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In terms of U.S. macroeconomic weight, the current AI infrastructure build-out has actually surpassed the peak of the late-1990s internet boom as a share of the total U.S. economy.
Tech investment alone has been responsible for the vast majority of real U.S. GDP growth over the last several quarters, demonstrating a much deeper concentration of capital than we saw twenty-six years ago.
What Are Current AI Cap-Ex Spending Levels (2026)?
Driven by the massive, relentless hyperscaler capex boom in artificial intelligence, data centers, and advanced computing infrastructure, total private non-residential tech and telecom investment is hovering around 5.5% to 6.0% of nominal U.S. GDP.
To put that into context: Total non-residential fixed investment (which includes heavy industrial equipment, commercial structures, warehouses, etc.) is roughly 14.1% of GDP.
Information processing equipment and software alone make up a staggering 40% to 42% of all business capital expenditure.
Was U.S. Total Internet Investment Around 15% at the Dot-Com Height?
No, it never approached 15% of total GDP — though it certainly felt like it given the market cap distortions of the era.
At the absolute peak of the dot-com/TMT (Technology, Media, and Telecom) bubble in 2000:
Tech and telecom investment peaked at roughly 4.0% to 4.2% of U.S. GDP (401.6 billion in nominal terms at the time).
The 15% Confusion: The 15% figure is closer to what total aggregate business investment across all sectors(including real estate structures, factories, aircraft, and heavy machinery) represents as a share of GDP. At the dot-com peak, total non-residential fixed investment hit an all-time high of roughly 13.5% to 14.0% of GDP.
II. Zacks July 2026 Sector/Industry/Company Telescope
June 30th, 2026 data show Info Tech remains dominant, at Very Attractive. Misc. Tech, Electronics and Computers-Office led. Semis ranked high this month, too.
Industrials stayed at Very Attractive.
Energy went to Attractive from Very Attractive; Oddly, Coal led this month. Health Care rose to Attractive. Medical Care did the trick.
Communication Services fell to Market Weight from Very Attractive. AI Telco Equipment group ranked high again.
Financials stayed Market Weight. Consumer Discretionary stayed at Market Weight.
Utilities stayed at Unattractive. Materials remained at Unattractive, too.
Consumer Staples fell all the way to Very Unattractive.
(1) Info Tech stayed Very Attractive. Misc. Tech, Electronics, and Computer-Office Equipment led.
View the Zacks #1 Rank List
A Historically Huge AI Tech Boom: Zacks JULY Strategy
The following is an excerpt from Zacks Chief Strategist John Blank’s full Jul Market Strategy report To access the full PDF, click here.
I. U.S. Markets
An Upfront Takeaway:
In terms of U.S. macroeconomic weight, the current AI infrastructure build-out has actually surpassed the peak of the late-1990s internet boom as a share of the total U.S. economy.
Tech investment alone has been responsible for the vast majority of real U.S. GDP growth over the last several quarters, demonstrating a much deeper concentration of capital than we saw twenty-six years ago.
What Are Current AI Cap-Ex Spending Levels (2026)?
Driven by the massive, relentless hyperscaler capex boom in artificial intelligence, data centers, and advanced computing infrastructure, total private non-residential tech and telecom investment is hovering around 5.5% to 6.0% of nominal U.S. GDP.
To put that into context: Total non-residential fixed investment (which includes heavy industrial equipment, commercial structures, warehouses, etc.) is roughly 14.1% of GDP.
Information processing equipment and software alone make up a staggering 40% to 42% of all business capital expenditure.
Was U.S. Total Internet Investment Around 15% at the Dot-Com Height?
No, it never approached 15% of total GDP — though it certainly felt like it given the market cap distortions of the era.
At the absolute peak of the dot-com/TMT (Technology, Media, and Telecom) bubble in 2000:
Tech and telecom investment peaked at roughly 4.0% to 4.2% of U.S. GDP (401.6 billion in nominal terms at the time).
The 15% Confusion: The 15% figure is closer to what total aggregate business investment across all sectors(including real estate structures, factories, aircraft, and heavy machinery) represents as a share of GDP. At the dot-com peak, total non-residential fixed investment hit an all-time high of roughly 13.5% to 14.0% of GDP.
II. Zacks July 2026 Sector/Industry/Company Telescope
June 30th, 2026 data show Info Tech remains dominant, at Very Attractive. Misc. Tech, Electronics and Computers-Office led. Semis ranked high this month, too.
Industrials stayed at Very Attractive.
Energy went to Attractive from Very Attractive; Oddly, Coal led this month. Health Care rose to Attractive. Medical Care did the trick.
Communication Services fell to Market Weight from Very Attractive. AI Telco Equipment group ranked high again.
Financials stayed Market Weight. Consumer Discretionary stayed at Market Weight.
Utilities stayed at Unattractive. Materials remained at Unattractive, too.
Consumer Staples fell all the way to Very Unattractive.
(1) Info Tech stayed Very Attractive. Misc. Tech, Electronics, and Computer-Office Equipment led.
Zacks #1 Rank (STRONG BUY): Cisco Systems (CSCO - Free Report)
(2) Industrials stayed at Very Attractive. Business Products, Machinery, and Pollution Control look best.
Zacks #1 Rank (STRONG BUY): Johnson Controls International (JCI - Free Report)
(3) Energy moved to Attractive from Very Attractive. Coal led.
Zacks #1 Rank (STRONG BUY): Cenovus Energy (CVE - Free Report)
(4) Health Care rose to Attractive from Market Weight. Medical Care looked best.
(5) Communications Services fell to Market Weight from Attractive. Telco Equipment stayed strong, again. It is an “AI” group.
(6) Financials stayed Market Weight. Real Estate and Banks & Thrifts looked best.
(7) Consumer Discretionary stayed at Market Weight. Publishing looked best. Again.
(8) Utilities stayed at Unattractive. Utility- Electric Power looked best.
(9) Materials stayed Unattractive. Building Products looked best.
(10) Consumer Staples moved to Very Unattractive from Market Weight. Agri-business and Beverages looked the best. Again.
III. Conclusion
There are two overvalued S&P500 sectors to be aware of: Info Tech (of course!), but also Industrials.
Keep that 2nd sector in mind.
Valuation corrections are long past overdue, for both sectors.
That’s it for me.
Enjoy the rest of my JULY Market Strategy report.
Warm Regards,
John Blank, PhD.
Zacks Chief Equity Strategist & Economist