AI Capex Boom Masks Uncomfortable Truth About S&P 500 Earnings

Goldman Sachs' chief US equity strategist Ben Snider warns that the AI capex boom will not sustain S&P 500 earnings momentum much longer.

The AI investment boom has accounted for nearly half of S&P 500 earnings growth this year, but Snider expects this tailwind to fade next year even as capex spending continues to grow.

Snider points out that the recent surge in semiconductor profit margins leaves S&P 500 earnings vulnerable to a decline in chip prices. Industry analysts expect supply to remain tight through 2027, but the rate of margin expansion will slow next year.

This could compromise the momentum that powered the AI trade in 2026, as slowing AI infrastructure investment and increasing supply lower semiconductor prices and profit margins.