When Does Q4 Start? Understanding the Tech Earnings Cycle and Current Market Performance

The Q4 Earnings Season: What to Expect

When does Q4 start and why should investors care? The December quarter earnings season is now underway, with major tech players beginning to reveal their financial performance. Through mid-December, 18 S&P 500 companies have already reported results for their fiscal quarters ending in November—a category that includes Oracle, FedEx, Nike, and Adobe. These early movers have set the tone: combined earnings surged 32.2% year-over-year on 9% higher revenues, with an impressive 83.3% beating EPS expectations and 72.2% topping revenue projections.

Looking ahead at the full Q4 cycle, the S&P 500 index is expected to deliver earnings growth that continues the positive momentum seen over the past two years. The Tech sector remains the driving force, consistently attracting positive estimate revisions since the start of Q4 in October.

Tech Sector’s Dominant Role in Q4 and Beyond

The Technology sector accounts for nearly one-third of S&P 500 earnings—a staggering concentration that underscores its criticality to overall market performance. For Q4 specifically, analysts expect the Tech sector to maintain its growth trajectory, with forward guidance suggesting sustained strength through 2026 and into 2027.

What makes this particularly noteworthy is the consistency of upward estimate revisions. Had it not been for these positive adjustments to Tech forecasts since October, aggregate S&P 500 earnings estimates for Q4 would be modestly lower. This reflects the market’s confidence in big Tech’s ability to monetize AI investments and expand revenue streams.

Oracle’s Complex Financial Position

Oracle’s recent quarterly results illustrate the complexities facing even dominant tech players. The December fiscal report revealed mixed signals: the company missed revenue and margin targets while signaling higher capital expenditure commitments. This contrasts sharply with September’s quarterly release, which sparked a 33% rally in the stock.

The underlying issue centers on Oracle’s massive capex requirements. Fiscal year 2025 capex totaled $21.2 billion—more than triple the $6.7 billion spent in FY 2024. Despite generating $20.8 billion in free cash flow, Oracle ended the year free cash flow negative. Looking forward, management projects a $50 billion capex budget for FY 2026, approximately double the operating cash flow it expects to generate. This means Oracle will likely need to lean on debt markets to fund infrastructure investments through 2027.

Long-term debt as a percentage of total capital tells part of the story. Oracle’s balance sheet shows notably higher leverage than Microsoft’s, though the company maintains investment-grade status (BBB rating from S&P—the lowest rung). The connection to OpenAI amplifies concerns: Remaining Performance Obligations (RPO) jumped to $523 billion this quarter, up from $208 billion previously. Analysts note that roughly $300 billion of this surge traces back to OpenAI commitments, creating significant customer concentration risk.

Yet context matters. Oracle isn’t facing financial distress; rather, it’s a growth-stage reinvention. While RPO conversion carries more uncertainty than peers like Microsoft ($392 billion) or Alphabet, it remains a critical component of Oracle’s AI-era positioning. The valuation discount to Microsoft—currently 18% versus a 10-year median of 28%—reflects this transition.

Mag 7 Earnings Outlook: The Market’s Main Engine

The “Magnificent 7” group dominates Q4 earnings expectations. For the December quarter, these mega-cap players project +16.9% earnings growth on +16.4% revenue expansion. More importantly, the group’s earnings outlook is improving: 2026 estimates now point to +16.6% growth, followed by +18% in 2027.

This matters enormously for index performance. The Mag 7 will account for 26.4% of total S&P 500 earnings in 2026, up from 23.2% in 2024 and just 11.7% in 2019. Combined with their 34.6% market cap weight in the index, this concentration means Mag 7 performance essentially drives overall market returns.

It’s worth noting that Zacks’ sector classification places Amazon within Retail and Tesla within Auto—sectors the research firm tracks separately. This nuance affects how investors should interpret “Tech” earnings versus broad-based market performance.

Navigating Q4 and the Broader Earnings Landscape

As Q4 unfolds and results accumulate, investors should focus on several key themes. The Technology sector’s dominant contribution to earnings growth shows no signs of abating. Positive estimate revisions continue flowing in, suggesting confidence in forward guidance.

Oracle’s situation exemplifies the broader tension in today’s market: incredible growth opportunities tied to infrastructure-heavy capital requirements. The company’s OpenAI exposure, while concentrated, positions it as a critical infrastructure provider for the AI wave rather than a speculative play.

The current earnings season scorecard shows strong execution across the board, with beat rates well above historical averages. As more companies report through the remainder of Q4, watch for any deterioration in revenue beat rates or guidance reductions—early signs that the positive momentum may be stalling. For now, the data supports a constructive outlook on Tech earnings, the Mag 7’s continued dominance, and the broader market’s trajectory into 2026.