S&P 500's AI-Driven Earnings Growth Fades

The S&P 500's earnings growth has reached its strongest point in years, thanks in large part to AI spending. According to Goldman Sachs, nearly half of the S&P 500's earnings growth can be attributed to investment in artificial intelligence.

Amazon, Meta Platforms, Alphabet, and Microsoft are among the hyperscalers expected to spend a total of $800 billion on capital expenditures in 2026, up 94% from 2025. This spending creates revenue for various companies, including chipmakers, hardware manufacturers, and utilities that supply power.

However, Goldman Sachs warns that this spending wave is quietly engineering a reversal that most investors have not yet recognized. The same factors that inflated profits are now working against them, with depreciation set to subtract roughly 5 percentage points from S&P 500 earnings growth in 2027.