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The article argues that American corporate profits have become the strongest rebuttal to the gloom around the United States. Investors have spent weeks trying to price war in the Gulf, tariffs, erratic presidential threats and fears about American decline. Yet the earnings data tell a different story: big American companies are still producing striking profit growth, and Wall Street is treating that strength as more important than the political noise.

The piece does not claim that geopolitics no longer matters. Higher energy prices, more trade-war escalation or a crisis around the Federal Reserve could still damage confidence. Its point is narrower and sharper. For now, the corporate sector entered the turbulence with enough innovative capacity, pricing power and financial resilience to keep expanding earnings. In the contest between decline and dynamism, the article says dynamism is still winning.

AI Leads The Surprise

The most visible source of profit growth is artificial intelligence. FactSet estimates that aggregate earnings for the S&P 500 rose by 19% in the first quarter from a year earlier, and analysts expect earnings over the next 12 months to be 24% higher than a year ago. That kind of optimism is unusual outside recoveries from deep recessions.

AI explains much of the enthusiasm. Four of the five biggest contributors to American earnings growth in the first quarter are tied to the AI boom. Nvidia remains the clearest example: as the dominant chipmaker for AI model-builders, it is expected to increase already large earnings in 2026 by nearly 80%. Broadcom, another chip designer, is also expected to do well. Memory-chip makers such as Micron and Sandisk are benefiting from shortages in components useful for AI systems, with analysts forecasting dramatic earnings increases.

This gives the article a useful correction to the usual AI narrative. Much of the debate around AI focuses on whether firms are spending too much on data centres and whether model builders will earn adequate returns. The Economist shifts attention to the suppliers and adjacent companies already seeing profits. Even if some AI investment eventually disappoints, the current earnings boom is not purely speculative. Parts of the ecosystem are already converting demand into cash.

Strength Beyond Big Tech

The article is careful not to make the story only about the magnificent seven. Excluding Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla, FactSet still expects the remaining S&P 500 companies to increase earnings by 16% in 2026. Excluding the whole information-technology sector, expected index-wide profit growth remains about 17%.

That comparison matters because it suggests American corporate strength is broad rather than merely a narrow tech bubble. The article notes that expected profit growth outside big tech is roughly comparable to Japan’s TOPIX including its technology stars, about twice Europe’s STOXX 600 and around five times Hong Kong’s Hang Seng index. The United States is not just home to a few extraordinary companies. Its public-company base still looks unusually productive relative to other major markets.

Other sectors reinforce the point. Financial firms, a useful gauge of the wider economy, increased revenues by more than 10% and profits by nearly 20% in the first quarter. Materials companies also produced strong gains, with mining and metals firms especially buoyant. Even less glamorous areas such as health care and consumer goods showed an ability to beat expectations. Eli Lilly’s expected results, helped by demand for weight-loss drugs, could make it one of the largest contributors to S&P 500 earnings growth for the quarter.

Buffers, Pricing Power And Risk

The article’s explanation is straightforward: American companies came into the shock in good shape. They had built buffers against tariffs and supply disruptions. Many had enough pricing power to pass higher costs to consumers. Consumers dislike the price increases, and surveys show sour sentiment, but spending has continued. That combination lets firms protect margins even while households complain about the squeeze.

The deeper advantage is innovation. The article points to AI, pharmaceuticals and other high-value sectors as evidence that the United States still generates businesses with global pricing power. That is why investors can look past some of the surrounding disorder. They may not admire the political backdrop, but they see companies with products the world wants, balance sheets that can absorb shocks and management teams that can preserve profits through difficult conditions.

The risks are real. A prolonged Gulf war could push energy costs high enough to slow growth and revive inflation. More tariff salvos could weaken demand or supply chains. An attempt by Donald Trump to interfere with the Federal Reserve or the midterm elections could damage faith in American institutions. The article does not dismiss any of this. It simply observes that those dangers have not yet overpowered the profit machine.

The Takeaway

The article’s main insight is that American exceptionalism is still visible in earnings, not just rhetoric. Markets may swing with war headlines and presidential posts, but corporate results have so far given investors a firmer reason to stay optimistic.

That optimism should not be confused with complacency. Politics can still erode institutions, energy shocks can still bite and trade conflict can still impose costs. But the article argues that the United States retains an unusually powerful corporate engine. AI chips, drugs, finance, mining and consumer brands are not all the same story, yet together they show a business system that remains hard to knock off course.

The cleaner conclusion is that American decline is not inevitable while American companies keep compounding advantages in innovation, scale and profitability. The country may be politically erratic, but its listed companies are still producing numbers that much of the world cannot match.