It’s a good thing that Nvidia’s Q4 2025 earnings beat expectations yesterday, because an increasing portion of U.S. GDP growth is coming from AI capital expenditures (capex) and the “wealth effect” from tech stock gains on consumer spending, according to a new analysis from Pantheon Macroeconomics.
AI capex “accounted for nearly a fifth of the 2.2% year-over-year increase in headline GDP in Q4,” Pantheon’s Samuel Tombs and Oliver Allen said in a note to clients this morning.
In addition, the value of households’ holdings of Magnificent Seven tech stocks increased by $3.8 trillion in 2025, they estimate. Using historic trends as a guide, that increase in wealth drove an increase in consumption by 0.4 percentage points in Q4 2025, adding 0.3 points to GDP growth, they said. (The “wealth effect” is the phenomenon that describes how consumers tend to increase their spending when they feel richer due to a rise in the value of their houses or investments.)
All told, “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,” they said.
“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.”
Pantheon believes that while AI has not yet shown up in headline productivity growth, there has been “an acceleration in productivity in those sectors where AI adoption currently is highest [like tech companies], offsetting a slowdown elsewhere. Productivity growth in the first group is meaningfully above its pre-pandemic trend,” the analysts said.
In addition, contrary to Citrini’s self-confessed “AI doomer fan-fiction” scenario, “For now, AI seems to be making workers in some roles more productive, but it is not yet advanced enough to replace them. We see little evidence to indicate that a big wave of AI-driven layoffs is on the immediate horizon.”
Here’s a snapshot of the markets this morning prior to the opening bell in New York:
