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.”
The good news is that despite a recent wobble triggered by that infamous Citrini Research report predicting mass unemployment in 2028 caused by AI, recent data shows that the AI economy is holding up nicely.
Nvidia was up 1.44% yesterday and held up at 0.15% in overnight trading after spiking sharply 4% after CEO Jensen Huang’s earnings call last night. The company reported record-high revenue of $68.1 billion, up 73%, for Q4 2025, $3 billion more than its previous guidance.
Tech-heavy Nasdaq 100 futures were flat this morning. S&P 500 futures were flat also, after the index closed up 0.81% yesterday.
Pantheon believes that while AI has not yet shown up in headline productivity growth, there has been “an acceleration in productivi