U.S. earnings beat at record pace, says Goldman Sachs' Kostin

Investing.com -- U.S. companies are reporting earnings beats at one of the fastest rates on record, according to Goldman Sachs’ chief U.S. equity strategist David Kostin.

“We are now 63% of the way through 3Q 2025 earnings season,” Kostin wrote, noting that 317 S&P 500 companies representing 69% of market capitalization have reported results.

“The frequency of earnings ‘beats’ has been unprecedented outside of the COVID period.”

Goldman Sachs said 64% of S&P 500 firms have exceeded consensus earnings-per-share forecasts by at least one standard deviation, a rate “surpassed only during the COVID reopening period in 2020–2021.”

Both sales and margins are said to have contributed to the upside, with aggregate S&P 500 sales growth tracking at 6%, versus 4% expected at the start of the season.

However, investors have been slow to reward strong results, according to Kostin.

“The median stock posting a positive earnings surprise has outperformed the S&P 500 by just 32 basis points on the day following the report,” the analyst noted, compared with a long-term average of 98 basis points.

S&P 500 earnings growth is said to be tracking at 8% year over year, slower than the 11% rate in the second quarter. Still, company guidance “has been solid,” with nearly half of firms offering fourth-quarter forecasts above expectations.

Goldman highlighted continued strength in artificial intelligence investment, saying hyperscaler capex spending continues to exceed expectations, now projected to rise 29% in 2026.

Kostin also noted that “large-cap U.S. companies are increasingly focused on labor efficiency,” with recent layoffs and AI productivity gains drawing investor scrutiny amid a “volatile macro backdrop.”

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