As nearly 90% of the constituents of the S&P 500 Index have completed their second-quarter earnings disclosures, a core signal that has galvanized the market is gradually becoming clear: the application of artificial intelligence tools is delivering tangible profit returns to U.S. companies, which to some extent has alleviated investors’ widespread concerns that the massive AI investments made by a few technology giants would struggle to generate returns.
According to an analysis by 22V Research LLC, about 25 constituent companies this quarter explicitly quantified AI’s impact on profit margins. The data show that the technology contributed an average margin expansion of 180 basis points to these enterprises. Even after excluding companies that conflated AI with other productivity-enhancing factors, the average margin improvement attributable to AI alone stood at 150 basis points. Dennis DeBusschere, President and Chief Market Strategist at 22V Research, pointed out that extrapolating this magnitude of improvement to the entire index implies at least a 10% upside in the fair value of the S&P 500, and emphasized that in these early estimates, the directional trend is more instructive than precise figures.
One particularly notable change is that the dividends from AI are no longer monopolized by tech giants. Companies in traditional industries—including waste haulers, heating system manufacturers, and insurance brokerage firms—also appear on the list. For example, Waste Management Inc. (WM) stated that its “smart truck” platform, through route optimization and service upgrades, has contributed more than $300 million in annualized EBITDA, and the company’s president expects that AI-driven cost reductions and revenue enhancements will continue to support margin expansion going forward. In addition, credit bureau Equifax Inc. (EFX) reported that AI-related cost savings began to materialize in 2026, while logistics company C.H. Robinson Worldwide Inc. (CHRW) disclosed that AI has driven a 60% productivity improvement since 2022.
Similar progress has emerged across multiple industries. Cybersecurity firm Fortinet Inc. (FTNT) saw its second-quarter operating margin rise by 490 basis points, while insurance brokerage giant Willis Towers Watson Plc (WTW) plans to achieve $400 million in cost savings through process automation. In terms of individual stock performance, investors have begun to reward quantifiable improvements: Johnson Controls International Plc, after projecting a margin expansion of 260 basis points, has seen its share price rise by a cumulative 11% since its earnings release.
An increasing number of company executives have explicitly cited AI’s positive contributions in their earnings reports. This quarter, a total of 43 S&P 500 constituent company executives stated that AI is contributing to margins, approximately 85 executives said that AI provides some support to profit growth, while dissenting voices came from only three companies. This broad-based management confidence has effectively alleviated earlier market anxieties that AI “circular trading”—the self-reinforcing cycle in which chip giants boost sales by investing in their customers—might be masking genuine demand.
Analysts believe that the ability of non-tech sectors to leverage AI for growth helps explain the relatively strong performance of small-cap stocks and the equal-weighted S&P 500 Index this year. The Chief Investment Strategist at Wolfe Research expects that as AI-benefiting companies increase their weight in the index and the U.S. economy remains robust, AI-driven strong fundamentals will continue to propel margin expansion for the remainder of the year.
