Micron and Nvidia stand out as key drivers of S&P 500 earnings growth, even as their shares lag recent highs

Micron and Nvidia are being singled out as the two largest contributors to S&P 500 earnings growth in the third quarter, according to a market-focused analysis published by Yahoo Finance. The piece argues that if those two chipmakers are excluded, the index’s third-quarter earnings growth rate would drop by nearly a third, underscoring how outsized the semiconductor complex has become for broad index performance.

The analysis frames the issue as a disconnect between fundamentals and valuation expectations. While Micron and Nvidia helped lift the index’s earnings growth, the same article notes that both stocks are trading far below their peaks. That combination, it says, forces investors to think about what is already reflected in share prices, how much incremental upside remains, and whether the market is looking past today’s earnings momentum.

Nvidia is widely associated with demand for accelerated computing, including chips used in data centers for AI and other high-performance workloads. Those types of end markets have been a major focus for equity investors, especially when they believe spending cycles are durable. In the S&P 500 earnings arithmetic described by the analysis, Nvidia’s contribution is large enough that removing it would noticeably alter the index’s growth rate for the quarter.

Micron operates in the memory business, producing the DRAM and NAND flash used across servers, PCs, and mobile devices, as well as increasingly in AI infrastructure where faster and higher-capacity memory is a limiting factor. The analysis does not lay out a detailed breakdown of which memory categories or customers were most responsible for the quarter’s earnings contribution. However, it does treat Micron’s earnings as material to the broader index’s reported growth, indicating that the company’s results were not just marginal to the quarter’s headline performance.

The central question raised by the article is whether investors are discounting a normalization of results rather than expecting a continuation of the same earnings trajectory. When stocks fall from their peaks, it can reflect any combination of expectations for lower future growth, pressure on margins, concerns about demand durability, or simply a rotation away from crowded trades. The analysis does not provide an explicit causal explanation for why both shares are below highs, but it makes the valuation puzzle the centerpiece of its discussion.

At the index level, the implication is straightforward: when a small set of mega-cap or highly influential stocks account for a large portion of earnings growth, the S&P 500’s progress becomes more sensitive to semiconductor earnings swings. If those earnings contributions reverse, the impact would likely show up quickly in index-level trends, even if many other constituents post steady results.

There is also a measurement caveat. The Yahoo Finance piece centers on the earnings growth rate and the effect of excluding these two companies from the calculation. It does not, in the information provided here, specify whether the “nearly a third” figure comes from reported GAAP results, adjusted metrics, or a particular comparison baseline. That matters because the exact methodology can change how large each company’s contribution appears.

What to watch next is how both companies guide forward-looking demand and profitability, and whether subsequent quarters confirm that today’s earnings boost is resilient. For the market at large, the key will be whether semiconductor earnings strength remains concentrated in a narrow group of names, or whether broader participation returns, reducing the index’s reliance on a handful of chip-linked drivers.