"AI capex "accounted for nearly a fifth of the 2.2% year-over-year increase in headline GDP in Q4," while the value of households' holdings of Magnificent Seven tech stocks increased by $3.8 trillion in 2025, driving an increase in consumption by 0.4 percentage points in Q4 2025, adding 0.3 points to GDP growth."
""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," and "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's Q4 2025 earnings beat has reinforced concerns about the concentration of U.S. GDP growth in AI-related sectors. AI capital expenditures contributed nearly one-fifth of the 2.2% year-over-year GDP increase, while the $3.8 trillion increase in household holdings of Magnificent Seven tech stocks generated a wealth effect that added 0.3 percentage points to GDP growth. Combined, these AI-linked factors accounted for approximately one-third of headline GDP growth. This concentration creates economic vulnerability, as a pullback in investor confidence regarding AI could trigger simultaneous declines in both stock prices and investment spending. Despite recent market concerns from a report predicting AI-related unemployment, Nvidia reported record revenue of $68.1 billion, suggesting the AI economy remains resilient.
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