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"Terminal value" - a company's worth beyond the next 10 years based on estimated earnings - accounts for about 75% of the S&P 500's equity value, near a 25-year high.
Terminal value comprises 75% of S&P 500 equity value, near a 25-year high.
KEY POINTS
- S&P 500 software and services index has dropped about 17% this year on AI disruption fears.
- Big four cloud companies will spend around $600 billion on AI in 2024, straining cash flows.
- A 1% drop in long-term growth assumptions could reduce S&P 500 enterprise value by approximately 15%.
- Only 5% of S&P 500 companies discuss financial metrics beyond five years in earnings calls.
COMPANIES
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