A sharp increase in corporate profits has helped lift the S&P 500 about 12% this year, but investors are questioning whether companies can sustain that pace. Full-year earnings for S&P 500 companies are expected to rise 35%, the strongest rate since 2021, when the figure was distorted by the post-pandemic rebound. Analysts and investors are focused on the outlook beyond 2026, including whether AI infrastructure spending can continue supporting profits and whether companies can generate adequate returns on those investments. Higher interest rates could also discourage borrowing for AI projects and slow consumer spending. S&P 500 earnings are expected to grow 15% in 2027, according to LSEG IBES, while all 11 sectors are forecast to post earnings growth in 2026. Valuations have moderated: the index's forward price-to-earnings ratio has fallen to 19.2 from 22 at the start of the year and 23.5 in October 2025. AI-linked shares have seen steeper declines, with the technology sector's forward P/E ratio dropping to about 21 from 26 and the median AI infrastructure stock falling to 22 times forward earnings estimates from 32 in April. Investors are also monitoring spending by five AI hyperscalers, projected at just over $800 billion this year and $1.1 trillion next year. Although the spending increase is expected to slow from nearly 100% this year to 37% next year, analysts say the pace of change will be important for the market. The valuation decline has given some investors confidence that stocks are not excessively expensive despite the S&P 500 trading near record levels, but sustainability of earnings remains a key risk for a bull market approaching its fourth year.