Tech Stocks Up 22% in 2026 as Earnings Outpace Prices, a16z Says AI Bubble Hard to Justify

Andreessen Horowitz said the AI stock rally is difficult to characterize as a bubble because corporate earnings are growing far faster than share prices, according to the venture firm's September 2026 market conditions report published Thursday. Technology stocks have risen 22.1% year-to-date while earnings per share grew 55.7%, and the sector's price-to-earnings multiple contracted 21.6%, a16z said. The firm concluded that "earnings, not prices, are what is really driving the market." Valuation multiples for tech stocks now sit about 20% below their five-year average, even as earnings climb. The report also noted the rally has broadened beyond the "Magnificent Seven," with hyperscaler spending on AI infrastructure pushing semiconductor profits to record levels and market returns following capital flows. a16z cautioned the data does not prove AI stocks cannot fall. If AI spending slows or returns on investment disappoint, earnings estimates could shift rapidly. The next test for investors is whether profit growth can sustain the heavy capital being poured into AI infrastructure.