+May 17, 20260has the electricity price in us rised in last 2 months or since war began?Yes — electricity prices have risen meaningfully, and the data is now in the official CPI reports. Here's the full picture. The numbers Electricity prices rose 2.8% in April alone on a monthly basis, and are up 6.1% from a year ago. Overall energy costs — electricity, gas, heating oil combined — rose nearly 18% year-over-year. Gasoline is up 28.4% from a year ago. Fox Business The average price of a gallon of gasoline in the US is now $4.50 as of May 12, with prices higher still in states like California, Ohio, and Arizona. Al Jazeera Higher energy costs accounted for 40% of the total jump in April's CPI inflation reading of 3.8% — the fastest annual pace since May 2023. Americans have collectively spent an additional $28 billion on gas since March 1, of which an estimated $22 billion stems directly from the Iran war. CBS News Why electricity specifically is rising — the natural gas link Approximately 40% of US electricity is generated by natural gas power plants. Because of the war, Qatar shut down production at the world's largest LNG facility, and LNG shipments have been unable to move through the Strait of Hormuz — raising global gas prices, which feeds directly into US electricity generation costs. Committee on Oversight and Accountability Democrats European and Asian natural gas prices have doubled. The US impact has been more muted because domestic gas supply and demand matters more than global LNG prices here — but the linkage is tightening as US LNG exports grow, connecting domestic prices increasingly to the global market. Chatham House The data center angle — confirmed Goldman Sachs analysts have specifically flagged that increased electricity demand from the data center boom is expected to boost inflation over the next two years — meaning the Mag 7's own infrastructure buildout is itself a source of electricity price pressure, on top of the war-driven shock. They are simultaneously the victim of rising electricity costs and a contributing cause of rising electricity demand. CBS News The broader consequence The inflation data has likely pushed any Fed rate cut to December at the earliest, with risks rising it won't occur until 2027. For millions of workers, the spike means inflation is now outpacing wage growth — squeezing real purchasing power at exactly the moment consumer spending needs to hold up to deliver the 20%+ earnings growth the market is pricing in. Fox BusinessCBS News This is the transmission mechanism completing itself in real time. Oil shock → electricity prices → consumer squeeze → margin pressure → earnings miss risk. The Q1 numbers looked great because they preceded the worst of it. Q2 is where this starts showing up in actual corporate results.
+May 17, 20260valuation multiples are essentially inverse discount rates — when the "safe" return goes up, the premium you pay for risky future earnings should compress. explain why?Start with a concrete analogy, then build up to the math. The sandwich shop analogy Imagine a sandwich shop earns $1 profit per sandwich. You're considering buying the entire business for $20 — that's a 20x PE multiple. Your implied return is 1/20 = 5% per year. Now imagine the government suddenly offers you a guaranteed 5% bond — zero risk, zero effort. Why would you pay $20 for a risky business when you can get the same 5% return by doing nothing? You wouldn't — unless the business gets cheaper. For the stock to be worth buying, the price has to fall, say to $14, so your implied return rises to 7% — enough above the risk-free 5% to compensate you for the risk of owning a business. That gap between what a risky asset must return and what a safe asset returns is called the "equity risk premium." When the safe rate rises, the whole structure shifts upward — and multiples must compress to keep that premium intact. The actual math The formal version of this is the Gordon Growth Model. The fair value of any asset that produces earnings is: Price = Earnings ÷ (Discount Rate − Growth Rate) Rearranged: PE = 1 ÷ (Discount Rate − Growth Rate) You can see immediately that PE is literally the inverse of the spread between your discount rate and growth. When the discount rate goes up and growth stays the same, the denominator gets bigger — and PE must shrink.
