We Are In The Earnings Bubble— The Biggest Ever
Adam Taggart | Thoughtful Money® Jul 15, 2026
Fred Hickey's takeaways
- Top takeaway Argues the US market is in not only the greatest stock bubble in US history - a view he shares with Jeremy Grantham, though not Grantham's call for a 70% crash - but also an 'earnings bubble' unlike anything he has seen before.
- Contends the bubble sits in the 'E': component makers such as Nvidia, Micron and Western Digital book revenue and earnings almost immediately on hyperscaler orders, while GPU, DRAM and server costs are depreciated over five to six years, inflating reported profits.
- Cites valuations above the 2000 peak as of mid-2026 - a Buffett indicator of 241% of GDP versus 160% and a price-to-sales ratio of 3.7x versus 2.3x - but says the real problem is that the earnings themselves are inflated.
- Points to cyclical Micron going from negative gross margins in 2023 to about 85% gross margins on roughly $750 billion of data-center spending by the five biggest US hyperscalers plus about $100 billion from outside the US.
- Says mark-to-market gains on hyperscalers' stakes in OpenAI, Anthropic and SpaceX drove roughly 40% of first-quarter earnings growth, further masking the underlying economics as depreciation costs begin to build.
Jeremy Grantham's takeaways
- Top takeaway Expects a great crash in which stocks decline about 70%, according to Hickey's account in this video.
- Hickey says he agrees with Grantham that this is the greatest US stock bubble in history, even while doubting the crash call.