker ASML rose 6.7% after UBS reinstated it as top pick, raising its price target to €1,900, underscoring global demand for advanced lithography systems essential to AI chip production.
Against this backdrop of traditional-market resilience, a crypto‑specific bright spot emerged. TD Cowen raised its price target on Strategy (formerly MicroStrategy) to $400, keeping a Buy rating and implying over 140% upside. Strategy’s stock is primarily valued as a leveraged Bitcoin treasury, so the upgrade signals growing institutional confidence in Bitcoin accumulation. With the broader earnings season and AI capex boom fueling risk appetite, the bullish call on Strategy may add further momentum to Bitcoin and the crypto market at large.
