Key Numbers
- 12% — Quarter‑over‑quarter AI‑related capital expenditure rise in US technology firms (Analyst view — HSBC, May 2026)
- 8% — YoY earnings growth for US Communication Services driven by AI productivity gains (Analyst view — HSBC, May 2026)
- 3.5% — Share of global equity inflows shifting to AI‑focused stocks since the start of 2026 (Analyst view — HSBC, May 2026)
Bottom Line
AI‑centric capex is accelerating earnings growth in US tech and communications. Investors should tilt toward AI‑enabled leaders and trim exposure to lagging sectors.
HSBC reports AI‑related capex up 12% and earnings climbing 8% in US tech as of May 2026. The surge signals a sector rotation that rewards AI leaders and penalizes non‑AI exposure.
Why This Matters to You
If you own broad US equity ETFs, the AI wave could lift returns by 2‑3% versus the market average. Conversely, holding lagging sectors like traditional energy may erode performance as capital chases AI‑driven growth.
AI Capex Spurs Earnings Upside
AI‑related spending jumped 12% quarter‑over‑quarter, the fastest pace since 2019 (Analyst view — HSBC, May 2026). This spending translates into an 8% YoY earnings boost for US technology firms, outpacing the broader market’s 4% gain.
Higher productivity from machine‑learning models shaved cost bases and unlocked new revenue streams, reinforcing the earnings tailwind.
Sector Rotation Accelerates Into AI Leaders
Since January 2026, 3.5% of global equity inflows have reallocated toward AI‑focused stocks, a shift double the rate of the previous year (Analyst view — HSBC, May 2026). The rotation is most evident in communications services, where AI‑driven ad‑tech and network optimization lifted profit margins.
Investors are trimming exposure to cyclicals and reallocating to firms that integrate generative AI into product pipelines.
What to Watch
- Watch NVDA earnings release June 28 2026 — a beat could accelerate AI‑related inflows (this week)
- U.S. Technology sector index performance (NASDAQ‑100) through July 2026 — sustained outperformance may trigger further rotation (next month)
- HSBC’s AI capex survey update September 2026 — a higher-than‑expected rise could widen the earnings gap (Q3 2026)
| Bull Case | Bear Case |
|---|---|
| AI‑driven earnings outpace inflation, pushing tech valuations higher. | AI spending stalls, causing earnings to revert to sector averages. |
Are you ready to reweight your holdings toward AI‑enabled leaders before the rotation fully materializes?
Key Terms
- Capex (capital expenditure) — Money a company spends to buy, maintain, or improve its fixed assets.
- YoY (year‑over‑year) — Comparison of a metric to the same period in the previous year.
- Sector rotation — The movement of investor money from one industry group to another, often chasing higher returns.
