In this episode of The Glass Half Full, Ryan Detrick, Chief Market Strategist at Carson Group, and Sonu Varghese, Chief Macro Strategist at Carson Group, break down the AI spending wave that is reshaping the economy, driving corporate profits, and fueling one of the strongest months in stock market history.
The Mag 7 delivered 63% year over year earnings growth in Q1, blowing past the 22% estimate that kicked off earnings season. The S&P 500 followed suit, with broad earnings growth nearly doubling from 14% to 27%. April capped it off with a gain of more than 10% for the S&P 500, its second-best April on record, with technology leading the way and posting one of its best months ever.
Sonu breaks down what is driving it all. The team originally projected hyperscalers would spend $515 billion on AI capital expenditures in 2026. After Q1 earnings, that number has been revised to $725 billion, more than $200 billion above the original forecast. The spending is already showing up in the economic data, with IT equipment investment surging at a 43% annualized pace and software investment climbing 23%.
Ryan and Sonu close by addressing the question every investor is quietly asking: Are we in a bubble? The late-1990s comparison is obvious, but Sonu argues that the inflation we are seeing today is actually a signal of healthy demand-driven growth. Supply has not caught up, demand is still accelerating, and the wave, as their 2026 Outlook put it back in January, is still riding.
Key Takeaways
- The Mag 7 delivered 63% year-over-year earnings growth in Q1, while broad S&P 500 earnings growth nearly doubled from 14% to 27%.
- The S&P 500 gained more than 10% in April, its second-best April on record, with technology up roughly 20% on the month.
- Hyperscaler AI capital expenditure estimates for 2026 have been revised from $515 billion to $725 billion, representing approximately 2.3% of US GDP.
- IT equipment investment grew at a 43% annualized pace in Q1 and software investment is running at 23% versus a 9% pre-pandemic baseline.
- Today’s AI-driven inflation suggests demand is still outrunning supply, and overcapacity has not arrived yet, making a bubble scenario premature.
Jump to:
0:00 — Welcome and the AI Wave
0:20 — CapEx Forecasts Get Blown Out
2:35 — Earnings Jump and Tech Leads
4:09 — AI Investment Shows Up in GDP
6:44 — Inflation Signals Demand Running Hot
8:38 — Bubble Risk and the Late ’90s
10:48 — Final Takeaways and Sign Off
Connect with Ryan:
- LinkedIn: Ryan Detrick
- X: @ryandetrick
Connect with Sonu:
- LinkedIn: Sonu Varghese
- X: @sonusvarghese
The views stated in this podcast are not necessarily the opinion of Cetera Wealth Services, LLC, or CWM, LLC. and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
Ryan Detrick and Sonu Varghese are non-registered associates of Cetera Wealth Services LLC.
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