Atlantic Edge Insights
June 2026
What’s Driving the Market?
Markets have faced real headwinds in 2026, a war in the Middle East, persistent inflation, and tariff-driven uncertainty. But beneath the noise, a force of an entirely different scale is at work. The five largest technology companies plan to spend $690 billion this year building the infrastructure of the AI era, 77% more than 2025. They are on track to reach $1 trillion by 2027. Strategists estimate this single investment cycle will drive roughly 40% of all S&P 500 earnings growth in 2026. The tailwind is bigger than the headlines.
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The spending is already committed. Amazon doesn’t cancel a $200 billion capital budget because oil spikes or a trade war escalates. The contracts are signed, the sites are under construction, the equipment is on order. Unlike consumer spending, this is structural, multi-year, and largely irreversible.
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Follow the money, not the hype. Of the $690 billion, ~$300B flows to semiconductors and compute, ~$110B to power and electrification, ~$45B to construction, and ~$40B to networking. Additionally, the ASCE estimates a $1.9 Trillion grid-upgrade need as more than 70% of US transmission lines are over 25 years old. These companies get paid whether ChatGPT, Claude, or Gemini wins. They sell the shovels, not the gold.
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AI is reshaping S&P 500 earnings. Strategists estimate roughly 40% of index earnings growth in 2026 traces directly back to this buildout. The market’s ability to hold up against today’s headwinds, is largely driven by this theme.
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We’ve constructed portfolio built around this theme. Rather than betting on which AI platform ultimately wins, we focused on the companies building the physical infrastructure the entire industry depends on, power generation, electrical equipment, cooling systems, and data center construction. This approach benefits from the spending cycle regardless of the software outcome, and the revenue driving them today comes from signed contracts and construction backlogs, not speculation.
Sources: Q1 2026 earnings, McKinsey, Goldman Sachs, Archdesk, CreditSights. This material is provided for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Atlantic Edge Private Wealth Management.
Atlantic Edge Insights
Matthew Cochran, CFA
Robert Filosa, CFA
Ethan Caldarelli, CFA
Opinions expressed in this commentary may change as conditions warrant and are for informational purposes only. Information contained herein is not intended to be personal investment advice for any specific person for any particular purpose. We utilize information sources that we believe to be reliable but cannot guarantee the accuracy of those sources. Past performance is no guarantee of future performance; investing involves risk and may result in loss of capital. No graph, chart, formula or other device can, in and of itself, be used to determine which securities to buy or sell, or when to buy or sell such securities, or can assist persons in making those decisions. Consider seeking advice from a professional before implementing any investing strategy.