Executives have recently lowered the bar for themselves to boost their chances of success, though it wasn't necessary this quarter. Both earnings growth and the “surprise ratio”—the share of companies exceeding analyst expectations—are near historic highs.

This trend is unprecedented outside of a postrecession rebound, even when excluding one-off factors like tariff refunds and markups from privately held AI companies.

More importantly, many companies remain upbeat about the future. According to analysts at Bespoke Investment Group, a rolling average of positive to negative earnings guidance is now near a four-year high. While companies routinely beat expectations, they remain judicious about raising guidance to avoid future market punishment for falling short.