Global Equity Investor Insight | August 2026

Aug 21, 2026
Jeremy Richardson 80 x 80.jpg
Jeremy Richardson

What is on the Q2 scorecard?

Jeremy Richardson unpacks the Q2 earnings scorecard, identifying the standout winners, how easing CapEx concerns are shifting investor confidence and why opportunity may be broadening well beyond technology.

Highlights

  • Cloud hyperscalers are emerging as one of the Q2 winners. Whether their data centres run a few expensive LLMs or a multitude of cheaper open-weight models, the growth in AI usage is what drives their business.
  • CapEx concerns are easing as companies begin to articulate stronger returns on investment, with 2027 estimates jumping roughly 25% from $750 billion to $1 trillion.
  • Looking beyond technology, earnings estimates are beginning to show signs of positive delta, encouraging investors to open their minds, broaden their shopping list, and to look at the more neglected parts of the market.

Jeremy Richardson

Hello. This is Jeremy Richardson from the RBC Global Equity team here with another update. The Q2 earnings season continues to roll forward. It looks as though the scorecard, though, is becoming clearer.

One of the major groups of winners appears to be the major cloud computing hyper-scaling companies. Part of the reason for this is because of something that's been going on within the broader industry, but also some things which are a bit more company-specific. On the broader industry point, we've seen the emergence of smaller open-weight models which are giving the large language models a run for their money. The large language models are the most capable. They are the leading edge of technology, but they also can be quite expensive to operate. The smaller open-weight models provide an alternative for users, which actually reduces quite a significant amount of cost without a big compromise in terms of quality. Now, for the large language model companies, of which there are two major private ones still, this raises some question marks about the development of their particular industry. For the cloud computing companies, the hyper-scalers, they're rather agnostic to that because whether in their data centres, they're running large language models or a multitude of smaller open-weight models, it doesn't really matter so much for them. Because they are de-risked to this and instead geared very much into the growth of AI usage, these hyper-scalers are beginning to be seen as more as a group of winners because of this industry change.

The second thing, though, which is a bit more company-specific, is that a number of them have been able to articulate improving returns on investment. This is something that the market has been worried about because of the increasing amounts of CapEx going into the industry. Some of these increases are quite eye-watering. In fact, just this quarter, we've seen estimates of 2027 CapEx go up by around a quarter from about $750 billion to $1 trillion for next year. These are astonishing amounts. Of course, if the returns on investment on this CapEx is questionable, then obviously that's going to be bad news for the stocks and the company spending that money. The news from some of the companies is that they're beginning to see very strong returns on investment on the capital that they're putting in.

One of the major data points that I think is giving investors renewed confidence is the fact that the semiconductors, the chips going into these data centres, are not being fully utilised and exhausted after three years, as I think a lot of people were fearing not so very long ago, but actually have now got extended lives. They're proving more useful for longer. That creates more opportunity for the data centre companies to monetise that investment. Confidence in part of investors is improving for the future returns. As I say, these companies are beginning to show themselves as emerging winners as a result of the Q2 earning season. But it would be wrong to say that this is the only game in town. I think one of the underappreciated dynamics of this earning season is that we're actually now beginning to see improving estimates from other parts of the market as well. Now, to be fair, the rates of improvement are not quite the same as we continue to see in technology. Earnings estimates growth in that part of the market are well in excess of 50% for the next 12 months ahead.

But let's not discount what we're seeing in the broader part of the economy here either, because earnings estimates there are also beginning to show some signs of a positive delta. That is encouraging investors to open their minds, to broaden their shopping list, and to look at the more neglected parts of the market, which I would think is a very positive dynamic. I hope this has been of interest, and I look forward to catching up with you again soon.
See all insights

Related insights

Global Equity Investor insight | July 2026
3 mins watch
Jeremy Richardson 80 x 80.jpg
Jeremy Richardson
Jul 28, 2026

Global Equity Investor insight | June 2026
3 mins watch
Jeremy Richardson 80 x 80.jpg
Jeremy Richardson
Jun 23, 2026

Global Equity Investor insight | May 2026
3 mins watch
Jeremy Richardson 80 x 80.jpg
Jeremy Richardson
Jun 02, 2026

Related specialism

Global equity

We invest long-term in great businesses at attractive valuations, leveraging ESG insights to unlock alpha opportunities.

