The AI trade passed its earnings exam — the bill arrives later

The AI complex spent the week proving it can still clear the bar it keeps raising. Super Micro Computer reported quarterly earnings 84% above analyst estimates and jumped 19%, AP reported, with guidance above expectations too. The next session, Sandisk surged 13.7% and Micron 4.2% after strong results from Lenovo read across to the memory market, helping push the S&P 500 to its record. AI computing supplier CoreWeave also featured in the advance.

The demand side of those results is a spending number without modern precedent: Reuters-cited estimates put Big Tech's AI investment above $700 billion this year, up from roughly $400 billion in 2025. Earnings season suggested the market has, for now, stopped punishing the spenders — Reuters reports investors have come to read aggressive capital expenditure as a response to visible demand rather than hubris, helped by strong forecasts from Microsoft and Amazon and by the financial strength of the companies writing the cheques.

The strength is also broader than the megacaps. Bessemer Trust's season tally shows ten of eleven S&P sectors growing earnings, with the breadth extending well beyond the AI leaders — an important detail, because it means the market's profit base is less concentrated than its market capitalisation.

The Ledger's read: the exam that matters has moved. The question is no longer whether AI-linked companies can grow into their guidance this quarter — they keep doing so — but whether $700 billion a year of capacity finds paying use before the hardware inside it ages. That is a utilisation question, not an earnings question, and it will be answered in compute prices and depreciation schedules over quarters. Our deep dive this week takes that question apart properly.