AI spending is serving as a macro-level stimulus supporting revenue growth, driving demand, and boosting industrial and infrastructure activity. But there are risks.

Key takeaways:

• As this chart illustrates, U.S. earnings growth has been narrowly concentrated so far in 2026. Just a small group of companies tied to AI—particularly semiconductors and digital platforms—have recently been the primary drivers of U.S. earnings.
• With stocks increasingly reliant on the AI cycle, don’t forget that if financing conditions tighten or AI-related capital spending slows, earnings expectations may downshift. If this becomes tomorrow’s reality, are your clients prepared for the potential fallout?
• If not, consider talking with them about Fundamental Index® strategies. These strategies weight firms based on measures like cash flow, dividends, and sales, breaking the link between stock price and index weight. And they can complement market cap-weighted index strategies, potentially enhancing portfolio diversification.