+May 17, 20260what needs to happen to deliver on that growth rate?Good question to stress-test. The 20%+ annual earnings growth target rests on several simultaneous conditions — and each one has a real risk attached to it right now. 1. Margins have to hold or expand further The S&P 500's net profit margin is already at a record 13.4% — the highest since FactSet began tracking in 2009. Analysts are projecting further expansion to 14.1% in Q2 and 14.6% in Q3 and Q4. XTB That's asking margins to keep breaking records every single quarter through year-end — in an environment of $100+ oil, elevated freight costs, and persistent wage pressure. Margins expand when revenue grows faster than costs. Right now costs are accelerating. For margins to keep rising, companies would need extraordinary pricing power or continued productivity gains from AI — neither of which is guaranteed. 2. Revenue has to keep growing at 9-10% Earnings growth has two levers: margins and revenue. If margins are under pressure, revenue has to do more of the work. All eleven sectors are currently reporting year-over-year revenue growth, led by Information Technology, Communication Services, Financials, and Real Estate. Sustaining that requires consumers and businesses to keep spending at current rates despite higher fuel costs eating into their budgets — which historically they don't for long. FactSet 3. The Magnificent 7 have to keep dramatically outperforming The Magnificent 7 are expected to grow earnings 22.7% for full-year 2026, while the other 493 companies are only expected to grow at 12.5%. The index-level target depends heavily on the top handful continuing to compound at nearly twice the rate of the rest. Any stumble from Nvidia, Microsoft, Alphabet, or Meta pulls the whole number down significantly. FactSet 4. AI capital spending has to translate into revenue — fast This is the most load-bearing assumption. The Mag 7 are spending hundreds of billions collectively on AI infrastructure. That spending is currently showing up as cost, not revenue. For earnings to keep growing at 20%+, that investment needs to start generating real returns — either through their own AI products or through their cloud customers monetizing AI effectively. The window for the market's patience on this is probably 2-3 more quarters. 5. The oil shock has to resolve or stay contained The ISM manufacturing prices index hit 84.6 in April — its highest since April 2022 — reflecting tariff and energy cost pressures simultaneously. If Brent crude stays above $100 through Q2 and Q3, it becomes mathematically very hard for industrial, consumer, and logistics-heavy companies to hit their earnings targets. Energy costs compound — they hit input costs, they hit freight, they hit consumer discretionary spending all at once. Crestwood Advisors 6. The Fed cannot raise rates Markets have already repriced to just one rate cut expected in 2026, down from multiple cuts anticipated earlier in the year. If oil-driven inflation forces the Fed to actually hike rather than cut, the discount rate in the valuation formula moves the wrong direction — compressing multiples at exactly the moment earnings are disappointing. That double-hit is the scenario that produces the 30-50% crash Niles was describing. Intellectia.AI The honest summary Each of these conditions is plausible individually. The problem is the market needs most of them to come true simultaneously, in the same quarters, against a macro backdrop that is actively working against several of them. That's not impossible — but it's a very narrow path, and it's essentially the entire justification for why stocks are where they are.
+May 17, 20260how much higher earnings market is demanding right now? and how is the sectorwise split of earnings currently in s&p 500Two questions — let me answer both clearly. First: how much earnings growth is the market actually demanding? Using the discount rate framework from before: with 10-year yields at 4.6%, an equity risk premium of ~3%, and long-run growth of 5%, the model implies a fair PE of roughly 14-15x. The market is trading at 29x trailing and 21x forward. To justify 21x forward at current rates, you need the "growth" input in the formula to be dramatically higher — roughly 5-6% higher than historical norms, sustained indefinitely. That's precisely what the AI productivity thesis is promising. In plain terms: the market is betting that earnings compound at 18-21% annually for the next several years, not the historical 5-7%. That's the implied demand baked into the price. For the rest of 2026, analysts are calling for earnings growth of 21% in Q2, 23% in Q3, and 21% in Q4 — full-year 2026 earnings growth of about 21%. The market needs all of that to land, plus continued growth into 2027, for current multiples to make mathematical sense. FactSet Now the sector picture:
