Lance Roberts of RIA Advisors joined Adam Taggart on the Thoughtful Money podcast and brought a sharper version of the market concentration argument that retirement investors holding broad S&P 500 index funds may want to pay attention to.
The 0% Growth Finding
Roberts walked through cumulative year-to-date changes in consensus 2027 EPS estimates, and the numbers tell a stark story. “Here’s the cumulative year-to-date change in consensus 2027 EPS estimates AI infrastructure stocks, 32%. Energy is 19%. S&P 500 is 8%,” he said. Then came the punchline: “If you look down at the bottom, the gray line, S&P 500 ex-AI infrastructure and energy, it’s 0% growth.”
The takeaway is that the S&P 500’s expected earnings growth is being carried almost entirely by two narrow cohorts.
Roberts located the earnings growth driver more precisely. “Most of that earnings improvement is Mag 7. Just below that is, you know, kind of semiconductors. And then if you take a look at the other rest of the economy, they’re barely increasing earnings growth at all this year.”
The market backdrop sharpens the picture. The SPDR S&P 500 ETF (NYSEARCA:SPY | SPY Price Prediction) is up 9.34% year-to-date through May 22, 2026, while the Nasdaq-100 has run 16.8% over the same stretch. The CBOE Volatility Index sits at 16.76 as of May 21, well inside the complacency range, even though the same gauge spiked to 31.05 on March 27, 2026. Real GDP growth decelerated to 2.0% annualized in Q1 2026, down from 4.4% in Q3 2025.
Rebar as a Recession Indicator
Stock charts can paint a misleading picture. Rebar mill order books are harder to argue with. Roberts offered an on-the-ground version of the same concentration story.
“If I’m a company that builds rebar or makes rebar, I’m sold out right now just trying to sell rebar to people building data centers… But the end buyer is the data center,” he said. Industrial activity that looks like broad manufacturing strength may already be channeled into a single end market.
The BEA’s corporate profits data tells a similar story. Manufacturing profits sat at $759.6 billion in Q4 2025, with the information sector climbing from $265.0 billion in Q1 2024 to $317.7 billion in Q4 2025. Meanwhile, transportation profits fell from $123.6 billion in Q4 2024 to $96.8 billion in Q4 2025, and wholesale slid from $305.0 billion in Q4 2023 to $229.6 billion in Q4 2025.
As Roberts put it, “What markets are pricing is the impact of that CapEx spending on the economy that generates the earnings.”
The Chihuahuas and the Bull
Taggart closed with a visualization worth keeping. “It’s like being an Eskimo, you know, ice sledder, where your team of sled dogs is basically a bunch of Chihuahuas with a huge bull in the front… If that bull stumbles, breaks a leg, and you’re just depending on the Chihuahuas, you’re going nowhere.”
The bull is AI infrastructure CapEx. The Chihuahuas are the rest of the index, currently revising 2027 earnings at 0%. Taggart framed the stakes directly: “As long as this continues, I think it’s going to be super hard for a recession to occur… But man, if something were to get in the way of those flows then it could be Katy bar the door.”
Prediction markets are already reflecting that uncertainty. As of May 25, Polymarket assigns a 41% probability that gold outperforms the S&P 500 in 2026, against 34% for the S&P 500 and 27.5% for Bitcoin. Q1 2026 resolved with the S&P 500 gaining less than 0%, a reminder that the broad index can stall even while the AI infrastructure cohort grinds higher.
For index fund holders, the earnings cushion behind the S&P 500 at current levels may rest almost entirely on the AI infrastructure revision line. The key thing to watch is whether hyperscaler CapEx guidance for 2027 continues to support that line, or whether the “Chihuahuas” have to start pulling on their own.
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