The S&P 500's Record Profits Are Hiding a Problem Investors Haven't Seen Before

While S&P 500 companies report record earnings driven by AI investments, an accounting issue masks future problems. Tech companies recognize revenue immediately from massive capital expenditures but depreciate costs over years, creating a timing mismatch. As free cash flow turns negative and capex spending continues to balloon, investors face elevated risk when earnings growth slows while expenses accelerate in 2027 and beyond.