Aggregate Q2 earnings expectations increase: LSEG

Excluding massive unrealized investment gains at Google's parent Alphabet GOOGL.O, blended expectations for second-quarter earnings growth in S&P 500 companies .SPX have risen to 27% from 26% a week ago, according to the latest data from LSEG.

If a $77.1 billion unrealized gain on equity securities at Alphabet was included, this would put the current estimate for Q2 earnings growth at 38.8%, according to Tajinder Dhillon, head of earnings research at LSEG.

"We've now seen this for two consecutive quarters. Alphabet's significant unrealized investment gains meant a significant portion of reported earnings came from non-operating income rather than its core operations," Dhillon told Reuters.

The mark-to-market gains at Alphabet were also the main factor in lifting the Q2 growth estimate for the Communication Services index .SPLRCL to 112.1% from 8.5% last Friday. Without the investment gain, the growth estimate for Q2 earnings is 9.3% for the sector, Dhillon said.

Blended estimates include results that have been reported along with analyst expectations for companies that have yet to report their Q2 numbers.

Late on Wednesday, Alphabet reported its best-ever quarter of growth for its cloud computing division, but its shares tumbled 7% on Thursday as it faced investor scrutiny over continued delays to its flagship AI model and worries about a increase in capital spending plans for 2026.