Nvidia and Micron to drive one-third of S&P 500 earnings growth

Wall Street analysts are highlighting a significant concentration of earnings growth within the S&P 500, driven primarily by two semiconductor companies: Nvidia and Micron Technology. Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research, noted that Nvidia and Micron are expected to account for one-third of the index's projected 2026 earnings growth. Specifically, Nvidia is projected to represent 18% of the expected year-over-year growth, while Micron contributes an additional 14% through its AI memory chips.

Despite a massive surge in Micron's stock price since the start of 2025, market sentiment remains largely positive. While Mizuho recently trimmed its price target for Micron to $1,300 from $1,375 due to broader market multiple compression, the firm maintained an 'Outperform' rating. The median price target among 57 analysts stands at $1,600, suggesting potential upside. Analysts continue to monitor the AI trade, specifically whether concentrated earnings from these chipmakers can continue to justify their heavy index weights.