Analysts warn of earnings crash priced into top US AI stocks despite rally

Wall Street debate intensifies as some strategists argue that even after the surge, memory chip and AI names trade at historically cheap valuations relative to expected profit growth.

By Handelsavisen Newsroom · Automated 2026-07-13 13:45 UTC · 1 min read

A growing chorus of Wall Street analysts is warning that a potential earnings collapse is already baked into the valuations of this year’s top-performing US equities, particularly in the artificial intelligence and memory chip sectors.

Despite the massive price rallies seen in recent months, these stocks remain among the cheapest in the S&P 500 on a forward earnings basis, according to a market letter from Axios cited by Dagens Industri.

The divergence between price action and valuation metrics has sparked a heated debate on Wall Street.

One camp argues that the AI-driven profit boom will sustain the rally, while skeptics contend that the market is pricing in a severe earnings downturn that may not materialize.

This tension highlights a broader disconnect in the current market regime, where momentum and narrative often outpace traditional fundamental checks.

This development comes as US equity markets approach their strongest quarterly performance in six years, with the S&P 500 on track for its best return since 2020.