Jason Pride, Chief of Investment Strategy and Research at Glenmede, told CNBC on July 10 that investors have tuned out the noise from global conflict as an extraordinary wave of artificial intelligence spending drives corporate growth. “This market is getting desensitized to the geopolitical conflict. At the end of the day, we are in a momentum-driven market,” Pride said.
Pride believes there’s a strong foundation underneath this momentum driven by substantial AI investment. “We are spending almost 3% of GDP on AI build-out per year right now, an astronomical investment. And that’s going into effectively software-like replacement. It’s going into hardware, it’s going into buildings and infrastructure. It’s going into cooling systems,” he said. “That is why we’re seeing this strength in the underlying growth and underlying profits. I think that’s what’s supporting this market.”
Readers looking to find the winning companies riding this AI build-out wave can dig into our Free Report: 7 Stocks Powering the AI Boom (That Aren’t Chipmakers).
The Earnings Behind the Thesis
NVIDIA Is Building the Factories of the AI Economy
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) reported Q1 FY2027 revenue of $81.61 billion, up 85.2% year over year, with Data Center revenue of $75.25 billion, up 92%, and networking up 199% year over year. Jensen Huang described the moment as “the largest infrastructure expansion in human history.” Guidance calls for $91.0 billion in Q2, and total supply commitments have reached $119.0 billion. NVIDIA assumed zero H20 Data Center compute revenue from China, versus $4.6 billion in the year-ago quarter. Shares are up 8.86% year to date, with the next report expected on August 26, 2026.
Micron Is Cashing In on an Explosive Memory Shortage
Micron Technology (NASDAQ:MU) posted fiscal Q3 2026 revenue of $41.46 billion, up 345.7% year over year, with non-GAAP EPS of $25.11 and Q4 guidance of $50.0 billion ± $1.0 billion. CEO Sanjay Mehrotra tied it to “the strategic value of memory in the AI era.” Shares are up 247.66% year to date. This exemplifies the cyclical revenue growth Pride cited when naming Micron, SK Hynix, and Nvidia.
IBM Shows AI Spending Is Reaching Corporate America
IBM (NYSE:IBM) delivered Q1 2026 revenue of $15.92 billion, up 9.5%, with mainframe revenue surging 51% year over year. Arvind Krishna said, “AI continues to be a tailwind for our global business,” with the generative AI book of business topping $12.5 billion inception-to-date.
Honeywell Reveals Where Geopolitical Risk Still Matters
Honeywell (NASDAQ:HON) showed friction. Q1 2026 showed an adjusted EPS beat of $2.45, but revenue of $9.14 billion missed by 1.48%. CEO Vimal Kapur credited execution for “overcoming the impacts of rising inflation and the disruption in the Middle East,” while Building Automation grew 8% organically, driven by data center demand. Honeywell’s Aerospace spin-off completed on June 29, 2026.
Public Service Enterprise Group and The Power Ripple
The AI buildout ripples into utilities. Public Service Enterprise Group (NYSE:PEG) reported Q1 2026 non-GAAP EPS of $1.55 and disclosed large-load inquiries of roughly 11,800 MW as of December 31, 2025, tied to data center demand. Shares are up just 1.5% year to date, trading near the 52-week low of $75.39 despite an analyst target of $89.71.
“There Are Going to Be Winners and Losers”
Pride believes that history shows that no strong story can continue forever. “We will see a slowdown in that cycle as we have with any investment cycle. What we often see in any technology cycle is we see a ramp of investment as everybody rushes towards the same gold rush, trying to benefit from it. They’re going to be winners and losers from that,” he said
Valuations sit above historical averages, and Pride argues they hold only if businesses’ earnings power holds. The unresolved question is whether AI capex, running at roughly 3% of GDP annually, ultimately clears its hurdle for returns. That answer will take years to play out, but until then, momentum has kept the market climbing.
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