Chris Galipeau, Head Market Strategist at Franklin Templeton Institute, said on July 21 during the Talking Markets podcast that AI capital expenditures are real and ongoing. The top five hyperscalers spent just over $100 billion in CapEx in 2023, a figure projected to exceed $700 billion in 2026, representing roughly a 7x increase in three years. He forecasts that the S&P 500 could achieve over 20% year-over-year earnings growth in Q2 2026. The strategist framed the current investment cycle as being in the early innings, pushing back against analysts questioning whether hyperscalers will see adequate returns on their massive infrastructure bets.
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