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Business · Corporate earnings · published 2026-09-26 · via 24/7 Wall St.

S&P 500 Earnings Surge Tied to AI Spending, but Goldman Warns Momentum May Fade

Image via 24/7 Wall St.
Image via 24/7 Wall St.

S&P 500 earnings per share rose 51% year over year in the second quarter, while trailing 12-month EPS increased 26%. Goldman Sachs Research estimates that nearly half of 2026 earnings growth comes from AI-related investment, with hyperscaler capital spending expected to reach about $800 billion. The bank cautions that depreciation from that spending could offset most AI earnings gains by 2028, leaving the market's next move dependent on broader productivity improvements.

Expanded Detail

Second-quarter S&P 500 EPS rose 51% year over year, while trailing 12-month EPS gained 26%, versus roughly 7% average annual growth over three decades. Goldman Sachs strategist Ben Snider attributes almost half of 2026 earnings growth to AI-related investment.

Large cloud providers’ capital spending is projected near $800 billion in 2026, up 94%, then $1.2 trillion in 2027 and $1.4 trillion in 2028. Depreciation may subtract about 5 percentage points from 2027 earnings growth, nearly offsetting AI capex’s roughly 11-point boost, and could fully offset added AI investment by 2028.

Context

The AI-driven earnings surge may affect retirement savers and investors through index funds tied to S&P 500 profits. Workers in chipmaking, data-center hardware, power infrastructure, and utilities could see demand rise. If depreciation and fading memory margins offset AI gains, market returns could weaken, potentially influencing corporate hiring, investment, and consumer confidence. Sustaining broader benefits may depend on AI generating economy

Expanded detail and Context are AI-generated analysis; the linked article remains the authoritative source.
Read the full article at 24/7 Wall St. →
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This summary is Al-enhanced to contain extended analysis and broader social context. The original is {NAME); the linked article is the authoritative source. Original headline: “The AI Boom Just Drove S&P 500 Profits 51% Higher, but Its Biggest Tailwind Is Fading.” Browse more stories.