Earnings Growth Today but at What Cost?

While S&P 500 earnings are expected to grow over 20% for a second consecutive quarter, the growth is concentrated in semiconductor and AI infrastructure companies. However, analysts warn of a 'golden window' that may not last. Hyperscalers (Meta, Microsoft, Alphabet, Amazon, Oracle) are capitalizing expenses as assets, deferring costs through depreciation, creating a $549 billion gap between 2026 capex ($760B) and depreciation ($211B). This accounting timing advantage will eventually reverse, potentially pressuring future margins. Additionally, SK Hynix announced a $29.4 billion US listing, adding to equity supply concerns in an already elevated valuation environment.