Apollo: S&P 493 AI Spending Yields No Profit Returns
Taylor Wilson
Apollo chief economist Torsten Slok flags a structural gap: the S&P 500's non-tech majority — the "S&P 493" — is pouring capital into AI, yet margins have not improved. The winners so far are AI sellers, not buyers.
The S&P 493 spent heavily on AI — did margins move?
The roughly 493 non-tech companies in the S&P 500 have been steadily investing in AI systems and infrastructure, yet profit margins show no corresponding lift.
This means → the money going out is still sitting in the "cost" column, not yet showing up in the "return" column.
In plain terms = they bought the AI tools, but haven't made more money from them yet.
What do sector margins actually look like?
Healthcare margins have shrunk by roughly half since 2015, with no sign of an AI-driven reversal.
Consumer staples hover around 6%; consumer discretionary sits near 8% — neither showing an AI inflection point.
Energy and materials have largely given back their 2022–2023 gains; real estate margins remain flat.
Slok argues that any visible improvement tracks normal cyclical recovery, not a structural AI-driven margin expansion.
So who is actually making money from the AI boom?
The primary beneficiaries of the current AI capex wave are the sellers of AI hardware, software, and services — the tech companies supplying the tools.
The buyers — companies across industries deploying AI — have not yet converted that spending into lasting earnings gains.
This means → profits are concentrated on the supply side; the demand side is still in a "spend now, hope for returns later" phase.
What risk does this create for markets?
Slok warns: the longer the S&P 493 takes to convert AI investment into clear returns, the greater the potential downside risk for markets.
This reflects a deeper concern: the economy and equity markets are already heavily concentrated around the AI theme. If returns keep failing to materialize, the valuation thesis may come under pressure.
In plain terms = the market has already priced in "AI will definitely boost profits." If the profits don't arrive, prices have to adjust.
Content is for reference only, not financial advice.