AI dividends are flowing into traditional industries! From garbage trucks to insurance brokers, profits can be "harvested" beyond tech giants.

American companies are gradually seeing returns from their adoption of artificial intelligence tools, which undoubtedly reassures investors who had previously expressed doubts about the massive AI investments made by a few tech giants. This is one of the key signals conveyed during the second quarter earnings season, in which nearly 90% of companies in the S&P 500 index have disclosed their financial reports. According to analysis from 22V Research LLC, approximately 25 component companies clearly quantified the impact of AI on their profit marginson average, AI technology contributed to an expansion of profit margins by 180 basis points. Excluding companies that conflated AI with other productivity improvements, the average profit margin increase attributed to AI was 150 basis points. The AI dividend is no longer solely enjoyed by tech giants. It is noteworthy that beneficiaries are no longer limited to tech giantswaste management firms, heating system manufacturers, and insurance brokers are also on the list. Dennis DeBusschere, president and chief market strategist at 22V Research, stated that extrapolating this margin improvement across the entire index implies that the fair value uplift for the S&P 500 is at least over 10%. "In these early estimates, direction is more important than precision, and the direction points to an increasing number of AI users reporting more significant margin improvements," DeBusschere pointed out. More and more S&P 500 component companies are detailing how AI tools enhance profit margins, and the extent of improvement continues to expand. In the first quarter, only 17 component companies explained how AI had positively impacted profit margins, with an average improvement of just 20 basis points. A typical case: Smart garbage trucks Waste Management Inc. (WAST.US) reported that its "smart truck" platform has contributed more than $300 million in annualized earnings before interest, taxes, depreciation, and amortization (EBITDA) through service upgrades, route optimization, and reduced operational costs. Company president John Morris stated during the earnings call, "We are also continuing to innovate with AI tools, autonomous long-haul vehicles, and remotely operated heavy equipment, which we expect will support higher revenue generation, lower operation costs, and sustained profit margin expansion." Additionally, Equifax Inc.'s CEO Mark Begor mentioned in a July conference call that cost savings and productivity benefits related to AI are already beginning to materialize in 2026. Logistics company C.H. Robinson Worldwide Inc. (CHRW.US) claimed that since 2022, AI has driven productivity improvements of 60%. More industry cases are emerging. Dozens of companies have disclosed similar advancements. Cybersecurity firm Fortinet Inc. (FTNT.US) reported a 490 basis point increase in operating profit margins in the second quarter. Insurance brokerage giant Marsh & McLennan Companies, Inc. (Willis Towers Watson Plc, WTW.US) stated it will achieve $400 million in cost savings, primarily driven by process automation. On an individual stock level, investors are rewarding companies with quantifiable profit margin improvements. 22V Research noted that Johnson Controls International plc is expected to see a 260 basis point expansion in margins, with its stock price increasing by 11% since the earnings report was released on July 29. Concerns over "circular trading" in AI have eased. This somewhat alleviates market concerns that massive AI spending has not translated into increased profit margins for companies. Previously, fears of "circular trading" had intensified panicthat is, chip giants like NVIDIA Corporation (NVDA.US) investing in customers and projects to further prompt those customers to purchase their chips, creating a self-reinforcing revenue loop. Michael O'Rourke, chief market strategist at JonesTrading Institutional Services, stated, "You are starting to see beneficiaries of AI who are able to seize opportunities to drive productivity and margin improvements." In his view, the growing number of non-tech companies achieving margin growth through AI helps explain the strong performance of the small-cap Russell 2000 index and the equal-weighted S&P 500 index this yearboth giving equal weight to Nucor Corporation (NUE.US) and NVIDIA Corporation. Management confidence is increasing, with few dissenters. Even without quantifying the specific contribution of AI to profit margins, an increasing number of S&P 500 companies still expect AI to bring overall improvements. Statistics show that during this earnings season, 43 executives from S&P 500 companies clearly stated that AI is contributing to profit margins, with approximately 85 executives affirming that AI is providing some support for margin growth. There were only three companies in the S&P 500 voicing dissenting opinions. Looking ahead, the key lies in whether a broader range of companies can demonstrate the impact of AI technology on their profit margins. Wolfe Research chief investment strategist Chris Senyek noted that the rising weights of technology and communication services sectors, along with AI beneficiary companies, have played a significant role in driving margin expansion for the S&P 500 index. "The compound effect of robust fundamentals (thanks to AI) has pushed margins higher," Senyek wrote in a research report on August 5. He expects, "As the U.S. economy remains strong, profit margins will continue to expand for the remainder of the year."