+May 17, 20260ISM manufacturing prices index hit 84.6 what does this actually mean?Tell me more about this one time benefit that companies recieved in q1 2026, and how much that factored into earnings growth, what will be earnings growth without those one time benefitsHow does higher oil prices actually affect margins of us companies, why does it affect less than in 1973 ? which companies show the effects first? Does higher oil prices affect data center running costs for mag 7?Three good questions. Let me take them one at a time. 1. What does ISM Manufacturing Prices Index of 84.6 actually mean? The ISM (Institute for Supply Management) surveys purchasing managers at manufacturing companies every month and asks one simple question: are the prices you're paying for inputs higher, lower, or the same as last month? The index is scored 0–100. The key thresholds are: 50 = prices unchanged from last month Above 50 = prices rising Below 50 = prices falling Above 70 = prices rising rapidly — historically associated with inflationary pressure So 84.6 means the vast majority of purchasing managers reported paying significantly more for their inputs than the month before. It's not measuring the absolute price level — it's measuring the rate of change. An 84.6 reading is close to the upper extreme of the range. For context, it hit similar levels in 2021-22 during the post-COVID supply chain crisis, which preceded the worst inflation in 40 years. What makes it particularly alarming right now is the source — it's oil and tariffs hitting simultaneously, which means both energy inputs and imported components are getting more expensive at the same time. Manufacturers feel this first, but it ripples into everything they make within 1-2 quarters. 2. The one-time benefits — and what earnings growth looks like without them
+May 17, 20260why the current higher gas prices are not showing in stock market ?This is actually a really important question, and the honest answer is: it is starting to show — just with a lag. Here's why the lag exists and what's changing right now. First, the scale of the oil shock Oil prices have surged more than 50% since a U.S.-Iran conflict began on February 28, driven by disruptions to the Strait of Hormuz. Brent crude is currently trading around $107-108 per barrel. That's a significant shock by any historical measure. CNBCCNBC So why hasn't the stock market crashed? There are several reasons, and they interact: 1. Q1 earnings were reported before the oil shock hit fully The strong Q1 earnings we discussed were largely locked in before energy costs had time to seep into margins. An analyst at Energy Aspects put it bluntly: "They are not going to be great nearly to the same extent in Q2." The stock market was celebrating backward-looking results while a forward-looking cost problem was building underneath. CNBC 2. Markets initially bet on a quick resolution The market narrative through April was that the Iran conflict was de-escalating. A ceasefire was announced on April 7-8, and Iran's foreign minister declared the Strait of Hormuz open on April 17, prompting an 11% one-day decline in oil prices. Within ten days, however, the diplomatic picture had reversed. Markets priced in the good news but not the reversal. Crestwood Advisors 3. The economy is less oil-sensitive than it used to be The oil intensity of U.S. GDP has declined by more than 50% since 1973 — meaning an identical oil price shock today produces a meaningfully smaller drag on GDP than it would have produced fifty years ago. So the market isn't wrong to discount the oil shock somewhat — the U.S. economy genuinely handles high oil better than it once did. Crestwood Advisors 4. Tech and AI are dominating the index and don't use much oil The S&P 500 is heavily weighted toward software, cloud, and semiconductor companies whose direct energy costs are relatively low. A $100+ oil price barely dents Alphabet or Meta's margins. It devastates airlines, chemicals, and logistics — but those sectors have smaller index weights. But here's what's changing — cracks are appearing Just yesterday, global bond markets tumbled sharply, with US 10-year yields rising 12 basis points to 4.6% — the biggest weekly jump since Trump's tariffs roiled markets in April 2025 — as fears grow that the oil-driven inflation will force central banks to raise rates. Yahoo Finance Stocks fell Friday, with the S&P 500 shedding 1.24% to end at 7,408. CNBC The ISM manufacturing prices index reached 84.6 in April, its highest level since April 2022, reflecting tariff and energy cost pressures. Meanwhile, the IEA is projecting a Q2 2026 global oil demand contraction of roughly 1.5 million barrels per day — the sharpest decline since COVID — as demand destruction begins in Asia. Crestwood Advisors The bottom line The oil shock is transmitting into the economy — through inflation, through bond yields, and now increasingly through stock prices. But it works with a 3-6 month lag: first oil rises, then consumer prices rise, then margins compress, then earnings disappoint, then stocks reprice. We are somewhere in the middle of that sequence right now. Some analysts are warning that markets are "sleepwalking" into a recession by dismissing the energy shock as temporary — which is almost exactly the disconnect Niles was describing in the podcast. CNBC
