Wall Street still searching for AI profit boost but the theme remains hot

Artificial intelligence is the talk of corporate America, but the financial payoff is still out of reach, Goldman Sachs said in a note on ￰0￱ bank found that chatter about AI on earnings calls hit a new high last quarter, even as few companies could point to clear gains in ￰1￱ Q2, a record 58% of S&P 500 firms referenced AI on investor calls, Goldman’s analysts ￰2￱ highlighted new tools for customer service, software coding, and ￰3￱ “the share of companies quantifying the impact of AI on earnings today remains limited,” the note ￰4￱ matches a recent McKinsey survey in which more than 80% of firms reported that generative AI has not meaningfully affected their bottom ￰5￱ lack of hard results has not cooled Wall Street’s ￰6￱ tied to the AI theme are up 17% this year, after a 32% jump in 2024, Goldman ￰7￱ valuations have climbed as ￰8￱ S&P 500 now trades at one of its costliest levels on record.

However, it’s still below the extremes of the late-1990s dot-com era and the 2021 tech surge, the analysts ￰9￱ outlines four phases of the AI trade Goldman mapped the AI trade into four phases to explain where markets stand and what could ￰10￱ 1 centered on Nvidia , whose chips power many AI ￰11￱ 2, where the market sits ￰12￱ is powered by the biggest cloud operators, including Amazon, Microsoft, Google, Meta and Oracle. Combined, those giants are projected to commit $368 billion to capital projects in 2025, versus $239 billion in 2024 and $154 billion in ￰13￱ investment wave has boosted semiconductor makers, power providers, and other firms that build and run the underlying ￰14￱ reported by Business Insider, the next steps are less ￰15￱ 3 would be the turn for software companies to post AI-driven revenue gains as they embed the technology into ￰16￱ investors worry that the same tools could push prices down or make it easier for new rivals to ￰17￱ a result, many are likely to wait for clear proof in earnings before bidding those stocks higher.

“For AI-native companies to take share from SaaS companies, the AI product has to be meaningfully better and meaningfully cheaper than the incumbent, and SaaS companies continue to progress with their own AI-enabled products,” Goldman’s analysts ￰18￱ 4 would be the broad productivity lift long promised by ￰19￱ now, the bank says the United States remains in the early innings of ￰20￱ is heavier at large companies and in the information and financial ￰21￱ cautioned that expectations can get ahead of ￰22￱ AI investment fell back to 2022 levels, the bank estimates 2026 sales forecasts would drop by $1 trillion, with the S&P 500 losing 15% to 20% of its ￰23￱ recently noted that the United States is pouring billions of dollars and drawing heavily on energy supplies amid a race to lead in AI ahead of ￰24￱ headlines dominated by the technology and investor interest running high, some ask whether today’s run-up could be a throwback to the dot-com ￰25￱ hype mirrors 1990s tech boom as valuations soar There are clear ￰26￱ the late 1990s, many internet companies won sky-high valuations with little more than a plan and a website.

Today, AI is pitched as a technology that could change fields from health care to finance to ￰27￱ example is Palantir , a market favorite whose price-to-earnings ratio recently reached ￰28￱ concentration is another ￰29￱ in 1999, Cisco, Intel, Sun Microsystems, and AOL were among the biggest winners. Today, the “Magnificent 7”, Apple, Alphabet, Amazon, Meta, Microsoft, Tesla and Nvidia, make up more than 30% of the S&P ￰30￱ concentration adds risk to an index meant to be diversified: a stumble at a few firms can weigh on overall ￰31￱ market value of the top 10 companies is now nearly 40% of the whole S&P 500 ￰32￱ your project in front of crypto’s top minds?

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