The S&P 500's Record Profits Are Hiding a Problem Investors Haven't Seen Before
S&P 500 earnings growth is estimated at 29% for Q3, driven by mega-cap companies. However, concerns arise over the sustainability of earnings due to deferred expenses from AI investments. Companies like Alphabet, Intel, Amazon, and Meta have seen stock declines due to negative free cash flow and high capital expenditure forecasts. Investors are now focusing on ROI from AI spending, with free cash flow being a key metric.
