Earnings season is about to hit a major inflection point. This week, 77 S&P 500 companies are set to report second-quarter results — and the headline names couldn’t be bigger. Google-parent Alphabet and Tesla are both on deck, alongside General Motors and IBM. With market sentiment already rattled by a semiconductor selloff and rising geopolitical tensions with Iran, the stakes for this batch of reports are unusually high.
The season is off to a strong start: of the roughly 50 S&P 500 companies that have already reported, 88% have beaten analyst earnings expectations, according to FactSet. General Motors kicks things off Tuesday before the bell. Analysts polled by LSEG expect GM’s bottom line to have grown more than 25% year-over-year in Q2, and Deutsche Bank analyst Edison Yu — who carries a buy rating — says channel checks show no meaningful decline in consumer demand despite macro uncertainty. GM shares have risen after each of the last three earnings reports, including a 15% surge following Q3 results. Wednesday brings CME Group numbers, though the exchange operator’s earnings are expected to dip slightly as investors weigh the threat from perpetual futures contracts; Morgan Stanley remains overweight, citing CME’s 82% revenue tied to clearing and transaction fees. IBM also reports Wednesday evening after a brutal week — the stock suffered its worst single-session decline on record, plunging 25% on disappointing preliminary results, and Oppenheimer has already downgraded it to perform.
For retail investors, the real focus is Alphabet and Tesla. Alphabet’s AI investments, Search revenue trajectory, and YouTube ad growth will set the tone for the entire digital advertising sector — and reveal how much AI spending is translating into actual revenue. Tesla’s Q2 delivery numbers and any concrete update on the Robotaxi/Cybercab timeline will be key. Cantor Fitzgerald, overweight on Tesla, expects the autonomous vehicle segment to emerge as a high-margin, software-like business as it scales. With 88% of early reporters beating estimates, the earnings bar is high — but both megacaps have the potential to deliver meaningful upside surprises if they pair clean beats with strong forward guidance. Investors should position for significant single-day moves from both names post-report.
