The ability to discern subtle emotional cues is fundamental to human social intelligence. As artificial intelligence (AI) becomes increasingly common, AI's ability to recognize and respond to human emotions is crucial for effective human-AI interactions. In particular, whether such systems can match or surpass human experts remains to be seen. However, the emotional intelligence of AI, particularly multimodal large language models (MLLMs), remains largely unexplored. This study evaluates the emotion recognition abilities of MLLMs using the Reading the Mind in the Eyes Test (RMET) and its multiracial counterpart (MRMET), and compares their performance against human participants. Results show that, on average, MLLMs outperform humans in accurately identifying emotions across both tests. This trend persists even when comparing performance across low, medium, and expert-level performing groups. Yet when we aggregate independent human decisions to simulate collective intelligence, human groups significantly surpass the performance of aggregated MLLM predictions, highlighting the wisdom of the crowd. Moreover, a collaborative approach (augmented intelligence) that combines human and MLLM predictions achieves greater accuracy than either humans or MLLMs alone. These results suggest that while MLLMs exhibit strong emotion recognition at the individual level, the collective intelligence of humans and the synergistic potential of human-AI collaboration offer the most promising path toward effective emotional AI. We discuss the implications of these findings for the development of emotionally intelligent AI systems and future research directions.