It’s a superb factor that Nvidia’s This autumn 2025 earnings beat expectations yesterday, as a result of an growing portion of U.S. GDP development is coming from AI capital expenditures (capex) and the “wealth effect” from tech inventory features on shopper spending, in line with a brand new evaluation from Pantheon Macroeconomics.
AI capex “accounted for nearly a fifth of the 2.2% year-over-year increase in headline GDP in Q4,” Pantheon’s Samuel Tombs and Oliver Allen mentioned in a word to shoppers this morning.
As well as, the worth of households’ holdings of Magnificent Seven tech shares elevated by $3.8 trillion in 2025, they estimate. Utilizing historic developments as a information, that enhance in wealth drove a rise in consumption by 0.4 proportion factors in This autumn 2025, including 0.3 factors to GDP development, they mentioned. (The “wealth effect” is the phenomenon that describes how customers have a tendency to extend their spending once they really feel richer resulting from an increase within the worth of their homes or investments.)
All advised, “AI-linked capex and the wealth effect from gains in tech stocks probably accounted for a third of headline GDP growth towards the end of last year,” they mentioned.
“When combined with the direct boost to growth from AI capex, that would leave the economy vulnerable if investors started to doubt the AI story, prompting a big pullback in both stock prices and investment spending.”
Nvidia was up 1.44% yesterday and held up at 0.15% in in a single day buying and selling after spiking sharply 4% after CEO Jensen Huang’s earnings name final night time. The corporate reported record-high income of $68.1 billion, up 73%, for This autumn 2025, $3 billion greater than its earlier steering.
Tech-heavy Nasdaq 100 futures had been flat this morning. S&P 500 futures had been flat additionally, after the index closed up 0.81% yesterday.
Pantheon believes that whereas AI has not but proven up in headline productiveness development, there was “an acceleration in productivity in those sectors where AI adoption currently is highest [like tech companies], offsetting a slowdown elsewhere. Productivity growth in the first group is meaningfully above its pre-pandemic trend,” the analysts mentioned.
As well as, opposite to Citrini’s self-confessed “AI doomer fan-fiction” state of affairs, “For now, AI seems to be making workers in some roles more productive, but it is not yet advanced enough to replace them. We see little evidence to indicate that a big wave of AI-driven layoffs is on the immediate horizon.”
Right here’s a snapshot of the markets this morning previous to the opening bell in New York:
- S&P 500 futures had been flat this morning. The index closed up 0.81% in its final session.
- STOXX Europe 600 had been flat in early buying and selling.
- The U.Okay.’s FTSE 100 was up 0.13% in early buying and selling.
- Japan’s Nikkei 225 was up 0.29%.
- China’s CSI 300 is down 0.19%.
- The South Korea KOSPI was up 3.67%.
- India’s NIFTY 50 was up 0.23%.
- Bitcoin rose to $68K.
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