The S&P 500’s latest earnings sprint has a surprising hero: the underdogs. While Big Tech’s AI bets once dominated the index’s profit growth, a quiet revolution is underway. Over the past year, 493 of the 500 companies in the benchmark have contributed to its fastest profit expansion in nearly five years, according to data from S&P Global. This shift isn’t just a statistical blip—it’s a seismic reordering of the market’s DNA, driven by industries and companies that once lived in the shadow of their tech titans.
The Quiet Revolution in the S&P 500
For years, the S&P 500’s earnings growth was a tale of two worlds: the stratospheric profits of Big Tech and the stagnant or declining results of the rest. In 2023, seven major tech firms accounted for over 60% of the index’s earnings growth, per a Bloomberg analysis. But by early 2026, that share had dropped to 38%, with the remaining 493 names increasingly lifting the index. This isn’t a random fluctuation—it’s the result of a confluence of macroeconomic forces, sector-specific resilience, and a market that’s finally rewarding diversity over concentration.
The shift is particularly striking in sectors like industrials, energy, and consumer discretionary, where companies have capitalized on supply chain reconfigurations, rising demand for renewable energy, and a resilient consumer. Take, for example, aerospace giant Lockheed Martin, which saw a 22% surge in Q1 2026 earnings amid increased defense spending, or renewable energy provider NextEra Energy, whose profits jumped 18% as utilities pivot to green infrastructure. These aren’t outliers—they’re part of a broader pattern.
Why the Underdogs Are Finally Getting Their Moment
The catalysts for this shift are as varied as the companies themselves. First, the Federal Reserve’s pivot from aggressive rate hikes to cautious easing in 2025 created a more favorable environment for non-tech sectors. Lower borrowing costs have allowed mid-cap and small-cap firms to invest in capacity and innovation without the debt burdens that once choked their growth. Second, global supply chain diversification has boosted industries reliant on manufacturing and logistics. Third, the AI boom hasn’t just benefited Big Tech—it’s created demand for hardware, semiconductors, and data centers, sectors where smaller players have carved out niches.
“This is the market recognizing that innovation isn’t just about algorithms,” says Dr. Lena Park, an economist at the University of Chicago’s Booth School of Business. “The real economic engine is the 493 companies that are rebuilding, adapting, and meeting real-world needs.” Her research highlights that sectors like industrials and materials have seen their profit margins expand by 4.2% year-over-year, outpacing the 2.8% growth in tech-heavy sectors.
The data tells a similar story. According to the S&P Global Market Intelligence, the average earnings growth for the S&P 500’s non-tech constituents in 2026 reached 11.3%, compared to 6.7% for the tech giants. This divergence isn’t just about numbers—it’s about a market that’s finally rewarding breadth over beta.
The New Ecosystem: Where Are the Gains Coming From?
While the tech sector’s AI bets remain a cornerstone of the economy, the underdogs are proving that profit growth can be more evenly distributed. Consider the agriculture sector: John Deere’s Q1 2026 earnings rose 14% as global food demand outpaced