+May 17, 20260What needs to happen for current market levels to make senseGood question to ask separately, because it forces the argument to be precise rather than just vibes-based. Here's what the math actually demands. The Starting Point The S&P 500's trailing PE is around 29, against a long-run historical average of roughly 19.7. The Shiller CAPE — which smooths earnings over 10 years to remove cyclical distortion — sits at about 39.6 for May 2026, one of the highest readings in modern history outside of 1999-2000. The forward PE, using estimated future earnings, is around 21. Zacks + 3 That gap between trailing (~29) and forward (~21) is itself a signal: the market is essentially betting hard on an earnings surge. For that bet to pay off, several things need to go right simultaneously. Condition 1: Earnings growth has to actually land at ~12%+ for multiple years Goldman Sachs projects EPS growth of 12% in 2026 and 10% in 2027. That's not outlandish by itself, but it needs to hold up in an environment of elevated oil prices, elevated bond yields, and potential tariff drag — all of which compress margins. If earnings disappoint even modestly, the forward PE re-rates back toward the trailing PE, and prices fall to compensate. Goldman Sachs Condition 2: "Higher for longer" rates have to be survivable At a 21x forward PE, you're paying $21 for every $1 of expected earnings. The risk-free rate (10-year Treasury) is currently well above 4%. That matters because valuation multiples are essentially inverse discount rates — when the "safe" return goes up, the premium you pay for risky future earnings should compress. For a 21x multiple to hold, the market needs to believe either that rates will fall meaningfully, or that earnings growth is so reliable that the premium is still justified. Right now, it's betting on both. Condition 3: AI has to deliver actual productivity gains — at scale, soon This is the biggest wild card. The bull case embedded in current prices isn't just that AI companies make money — it's that AI raises the productivity ceiling of the entire economy, justifying both higher earnings and higher multiples across most sectors. That's a very large assumption. Technology historically does deliver productivity gains, but with long and variable lags (the internet's productivity boom didn't show up clearly until the mid-2000s, a decade after the infrastructure was built). Condition 4: No recession This sounds obvious but it's load-bearing. Goldman cites healthy economic and revenue growth as foundational to its bull case. A recession wouldn't just cut earnings — it would compress the multiple at the same time, creating a double hit. At current valuations, even a mild recession could produce the 30-40% drawdown Niles describes, simply through the mechanical math of earnings falling while PE normalizes. Goldman Sachs Condition 5: Concentration has to remain a feature, not a bug A significant portion of S&P 500 returns are driven by a handful of mega-cap names. For the index to hold up, those companies need to keep growing into their valuations. If even one or two of them disappoint — on earnings, regulation, or competitive disruption — the index-level math deteriorates quickly. The honest summary Current market levels aren't insane if you believe in a specific scenario: no recession, sustained double-digit earnings growth, AI productivity materializing within 2-3 years, and rates drifting lower. That scenario is possible. But it requires nearly everything to go right. The market isn't pricing in risk — it's pricing in a best case. That's not the same as the market being wrong; it just means the margin for error is very thin.
+May 17, 20260but market is forward looking right? everyone knows that oil is going higher which will compress margins, lead to inflation but it still not showing in stock prices, why?Exactly the right tension to probe. There are six reasons markets can "know" something and still not price it in. 1. The market doesn't know how long the shock lasts — and duration is everything The market isn't ignoring the oil shock. It's making a probability-weighted bet that it resolves. The market's April rally embedded a meaningful assumption that the Iran conflict would resolve relatively quickly and that energy prices would normalize. If oil is at $105 for three months and then falls back to $75, the earnings damage is manageable — maybe one bad quarter. If it stays above $100 for 12-18 months, it's a different story entirely. The market is pricing the former scenario. The bears think the latter is more likely. Neither side knows for certain, and until there's resolution, stocks stay elevated because enough investors believe the disruption is temporary. Crestwood Advisors 2. There is no better alternative for large pools of capital This is the most underappreciated reason. Institutional investors — pension funds, sovereign wealth funds, insurance companies — have trillions of dollars that must be deployed somewhere. Bond markets are selling off, with 10-year yields at 4.6% and rising. Real estate is illiquid. Cash earns less than inflation in real terms. Commodities are volatile. So even expensive equities remain the least-bad option for capital that cannot sit idle. The money doesn't leave the market just because it sees risks — it stays until there is somewhere better to go. This is sometimes called TINA — "There Is No Alternative" — and it keeps floors under equity prices even when fundamentals deteriorate. Yahoo Finance 3. Positioning and momentum are self-reinforcing in the short term Investor sentiment remains very optimistic overall, but a peek under the hood shows the broader market is lagging the largest tech companies — a divergence that is increasingly worrying some investors as it suggests a fragile rally. When a market is being held up by momentum in a handful of large stocks, fund managers who are underweight those stocks underperform their benchmarks. That forces