Read more

Sign up for insights by email

Subscribe now to receive the latest investment and economic insights from our experts, sent straight to your inbox.

Sign up now

This material is provided by RBC Global Asset Management (RBC GAM) for informational purposes only and may not be reproduced, distributed or published without the written consent of RBC GAM or its affiliated entities listed herein. This material does not constitute an offer or a solicitation to buy or to sell any security, product or service in any jurisdiction; nor is it intended to provide investment, financial, legal, accounting, tax, or other advice and such information should not be relied or acted upon for providing such advice. This material is not available for distribution to investors in jurisdictions where such distribution would be prohibited.


RBC GAM is the asset management division of Royal Bank of Canada (RBC) which includes RBC Global Asset Management Inc. (RBC GAM Inc.), RBC Global Asset Management (U.S.) Inc. (RBC GAM-US), RBC Global Asset Management (UK) Limited (RBC GAM-UK), and RBC Global Asset Management (Asia) Limited (RBC GAM-Asia), which are separate, but affiliated subsidiaries of RBC.


In Canada, this material is provided by RBC GAM Inc. (including PH&N Institutional), which is regulated by each provincial and territorial securities commission. In the United States (US), this material is provided by RBC GAM-US, a federally registered investment adviser. In the United Kingdom (UK) and Australia this material is provided by RBC GAM-UK, which is authorised and regulated by the UK Financial Conduct Authority. In the European Economic Area (EEA), this material is provided by BlueBay Funds Management Company S.A. (BBFM S.A.), which is regulated by the Commission de Surveillance du Secteur Financier (CSSF). In Germany, France, Sweden, Italy, Spain and Netherlands the BBFM S.A. is operating under a branch passport pursuant to the Undertakings for Collective Investment in Transferable Securities Directive (2009/65/EC) and the Alternative Investment Fund Managers Directive (2011/61/EU). In Spain, BlueBay Funds Management S.A is registered with the CNMV under No. 607. In Switzerland, this material is provided by BlueBay Asset Management AG where the Representative and Paying Agent is BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, 8002 Zurich, Switzerland. In Japan, this material is provided by BlueBay Asset Management International Limited, which is registered with the Kanto Local Finance Bureau of Ministry of Finance, Japan. In Asia, this material is provided by RBC GAM-Asia, which is licensed by the Securities and Futures Commission (SFC) in Hong Kong.


Additional information about RBC GAM may be found at www.rbcgam.com.


This material has not been reviewed by, and is not registered with any securities or other regulatory authority, and may, where appropriate and permissible, be distributed by the above-listed entities in their respective jurisdictions.


Any investment and economic outlook information contained in this material has been compiled by RBC GAM from various sources. Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by RBC GAM, its affiliates or any other person as to its accuracy, completeness or correctness. RBC GAM and its affiliates assume no responsibility for any errors or omissions in such information.


Opinions contained herein reflect the judgment and thought leadership of RBC GAM and are subject to change at any time. Such opinions are for informational purposes only and are not intended to be investment or financial advice and should not be relied or acted upon for providing such advice. RBC GAM does not undertake any obligation or responsibility to update such opinions.


RBC GAM reserves the right at any time and without notice to change, amend or cease publication of this information.


Past performance is not indicative of future results. It is not possible to invest directly in an index.


Some of the statements contained in this material may be considered forward-looking statements which provide current expectations or forecasts of future results or events. Forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Do not place undue reliance on these statements because actual results or events may differ materially from those described in such forward-looking statements as a result of various factors. Before making any investment decisions, we encourage you to consider all relevant factors carefully.


® / TM Trademark(s) of Royal Bank of Canada. Used under license.
© RBC Global Asset Management Inc., 2026

Sign up for insights by email

Subscribe now to receive the latest investment and economic insights from our experts, sent straight to your inbox.

Sign up now