Microsoft Earnings Growth Forecast Rises 18% as Capex Soars 89%
Consensus estimates now point to 18% earnings growth in 2026 for the Magnificent Seven, including Microsoft, up from 14% following a May selloff, while non-tech S&P 500 forecasts slipped to 11%. Microsoft’s capital spending rose 89% year-over-year as Big Tech commits $700 billion to AI infrastructure, contrasting Apple’s 19% cut.
1. Revised 2026 Earnings Growth Forecast
Consensus estimates now forecast 18% earnings growth in 2026 for the Magnificent Seven, including Microsoft, up from 14% after May’s tariff-driven selloff. Forecasts for the 493 non-tech S&P 500 companies edged down to 11%, underscoring Microsoft’s pivotal role in expected profit gains.
2. Capital Expenditure Surge
Microsoft boosted its capital spending by 89% year-over-year as Big Tech firms allocate roughly $700 billion to AI data centers, chips and infrastructure. This surge contrasts with Apple’s 19% capex reduction to $2.37 billion, highlighting divergent AI investment strategies within the sector.