them to buy — not because they think the stocks are cheap, but because not owning them is a career risk. This creates buying pressure entirely disconnected from fundamental analysis. CNBC 4. Corporate earnings have not yet confirmed the damage Markets reprice aggressively when earnings actually disappoint — not when analysts expect them to disappoint. Of the 211 S&P 500 companies that cited "Middle East" on their Q1 earnings calls, only a small number actually lowered EPS guidance for 2026. Until companies formally cut guidance, portfolio managers can argue the damage is speculative. The moment Q2 earnings start coming in below expectations — which probably happens in July — the market will have concrete evidence rather than forecasts. That's typically when repricing accelerates. FactSet 5. The AI narrative is acting as a counterweight The market is simultaneously holding two thoughts: oil is inflationary and bad for margins, but AI is deflationary and good for productivity. The second belief is partially offsetting the first in investors' minds. If AI genuinely delivers productivity gains — meaning companies can produce more output with fewer people and lower costs — it could compress margins less than historical oil shocks would predict. This isn't irrational. It's a genuine uncertainty about which force dominates. The market is currently betting AI wins. That bet may prove correct or incorrect, but it explains why the traditional oil-shock playbook isn't being followed mechanically. 6. The lag means the pain is still ahead — not behind Energy Aspects' Amrita Sen captured this precisely: "This has been the biggest conundrum for us — if anything, we think oil should be higher and the equity market should be a lot, lot weaker. They are not going to be great nearly to the same extent in Q2." CNBC Markets are forward-looking but they discount probabilities, not certainties. The sequence that has to happen — oil stays high → Q2 margins compress → companies cut guidance → earnings estimates fall → multiples compress — takes 3-6 months to fully play out. The market can see the chain coming but bets on each link breaking until it doesn't. The honest summary Markets being "forward looking" doesn't mean they price in every risk immediately. It means they incorporate probability-weighted expectations about the future. Right now the market is assigning a high probability to: the war resolving, the Fed not hiking, AI saving margins, and the consumer staying resilient. If any two of those assumptions prove wrong simultaneously, the repricing can be sudden and severe — because the market won't gradually drift down, it will gap down when the narrative breaks. That's what Niles means when he says "be nimble." The risk isn't that the market doesn't know about the oil shock. The risk is that it's one catalyst away from deciding its assumptions were wrong — and markets move much faster in that direction than they did getting to these levels.
+May 17, 20260How are current earnings?Surprisingly strong — and this is actually the most important context for understanding why the market is where it is. The headline numbers With 91% of S&P 500 companies having reported, Q1 2026 earnings growth came in at 27.7% year-over-year — well above the 13% analysts expected at the start of the quarter, and the highest growth rate since Q4 2021. FactSet The beat rate is equally striking: companies are reporting earnings 20.7% above estimates on average, the highest surprise percentage since Q1 2021. 84% of S&P 500 companies beat expectations, above both the 5-year average of 78% and the 10-year average of 76%. FactSet Who's driving it The three biggest contributors to the upside were Alphabet, Amazon, and Meta Platforms — three of the "Magnificent 7." So it's not broad-based; it's concentrated at the top, which reinforces the concentration risk Niles flagged. FactSet What's expected ahead For the rest of 2026, analysts are projecting earnings growth of roughly 20% in Q2, 22% in Q3, and 20% in Q4 — implying full-year 2026 earnings growth of around 18.6%. FactSet What this means for the valuation debate This is where it gets interesting. The Q1 numbers are genuinely good — not manufactured or flattered by accounting tricks. That partially justifies the elevated PE. But three caveats matter: First, 27.7% growth driven heavily by three mega-caps means the average S&P 500 company is doing much less work. Strip out the Mag 7 and the picture is more modest. Second, the forward estimates of 20%+ growth for the rest of the year are now the baseline — meaning the market has already priced them in. Any disappointment is punished harder than it would be in a low-expectation environment. Third, forward PE has already compressed from above 22x at year-end to around 20x — meaning earnings are growing into the valuation somewhat. That's actually the healthy scenario: earnings rising faster than prices, gradually making the market cheaper. If that continues, the bear case weakens. NYSE Bottom line: Earnings right now are strong enough to give the bulls a legitimate argument. The question Niles is really asking isn't whether earnings are good today — it's whether they can stay this good once AI capital spending starts demanding returns and the macro headwinds (oil, yields) fully seep through. So far the answer has been yes. The next 2-3 quarters will be the real test.
