More S&P 500 companies have issued positive Q1 earnings guidance than at any time in the last five years, according to FactSet. At the same time, the number of S&P companies issuing negative Q1 EPS guidance is close to a five-year low.

So far, of the 110 index members who have issued quarterly guidance, 59 are positive while 51 are negative. This marks the highest number of positive outlooks since Q2 2021 and the lowest level of negative outlooks since Q4 2021.

Guidance is classified as positive if the company’s EPS estimate is above the mean estimate the day before it was issued.

Tech companies are the most bullish

At a sector level, Technology companies are the most upbeat with 33 positive outlooks. That is well above the five-year and 10-year averages and the second-highest sector reading since 2006.

Altogether, Tech stocks represent over half the number of positive Q1 earnings outlooks. Among those, Semiconductors and Semiconductor Equipment firms are the most numerous with 10 positive outlooks.

Outside of Tech, Consumer Discretionary, Industrials and Materials companies are the next most bullish by volume.

Where are forecasts?

Remarkably, despite the Middle East conflict and soaring energy prices, Q1 EPS forecasts are higher now than at the start of the year. Moreover, the S&P 500 is predicted to post double-digit earnings growth for the sixth straight quarter.

Analysts are predicting Q1 EPS growth of 13.2% for the S&P 500 compared with 12.8% at the start of the quarter. Nine out of 11 sectors are expected to post year-on-year growth, led by Tech, Materials and Financials.

Only two sectors are predicted to report a fall in Q1 earnings, Healthcare and Commercial Services. The biggest upgrades to Q1 expectations have come from Tech and, unsurprisingly, Energy companies, at 8% and 8.6% respectively.

For the rest of 2026, analysts expect EPS growth of 19.1% in Q2, 21.2% in Q3 and 19.3% in Q4.