AI infrastructure names are projected to deliver ~50% of $SPX earnings growth in 2026. But here's the setup: by 2027, that contribution likely fades as hyperscaler capex peaks and datacenter buildout matures. Depreciation then starts eating into margins.
This is classic cycle behavior. Infrastructure spending front-loads growth, then rolls over as assets depreciate and incremental returns decline. The stocks pricing in perpetual 40%+ growth may be in for a reset.
Watch capex guidance from the hyperscalers closely. When they start talking about "optimization" or "moderation," the infrastructure trade gets crowded fast. Valuation matters again when the growth story slows.
This is classic cycle behavior. Infrastructure spending front-loads growth, then rolls over as assets depreciate and incremental returns decline. The stocks pricing in perpetual 40%+ growth may be in for a reset.
Watch capex guidance from the hyperscalers closely. When they start talking about "optimization" or "moderation," the infrastructure trade gets crowded fast. Valuation matters again when the growth story slows.