+May 17, 20260Bond markets are selling off, with 10-year yields at 4.6% and rising. what does this mean?Great question to nail down because it comes up constantly and the language is genuinely confusing. The core confusion: price and yield move in opposite directions When people say "bonds are selling off" they mean bond prices are falling. But the number everyone quotes is the yield, which rises when prices fall. These two things are mathematically locked together, and understanding why unlocks almost everything about how interest rates affect markets. Here's the mechanism in one simple example: Imagine the US government issues a bond for $1,000 that pays $46 per year in interest — that's a 4.6% yield. Now imagine inflation spikes and investors get nervous. They start selling that bond. As more people sell, the price drops — say to $900. But the bond still pays $46 per year in fixed cash. Now the yield is $46 ÷ $900 = 5.1%. The payment didn't change. The price fell, so the yield rose automatically. That's it. That's the entire relationship. Price down = yield up. Price up = yield down. Always, mechanically, by definition. So what does "bond market selling off" actually mean in plain English? It means investors are demanding more compensation to lend money to the US government. They're saying: given inflation risks, given oil prices, given uncertainty — we won't hold your bonds unless you effectively pay us more. Since the coupon is fixed, the only way yield rises is if the price we pay falls. Why are bonds selling off right now? Government bond markets tumbled around the world as fears grew that the war-driven oil price shock will force central banks to raise interest rates to contain inflation. The rout was led by longer-dated bonds — the 30-year Treasuries — which are most vulnerable to accelerating inflation, sending 30-year US Treasury yields to the cusp of their 2023 peak. US 10-year yields rose 12 basis points to 4.6% in a single week — the biggest weekly jump since Trump's tariffs roiled markets in April 2025. Yahoo Finance Three forces are driving it simultaneously right now: Inflation is running at 3.8% annually and rising — economists expect it to surpass 4% in May. When you hold a bond yielding 4.6% and inflation is 3.8%, your real return is only 0.8%. If inflation keeps rising, that real return goes negative — you're losing purchasing power by owning the bond. So you sell. CBS News The Fed is now expected to hold rates through most of 2026, with rate cuts pushed to December at earliest. Higher rates for longer means newly issued bonds will pay more — making your existing lower-yielding bonds worth less by comparison. Fox Business And the scale of US government borrowing is itself a concern. When the government runs large deficits it has to issue enormous quantities of new bonds constantly. More supply of bonds → lower prices → higher yields, all else equal. Why does this matter for stocks — connecting it back to our earlier discussion Remember the PE ratio formula: PE = 1 ÷ (risk-free rate + equity risk premium − growth). The 10-year Treasury yield is the risk-free rate in that formula. When it goes from 1.5% in 2021 to 4.6% today, the denominator of that formula expands dramatically — mechanically compressing the fair value multiple for stocks. Bloomberg strategists put it directly: "Any further rise at the long-end of the bond curve threatens to worsen valuation jitters and unsettle a rally increasingly driven by long-duration equities." Yahoo Finance "Long-duration equities" is the key phrase. Tech stocks — particularly AI and software companies — derive most of their value from earnings expected far in the future. A dollar of earnings in 10 years is worth much less when discounted at 4.6% than at 1.5%. So rising yields hit expensive growth stocks hardest, which is precisely why Nvidia, AMD, and Intel all dropped sharply on Friday when yields spiked. The simple mental model to remember Think of the 10-year yield as gravity for stock prices. When gravity is weak (low rates), asset prices float high easily. When gravity strengthens (high rates), everything gets pulled back toward earth. The market has been floating at high altitudes for two years, assuming gravity stays weak. Yields rising to 4.6% — and potentially higher if oil keeps inflation elevated — means gravity is getting stronger. The question is whether earnings growth is a powerful enough engine to keep altitude against that pull.
