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AI · Capital Spending · Earnings Growth · Infrastructure
New research from Alger reveals that AI spending and the accompanying infrastructure buildout significantly propelled corporate earnings, contributing 13.6 percentage points to the S&P 500 Index's 17.9% return in 2025, indicating fundamental strength rather than mere investor sentiment.
Alger's analysis shows that changes in the price-to-earnings ratio added only 2.4 percentage points to the S&P 500's performance. This earnings growth reflects a substantial transformation in corporate capital allocation, with approximately $4.2 trillion in annual private nonresidential fixed investment, representing 14% of U.S. GDP, deployed across data centers and power infrastructure.
Alger identifies a projected $10 trillion in U.S. AI infrastructure investment over the next four years, driven by the exponential demand for computing power and electricity. This broad investment cycle creates opportunities beyond traditional technology names, extending to infrastructure beneficiaries.
The Alger AI Enablers & Adopters ETF (ALAI) targets companies across this ecosystem, including Nvidia Corp. (NVDA), Microsoft Corp.
(MSFT), Meta Platforms Inc. (META), Nebius Group (NBIS), Talen Energy Corp.
(TLN), Apple Inc. (AAPL), Taiwan Semiconductor Manufacturing Co.
(TSM), and Broadcom Inc. (AVGO).
