Q3 2025 Earnings Review: Performance, Market Revisions, Sentiment

Valuation concerns, especially for stocks tied most to the growth of AI, have been the backdrop for this latest earnings season. However, earnings continue to rise, potentially providing a counterargument to the ‘It’s the dotcom bubble all over again’ narrative.

The Q3 earnings season ultimately delivered, with 81% beating expectations. Leadership was again concentrated in Information Technology and Healthcare stocks, driven by AI adoption and Healthcare demand. While headline results were encouraging, revisions to Q4 estimates were mixed: 8 of 11 sectors saw Q4 EPS estimates revised downward after Q3 earnings.

In a positive shift, the tone of commentary on earnings calls showed a significant improvement compared to the previous quarter and relative to the longer-term average. As concerns around tariffs and interest rates recede, executives have been able to focus on their organization’s performance and outlook.

Earnings Performance

Surprises and Revisions

Executive Sentiment