Lebenthal: NVDA and Micron account for nearly all S&P tech earnings growth

Here is simply a fig worthy sitting with: portion Nvidia and Micron retired of Q1 S&P net and wide S&P net maturation drops to astir 3%. That came from James Lebenthal successful a caller interview, and I haven't stopped reasoning astir it since.

Tech is expected to turn net astir 30% this year, and virtually each of that maturation is attributable to conscionable 2 names. Google, Apple, Microsoft, and Meta, helium said, are showing unimpressive Q1 net growth. The header fig flatters a representation that is, underneath, rather thin.

NVIDIA (NASDAQ:NVDA) conscionable closed retired a fiscal twelvemonth that is astir hard to picture successful mean terms. Full-year FY2026 gross deed $215.94 billion, up 65% twelvemonth implicit year, with nett income of $120.07 billion. Q4 unsocial printed $68.13 cardinal successful revenue, with Data Center up 75% twelvemonth implicit twelvemonth and Data Center Networking up 263%.

Jensen Huang connected the net call: "Computing request is increasing exponentially — the agentic AI inflection constituent has arrived." Q1 FY2027 guidance calls for astir $78 cardinal successful revenue, and that fig excludes immoderate Data Center compute gross from China.

I've work beauteous overmuch each net study connected NVIDIA for years now, and the sequential acceleration passim FY2026: $44 billion, $47 billion, $57 billion, $68 billion, is dissimilar thing I've tracked successful endeavor technology.

Micron (NASDAQ:MU) is the quieter broadside of Lebenthal's thesis, and arguably the much absorbing one. Fiscal Q1 2026 gross came successful astatine $13.643 billion, up 57% twelvemonth implicit year, with non-GAAP EPS of $4.78 against an estimation of $3.94. GAAP gross borderline expanded from 38.4% to 56.0% twelvemonth implicit year.

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The guardant usher is wherever it gets serious. Q2 FY2026 guidance calls for $18.70 cardinal successful gross and non-GAAP EPS of $8.42 — astir treble the Q1 EPS successful a azygous quarter. CEO Sanjay Mehrotra said: "Our Q2 outlook reflects important records crossed revenue, gross margin, EPS and escaped currency flow."

Micron is the lone U.S.-based representation manufacturer, and its high-bandwidth representation concern is straight plugged into the aforesaid AI infrastructure buildout driving NVIDIA's numbers. The Cloud Memory Business Unit generated $5.284 cardinal successful Q1 astatine 66% gross margins.

The S&P 500 is down astir 3% twelvemonth to date. Lebenthal framed the situation arsenic genuinely foggy — the marketplace sits astir 30 points from its 200-day moving average, making assertive abbreviated positions risky with nary wide directional signal. He besides noted that historically, markets are up betwixt 35-44% 2 years aft large subject conflicts, a existent bull lawsuit sitting alongside the attraction hazard helium flagged.