American companies are registering record profits, wide margins and an unprecedented share of the country’s income. The figures cited are drawn from the U.S. Bureau of Economic Analysis and FactSet; after-tax profit statistics include adjustments for inventory and capital consumption.
Why this matters
The corporate windfall is supporting the stock market but may also be contributing to persistent public dissatisfaction with the economy and skepticism about the AI boom that underlies much of the profit growth.
The latest
Tuesday is the unofficial start of third-quarter earnings season, when firms including JPMorgan Chase and Goldman Sachs will report results. Wall Street expects S&P 500 members to continue producing strong profits: FactSet estimates suggest S&P 500 third-quarter earnings per share (EPS) will rise roughly 29% versus the same quarter in 2025.
That projection follows an enormous 50% year-over-year increase in second-quarter earnings, a surge that was amplified by very large non-operating gains tied to revaluations of technology investments — for example, Amazon attributed more than $50 billion of profit to the value of its stake in Anthropic.
AI is powering profits — and they are highly concentrated
Analysts attribute much of the strength to the AI boom, but caution the gains are narrowly distributed. Ben Snider, chief U.S. equity analyst at Goldman Sachs, wrote that "AI infrastructure stocks are expected to drive more than half of S&P 500 EPS growth in Q3."
Snider also noted that more than two-thirds of total S&P 500 earnings growth for the quarter is expected to come from just 10 stocks. He singled out Micron Technology and Nvidia as companies that together could generate more than one-third of the index’s earnings growth.
Broader economic measures also show strength
Beyond stock-market metrics, economy-wide data show robust corporate profitability. According to the U.S. Bureau of Economic Analysis, after-tax corporate profits rose 18.2% in Q2 compared with the same quarter in 2025. Measures of corporate profit margins across the U.S. economy are near historical highs.
(Note: the referenced series measures after-tax U.S. corporate profits realized within the United States, including inventory and capital consumption adjustments, and does not include profits produced overseas. Data sources: FactSet, U.S. Bureau of Economic Analysis.)
The other side: a shrinking labor share
The corporate boom has a downside: the labor share of national income — the portion of the economy’s output paid to workers in wages and benefits rather than to corporate profits, dividends, rent and interest (capital) — has fallen toward some of its lowest recorded levels.
That decline helps explain why many Americans remain sour about the economy and skeptical of the AI-driven gains: much of the income produced by the economy is accruing to firms and investors, not to workers.
Bottom line
U.S. companies are generating record profits, largely propelled by AI-related investment and valuation gains concentrated in a small set of firms. At the same time, the falling share of income going to labor is intensifying public unease about the distributional effects of these gains.
Data sources: U.S. Bureau of Economic Analysis, FactSet. Chart credit: Axios/Matt Phillips. Note: after-tax profit figures include inventory and capital consumption adjustments.
