Nvidia, Broadcom Just Helped Break a 90-Year Earnings Trend—Now Comes the Hard Part

Strong quarterly results from Nvidia Corporation (NASDAQ: NVDA ) and Broadcom Inc (NASDAQ: AVGO ) show the AI trade continues to be alive and well. How alive is the AI trade? The strength of the sector is helping the S&P 500 do something not done in 90 years. 5% year over year.

4% year-over-year. Overall, S&P 500 earnings are up 31% in the second quarter of 2026, well above the 23% Wall Street expected, according to data from RIA Advisors. RIA Advisors shares a trend line that has held for 90 years in a newsletter. The S&P 500 earnings have stayed within a standard deviation of +/- 2, except for dropping below the floor in 2008.

, the AI sector did most of the heavy lifting for earnings growth. AI names saw eps growth of 54% in the quarter, compared to 14% growth for non-AI names. RIA Advisors asks if "this time is different" for investors or if there should be skepticism on the earnings growth lasting. 1x, according to RIA Advisors.

Read Also: S&P 500 Up 13% Six Months Into Iran War, and History Says That's Normal What Happens Next Based on the trend line of the last 90 years, there will now be extreme pressure on the AI names for the third quarter and beyond. " RIA Advisors believes investors are pricing a higher likelihood of option one. The report says forward earnings estimates have been climbing, but forward multiples are not increasing. The report cautions that investors should ride the trend, but also keep cash on hand and invest in bonds for safety if option two happens.

"The trend is your friend, right up until the bend at the very end. Position for the friend. " Read Also: EXCLUSIVE: Top 12 Most-Searched Tickers in August on Pro — SpaceX, Nebius Climb, Palantir Returns Photo: Shutterstock AI Generator