Micron Technology and Nvidia are the top contributors to the S&P 500's year-over-year earnings growth in the third quarter of 2026, according to FactSet. Micron's adjusted earnings per share surged to $33.42 in its last quarter, up from $3.03 a year earlier. The company's revenue grew 379% year over year to $54.2 billion, with an operating margin of 80.7%. Nvidia, meanwhile, forecast fiscal third-quarter revenue of around $108 billion, nearly double the year-ago number. The company's profits are growing even faster than its sales, with non-GAAP net income jumping 118% year over year in its fiscal 2027 second quarter.
Despite their strong earnings, both stocks have seen declines. Nvidia shares are around $217, down 9% since their Oct. 6 record close, while Micron is near $905, about 25% below its June 25 record close of $1,213.56. FactSet's blended growth rate for the S&P 500 is 29%, but without Micron and Nvidia, it would drop to 20%. This highlights the significant impact these two companies have on the market's profit growth.
The article notes that Micron's profit growth from here depends mainly on revenue rather than margin expansion, as its operating margin has already peaked. Nvidia's outlook points to continued growth, but investors are not paying a premium for it, with the stock selling for around 14 times earnings on analysts' average estimate for the fiscal year ending in January 2028. The market seems skeptical about sustaining this growth rate.
The ranking also underscores the sources of growth, with Micron and Nvidia earning far more from their own operations compared to other companies in the S&P 500. The article concludes by suggesting that both stocks are worth buying at today's prices, despite potential risks such as a turn in memory prices or a slowdown in AI spending.