S&P 500 giants are pouring hundreds of billions into AI infrastructure. Nvidia, Microsoft, Amazon, and others are expanding their data centers, chips, and servers at an unprecedented pace. Goldman Sachs has just tackled a controversial question: what impact will this have on the index’s ROE (return on equity)? 📊
🔍 What’s happening?
Goldman Sachs has published a detailed analysis of the effect of the boom in AI-related capital expenditures (capex) on the profitability of S&P 500 companies. The bank examines how these massive investments are weighing on margins in the short term, even as the promise of future gains remains enormous.
The timing is strategic. U.S. big tech companies have announced record investment plans for 2026, with budgets sometimes reaching $50 to $60 billion per year per company. Goldman breaks down whether these expenditures will actually create value or simply dilute profitability.
💡 Why does this matter?
For traders monitoring the S&P 500 or the Nasdaq, this analysis is crucial. If the ROE of tech giants begins to decline under the weight of AI capex, current valuations (often stratospheric) become difficult to justify. An S&P 500 trading at 22 times earnings with declining profitability smells like a trap.
The technology and communications sectors now account for more than 40% of the S&P 500. If their margins shrink, the entire index suffers. Goldman highlights a structural risk that many bulls prefer to ignore: AI costs a fortune before it brings in a single cent.
📊 Our take
We’re clearly on the skeptics’ side on this one. Goldman is simply formalizing what we’ve been observing for months: spending is skyrocketing, while AI revenue remains unclear.
S&P 500 companies are promising the moon with generative AI, but for now, they’re mostly just spending. Data centers don’t generate immediate cash flow. Nvidia chips cost a fortune to deploy. And meanwhile, operating margins are shrinking, quarter after quarter, amid a surprising media silence. Goldman is right to sound the alarm: a slipping ROE opens the door to a sharp correction if AI results are slow to materialize. In Europe, the AMF and regulators are closely monitoring tech stock valuations, aware that the U.S. bubble could spread to European indices. For French traders, exercise caution with long S&P 500 positions until this ROE issue is resolved.
Our base case scenario: increased volatility in S&P 500 tech stocks in the second half of 2026, with sharp profit-taking at the slightest sign of disappointing results. For the French trader: favor value sectors (energy, finance) and remain light on US tech until the return on AI investment is proven with supporting figures.
✅ Key takeaway
- Goldman Sachs analyzes the impact of massive AI spending on the S&P 500’s ROE
- Tech capex is skyrocketing but weighing on margins in the short term
- Risk of a correction if profitability fails to live up to AI promises
- Tech accounts for 40% of the S&P 500 and concentrates structural risk
What do you think? Do you believe tech giants will absorb their AI investments, or do you sense a correction coming?
🔎 See also
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Source: Goldman Sachs, financial press
