I still remember the house on our street that passed out king-sized candy bars when I was growing up. You had to get there early, but stopping by that neighbor’s house was one of the things I looked forward to most. Still, no Halloween haul was complete without a wide array of chocolate and gummy candies to sort through at the end of the night. Many times, I got candy varieties I enjoyed even more than the king-sized candy bar.
I see a similar story shaping up with a variety of earnings expectations from sectors beyond those rooted in artificial intelligence (AI). AI may still be the king-sized candy bar everyone rushes toward, but this quarter, the variety from non-AI sectors is proving surprisingly satisfying.
As third-quarter earnings results start crossing headlines, corporations face high expectations to beat. Interestingly, market segments not rooted in AI infrastructure are starting to show a strong foundation. That’s not to say AI isn’t the main engine driving projected growth this quarter, but it makes a strong case for long-term investors with diversified portfolios.
One of the primary indicators of economic growth is inflation-adjusted gross domestic product (GDP), which is projected to grow by more than 3% in the third quarter. This is up sharply from the 1.8% growth forecasted for the second quarter. These figures support the positive earnings outlook in the non-AI sectors. The same sectors are projected to post earnings above 17%, and potentially higher given rising GDP projections.
This makes the 2026 third-quarter earnings season especially unique, given how high the bar has been set. In the S&P 500, 41% of companies that provided data raised their earnings estimates, the highest positive guidance ratio in over 5 years. This raises the question of whether high earnings estimates increase the likelihood of earnings disappointment in a quarter; research shows they do not. Since 2012, the best quarter returns followed strong positive guidance ratios, and the weakest followed quarters where the bar was set low.
What does this mean for the long-term diversified investor? This broadening growth across sectors matters, especially in a market where investors want confirmation that growth isn’t centered in a single sector. Even though AI Infrastructure and cloud computing remain the primary driver of equity growth, investors may begin to see other sectors in their equity holdings provide a strong foundation for long-term market performance alongside the growing tech landscape. A diversified portfolio can capture the benefits of these non-AI sectors while also benefiting from technology and tech-related infrastructure performance in the coming months. As more earnings reports roll in, investors will watch whether non-AI sectors deliver the growth they forecast and sustain that momentum into the fourth quarter.
Just like that Halloween haul, the value isn’t only in the king-sized candy bar but, rather, in the variety. This quarter’s earnings suggest the mix may be getting richer. While I don’t go door to door looking for king-sized candy bars anymore, I’ll still enjoy the smiles they bring to faces across the neighborhood as children sort through their assortment of goodies on Halloween night.
Have a blessed week!
Natalie Garrison
www.FerventWM.com
This article was written by humans for humans because AI doesn’t have this quality of sarcasm.
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC. Opinions voiced above are for general information only & not intended as specific advice or recommendations for any person. All performance cited is historical & is no guarantee of future results. All indices are unmanaged and may not be invested directly. This article reflects information available on October 27, 2026.
All investing involves risk, including loss of principal. No strategy assures success or protects against loss. The economic forecast outlined in this material may not develop as predicted & there can be no guarantee that strategies promoted will be successful. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Fervent Wealth Management is a financial management and services entity in Springfield, Missouri.