Chris Galipeau, Franklin Templeton’s head market strategist, shut down doubts about AI capital expenditures, calling the current investment phase the “early innings.” On his recent podcast appearance, Galipeau highlighted that hyperscalers major cloud and tech infrastructure players spent around $100 billion in 2023, a figure expected to explode to more than $700 billion by 2026. That’s a sevenfold jump in just three years, exceeding the GDP of Switzerland.
This massive capital outlay is more than hype. Galipeau argues it’s driving real earnings growth, forecasting a potential 20% year-over-year surge in S&P 500 earnings by Q2 2026. The boost isn’t just from AI hardware sales like Nvidia’s GPUs but also from enterprise and consumer applications benefiting from this investment wave. Bank earnings improving alongside tech investments add fuel to the fire.
Broader implications for markets
Although he didn’t mention cryptocurrencies specifically, Galipeau’s outlook hints at a broader risk-on environment. Historically, strong equity earnings correlate with increased investor confidence, often spilling over into riskier assets including crypto. If AI spending continues accelerating, it could signal a thriving market backdrop across many sectors.
