Yardeni Research S&P 500 2028 earnings forecast gap AI investment constraints, Digi Mart USA News: Yardeni Research says consensus S&P 500 operating earnings per share estimates for 2028 are too optimistic, with analysts at $495 against the firm’s $450 forecast. In its November 9 note, the firm said the gap reflects estimates that have not yet accounted for financial, political and physical constraints on artificial intelligence (AI) investment.
For 2027, consensus stands at $426 versus the firm’s $425 forecast. Yardeni Research noted that analysts do not appear to anticipate a complete halt to AI infrastructure development, as consensus earnings forecasts continue rising.
“We suspect there is some irrational exuberance in earnings estimates, as they don’t even reflect the speed bumps,” the note said.
The firm noted that semiconductors account for approximately 20% of S&P 500 forward earnings and does not expect EPS to reach $500 until 2030. It identified three intensifying constraints: financial, political and physical.
It expects financing to become more expensive as investors demand clearer returns on hyperscalers’ commitments.
Political opposition could require data center developers to fund grid upgrades, protect local resources and deliver greater community benefits. Power shortages, electricity-grid connection delays and equipment bottlenecks could also delay projects and extend the wait for positive free cash flow.
Even so, the firm expects the boom to continue as demand for computing power rises. It cited Anthropic’s disclosure that customers generating at least $100,000 in annual revenue increased from more than 950 to over 11,900 within a year.
Yardeni Research also expects increasingly autonomous AI agents to perform complex tasks and unleash another wave of computing demand while delivering productivity gains.
Stock investors appear to be discounting the constraints, according to the firm, with the S&P 500’s forward price-to-earnings ratio falling to 17.6, below its Liberation Day level of 18.1. The S&P 500 fell 2.7% in the week ended November 6, with Information Technology declining 6.9%.
Yardeni Research linked Thursday’s sharp selloff to concerns that political opposition to data centers following the U.S. midterms could disrupt AI infrastructure spending.
The firm expects these restrictions to slow, rather than halt, the AI investment boom. In a separate QuickTakes note, Ed Yardeni highlighted a 14.5% weekly decline in semiconductor equipment stocks, even as analysts forecast earnings growth of 35.4% in 2026 and 51.5% in 2027.
Yardeni noted that investors have already reduced valuations for AI infrastructure suppliers, while earnings estimates have not yet fallen. “A modest cut in estimates is probably priced in.
A deep one is not,” he said.
U.S. stock futures rose Monday as investors assessed whether technology stocks could recover from last week’s sharp selloff, ahead of key CPI inflation data and earnings from AI-linked companies.
Dow Jones futures rose about 400 points, or 0.76%, while S&P 500 futures advanced 0.36% and Nasdaq-100 futures climbed about 0.5%.
