S&P 500 profit margins hit record highs in Q2, but one company is doing a lot of heavy lifting

Corporate America just posted its fattest margins on record. The S&P 500’s blended net profit margin hit 15.7% in Q2, according to FactSet, eclipsing the previous high of 14.8% set just one quarter earlier. That’s a meaningful jump from the 12.9% logged in Q2 2025, and the best reading since FactSet began tracking the metric in 2009. Eighty-six percent of companies beat their earnings per share estimates during the quarter. The index is now on track for its 10th consecutive quarter of earnings growth. The Alphabet effect Alphabet reported $112 billion in quarterly net income during Q2. That number is staggering on its own, but roughly $77 billion of it came from unrealized gains on various investments, including its stake in SpaceX. Strip Alphabet out of the calculation entirely, and the S&P 500’s blended margin drops to around 14.4%. That’s still a solid number, but the gap between 15.7% and 14.4% illustrates just how much a single company can move the needle for an index of 500. Broad strength, with caveats Seven out of eleven S&P 500 sectors posted year-over-year margin improvements. Eight sectors beat their five-year average margins. Health care stood out as a notab...