+May 17, 20260what was blended s&p 500 earnings growth in q1 2026?The blended year-over-year earnings growth rate for the S&P 500 in Q1 2026 was 27.7% — the highest earnings growth rate reported by the index since Q4 2021. FactSet That number came in dramatically above expectations. At the end of Q1 (March 31), analysts were only estimating 13% growth — so the actual result was roughly double what was forecast going in. FactSet The outsized surprise was driven primarily by three companies: Alphabet, Amazon, and Meta Platforms were the largest contributors to the increase in the overall earnings growth rate. As noted earlier, Alphabet's number was inflated by a large one-time gain on equity securities, so the underlying "clean" growth rate is somewhat lower than 27.7% — probably closer to the 13-15% range that analysts originally expected, which is still solid but far less dramatic. FactSet
+May 17, 20260has this been pattern historically ?Yes, very much so — and the historical pattern is remarkably consistent, though with an important nuance. Here's what five decades of data actually show.
+May 17, 20260and what growth rate is expected?For the rest of 2026, analysts are projecting earnings growth of roughly 20% in Q2, 23% in Q3, and 21% in Q4 — with full-year 2026 earnings growth expected at around 21%. FactSet That's a significant step-up from where expectations started the year. At the start of 2026, analysts were forecasting full-year EPS growth of around 13% — that estimate has since been revised up to 18-21% as Q1 results came in stronger than expected. NYSE Two things are worth flagging about these forward estimates though. First, they are almost certainly too optimistic in their current form. Analyst estimates are structurally biased upward — companies and analysts both prefer to set a bar they can beat. The actual growth rate historically comes in a few percentage points below the estimate made at the start of a quarter. Second, and more importantly, these estimates were largely formed before the full impact of $100+ oil prices had time to work through corporate cost structures. Of the 211 S&P 500 companies that cited "Middle East" on their Q1 earnings calls, only a small number actually lowered their EPS guidance for 2026 — suggesting most companies are either hoping for a quick resolution, or haven't yet quantified the damage. Q2 guidance will be the first real test of how badly energy costs are squeezing margins across the economy. FactSet So the market is essentially priced for 20%+ earnings growth to land on schedule, in an environment where the inputs to that growth — stable energy costs, resilient consumer spending, continued AI investment — are all under pressure simultaneously.
+May 16, 20260https://www.youtube.com/watch?v=TCeXwFWmv1U&feature=youtu.be verify facts in this video and are there any opposing views podcasts?The search didn't identify the specific video. Let me try a more targeted search to identify what this video is about.Great, I now have enough to give you a thorough breakdown. The video is a recent interview with Ed Zitron — tech critic, PR CEO, newsletter author (Where's Your Ed At), and host of the Better Offline podcast — titled "You are being lied to about the AI data center boom." Here's a fact-check of his key claims and the best opposing voices:🔍 Ed Zitron's Core Claims — Fact CheckClaim 1: Most announced data centers haven't been built, and many are far behind schedule✅ Largely supported. As of April 2026, almost half of U.S. data centers planned for this year are expected to be delayed or canceled, with shortages of transformers, switchgear, and batteries among the primary causes. A separate analysis found that almost 40% of projects due this year are at risk of falling behind schedule by more than three months, including projects tied to Microsoft and OpenAI. Only a third of the 12 gigawatts of data center capacity planned for 2026 is currently under construction, according to Sightline Climate. This corroborates Zitron's skepticism about paper announcements vs. operational reality.Claim 2: Nvidia is warehousing huge numbers of Blackwell GPUs — possibly a million or more⚠️ Plausible but unconfirmed. Zitron believes that the number of data centers he could confirm as operational indicates that as much as 75% — roughly two million — of units actually sold are awaiting deployment and "gathering dust," unable to generate revenue. Crucially, Bloomberg reported that the vast majority of a Chinese company's (Megaspeed's) $2.4 billion worth of