Every quarter, Wall Street’s analysts predict what American companies will earn. This quarter, corporate America drove past those predictions honking. Of the 440-plus S&P 500 companies that have reported, 86% beat expectations. Altogether, profits came in about 29% above forecasts — the biggest upside surprise since this record began in 2008.
Read that again. Not the biggest beat in a while. The biggest beat since anyone started writing beats down.
Think about what a 29% miss means. These forecasters are professionals. Predicting profits is their whole job. They have spreadsheets, contacts, and eighteen years of practice. And companies still earned nearly a third more than the experts said they would. When the people paid to be right are wrong by that much in the happy direction, something real is happening underneath.
It is not a one-quarter sugar rush, either. The index is heading for its seventh straight quarter of double-digit profit growth. Total earnings are up roughly 50% since 2021. Through five noisy years, profits grew by half. That is not a hot streak. That is a machine.
The scoreboard
Energy was the loudest room. Sector profits rose 147%. Exxon Mobil (XOM) doubled its profit for its best quarter since 2022. Chevron (CVX) posted a record. The refiners — Marathon Petroleum (MPC), Valero (VLO), and Phillips 66 (PSX) — each had their best second quarter in four years. Oil in the $80s will do that.
Tech supplied the fireworks. Amazon (AMZN) jumped 15% in one day on its cloud results. Microsoft (MSFT) added a record $450 billion of market value in a single day — an entire giant company’s worth, created between breakfast and the closing bell. Nvidia (NVDA) rose 12% for its best week since May 2025. Even the heavy machinery showed up: Caterpillar (CAT) grew sales 24%.
| Company | The quarter’s headline |
|---|---|
| Exxon Mobil (XOM) | Profit doubled — best quarter since 2022 |
| Chevron (CVX) | Record quarterly result |
| Amazon (AMZN) | +15% in one session on cloud results |
| Microsoft (MSFT) | +$450B market value in a day — a record |
| Caterpillar (CAT) | Sales up 24% |
| Nvidia (NVDA) | +12% — best week since May 2025 |
The catch
Now the adult walks into the party and asks who is paying. The S&P 500 trades at about 28 times its last year of earnings — that multiple is simply what you pay for each dollar of profit. The 10-year average is 22.5.
In plain English: the market has already sent a thank-you note for profits that have not been earned yet. Paying 28 times assumes quarters like this keep arriving on schedule. Maybe they do — seven in a row is a real streak. But today’s price sits about 24% above its own decade average.
A fact versus a mood
Record profits are a fact. Record enthusiasm is a mood. The first one pays you. The second one quietly charges you, in the price.
So we hold both thoughts at once. The businesses are performing — measurably, across energy, cloud, and construction equipment. And the ticket to own them costs more than usual. You do not have to pick a side. You have to pick a discipline.
Ours is unglamorous on purpose. Own the companies actually producing these profits. And never let the market’s price decide the household budget. A retiree who needs grocery money in March should not be forced to sell stocks in March. That is what our ladder of Treasury bills — short-term government IOUs — is for: the next several years of spending sit there, so the stock side is free to be patient.
The best quarter on record deserves a toast. It does not deserve the mortgage.