Bianca boards — the circuit boards housing Nvidia's top-end GPUs — were unaccounted for at the sites Nvidia described to Washington. After Bloomberg asked about those products, Nvidia confirmed the boards are in separate warehouses, but declined to specify the number in storage or when they would be deployed. Nvidia's own defense was that "building data centers is a complex process that takes many months and involves many suppliers, contractors and approvals."Claim 3: Nvidia double-counted GPUs (counting dual-core chips as two units)✅ Confirmed. Nvidia courted controversy by claiming it had shipped 6 million GPUs after Blackwell came out by counting each of the two cores separately, meaning the actual unit count was closer to 3 million.Claim 4: AI revenue can't justify the massive CapEx — "no fundamentals to fall back on"⚠️ Contested but the gap is real. Zitron calculates that to support the estimated $800 billion in GPU sales Nvidia claims will come through by end of 2027, there needs to be 39.6GW of new data centers constructed, and around $383 billion in annual AI compute demand — for an industry that, even with OpenAI and Anthropic's spend, doesn't even reach $70 billion in annual demand. Meanwhile, the five largest US cloud and AI infrastructure providers have collectively committed to spending between $660 billion and $690 billion on capital expenditure in 2026, nearly doubling 2025 levels. Amazon's CEO Andy Jassy, however, defended the plan by noting that AI capacity is being monetized as quickly as it is installed and that AWS reached a $142 billion annualized revenue run rate with growth accelerating to 24% year-over-year, a three-year high.Claim 5: Hyperscaler "AI revenues" are circular — Big Tech funding AI startups that spend money back on Big Tech cloud⚠️ Directionally accurate, widely acknowledged. Nvidia's GPUs are valuable because they're scarce — and by trading them directly into an ever-inflating data center scheme, Nvidia is making sure they stay that way, as TechCrunch put it. The circular nature of the deals (Nvidia investing in OpenAI with GPUs, OpenAI spending those back on cloud, etc.) is widely noted — though bulls argue it reflects genuine demand, not fraud.Claim 6: The bubble could pop in 2026, becoming a 2026 midterms issue🔮 Opinion / prediction. Zitron predicted the data center bubble could begin to pop this year, with collapses spreading over months or years, arriving in time to become a defining issue in the 2026 midterms, saying "if they think people hated bankers, people hate data centers." This is a forecast, not a verifiable fact — though the political resistance to data centers is documented.🎙️ Opposing Views — Bullish Podcasts & PerspectivesHere are podcasts and sources that push back with a pro-AI infrastructure view:1. Thoughts on the Market (Morgan Stanley) Morgan Stanley's Stephen Byrd argues the bullishness on AI will get more bullish over coming months, that model capabilities are advancing faster than corporate adoption can keep up, and that the revenue inflection will likely materialize in 2026. Available on Apple Podcasts.2. The AI Investor Podcast (24/7 Wall St.) Hosts Eric Bleeker and Austin Smith discuss how AI technology is flowing through the global economy and identify investment opportunities, covering what to expect from Nvidia and breaking down the battle between OpenAI and Google. Bullish, investment-focused take.3. KKR's "Beyond the Bubble" perspective KKR argues that past tech infrastructure hype cycles — fiber, electrification — suggest the data centers being built are unlikely to go to waste. Instead, these hard assets will form the backbone of a new economy. Their view: bubbles always hurt some investors, but the capacity they create endures.4. Goldman Sachs AI CapEx Analysis Goldman Sachs projects $765 billion in annual AI CapEx in 2026, growing to $1.6 trillion in annual CapEx in 2031, with a cumulative $7.6 trillion between 2026 and 2031 — framing this as a structural shift, not a bubble.⚖️ Bottom Line Zitron's most verifiable claims (GPU double-counting, data center delays, construction vs. announcement gap) are backed by credible reporting. His broader bubble thesis — that there are no fundamentals — is genuinely contested. The bull case rests on the bet that AI demand will grow into the infrastructure being built, much like the internet grew into 1990s fiber. The bear case is that this time, unlike the internet, real revenues still lag the spending by an enormous and widening margin. Both sides are worth tracking.