Goldman Sachs dissects the U.S. stock market's second-quarter reports: AI infrastructure rakes in profits, while profitability on the application side still feels like "a pie in the sky."

Goldman Sachs Group, Inc. strategist Ben Snyder noted that companies are ramping up investments in artificial intelligence (AI) at an unprecedented pace; however, for most companies, this technology has yet to substantial profit improvements. In a report released on August 14, Goldman Sachs Group, Inc. stated that during the second quarter earnings season this year, only 2% of S&P 500 constituents quantified the specific impact of AI on profits; 11% indicated that measurable productivity improvements had been observed in specific areas such as software programming and customer support. However, among those companies that achieved efficiency gains, their profit growth did not significantly outperform the overall market. Data showed that their median year-over-year profit growth was 17%, while those that had not quantified the AI efficiency contributions posted a growth of 14%. Goldman Sachs Group, Inc. pointed out that this difference is not statistically significant. For investors, this finding helps explain the current market dynamics: on one hand, stocks benefiting from AI infrastructure, such as semiconductor manufacturers and cloud service providers, continue to attract attention; on the other hand, companies promising future efficiency improvements are treated with general caution. Infrastructure spending has led to immediate revenue and profit growth, whereas the potential returns of companies enhancing efficiency through AI remain difficult to measure and may take several quarters to gradually materialize. AI Infrastructure Drives Profit Growth Overall, the second quarter earnings season was particularly strong. Goldman Sachs Group, Inc. stated that after excluding non-recurring gains related to some private equity investments, the S&P 500s earnings per share rose by 31% compared to the same period last year. Among hyperscale companies and other beneficiaries of AI capital expenditures, profit growth reached 54%, contributing about half of the overall earnings growth of the index. Nevertheless, growth momentum is not limited to large tech stocks. The median profit growth of S&P 500 constituents was 14%; excluding energy companies benefiting from rising oil prices, non-AI infrastructure companies also experienced a growth rate of 14%. This broader improvement may help alleviate market concerns about profit growth being overly reliant on a few tech giants. However, a significant performance gap remains between infrastructure providers and AI application companies. Goldman Sachs Group, Inc. noted that investors prefer infrastructure stocks because their earnings are immediately observable and relatively easy to track. In contrast, the performance of companies frequently mentioning AI productivity initiatives has roughly kept pace with the S&P 500 overall in recent years. Corporate Spending Accelerates Expansion Various signs indicate that the impact of AI may become clearer in corporate earnings reports over the next few quarters. Goldman Sachs Group, Inc. cited the Ramp AI Index showing that monthly per capita AI spending by companies has increased from $5 at the beginning of the year to $12 in July; for the top 10% of companies, this spending jumped from $240 to $650. In Q2 earnings conference calls, about 7% of S&P 500 companies discussed the costs of AI deployment. Most companies noted that their related spending is still small or emphasized that investments would proceed with caution, while some reported that the returns from AI have already exceeded the costs. Goldman Sachs Group, Inc. estimates that the current cost of AI inference accounts for less than 0.5% of S&P 500 companies' revenues. Their latest IT spending survey indicates that 89% of respondents said AI spending accounts for 1% to 5% of their IT budgets. It is important to note that this estimate does not encompass all costs related to AI deployment, such as personnel staffing and technical infrastructure development. Existing Budgets Support Transformation Goldman Sachs Group, Inc.'s survey found that about two-thirds of companies support AI investments by reallocating resources from existing budgets rather than fully relying on new funding. Specifically, 35% of respondents indicated that AI spending comes from new budgets; 18% raised funds through efficiency improvement projects; another 18% reallocated from software budgets, 11% shifted from labor costs, 10% originated from cloud service budgets, and 9% came from data analytics spending. Goldman Sachs Group, Inc. believes that structural adjustments within IT budgets are more likely to redistribute profits among different companies rather than significantly changing the overall earnings level of the S&P 500. However, if labor costs are significantly reduced, there could be broader economic implications. Currently, the impact on the labor market is still concentrated in marketing, graphic design, customer service, and some technical positions, while the new jobs created by data center construction have somewhat offset the reductions in these roles. Goldman Sachs Group, Inc. economists expect that AI will ultimately replace some labor, but they believe that this impact will be temporary and smaller than many investors anticipate. Impact on Software Industry Not Yet Obvious There have been concerns in the market that customers might develop applications independently using AI, thereby reducing dependence on external software vendors. However, Goldman Sachs Group, Inc. found that there has not yet been a widespread reshuffling of the industry. In their IT survey, only 17% of responding companies indicated that they planned to increase internal software development and decrease purchases of off-the-shelf software. The median annual recurring revenue (ARR) growth rate of the software companies covered by Goldman Sachs Group, Inc. rose from 18% in Q4 2025 to 22% in Q1 this year, and further accelerated to 23% in Q2. Of course, this does not mean that individual vendors can rest easy. Goldman Sachs Group, Inc. mentioned reports that Starbucks Corporation (SBUX.US) is developing internal AI tools to replace some software currently provided by companies like Microsoft Corporation (MSFT.US) and IBM (IBM.US). However, from an industry-wide perspective, there has not yet been a trend of widespread deterioration. Goldman Sachs Group, Inc. Screens Potential Beneficiaries Goldman Sachs Group, Inc. believes that companies with high labor costs and significant positions that can be automated are likely to benefit the most from AI. Currently, labor costs account for approximately 12% of the total revenue of S&P 500 companies, with an annual scale of about $2.1 trillion. There are significant differences across industries: in industrial companies, the share reaches 21%, in the information technology sector it is 16%, while the energy sector accounts for only 5%. Goldman Sachs Group, Inc. has screened high-labor-cost companies with significant automation potential from the Russell 1000 index and noted that management has mentioned AI-related efficiency improvements in earnings reports. The list includes: CoStar Group, Inc. (CSGP.US), Dollar Tree, Inc. (DLTR.US), eBay (EBAY.US), Arthur J. Gallagher (AJG.US), Axon Enterprise (AXON.US), The Trade Desk (TTD.US), Airbnb, Inc. Class A (ABNB.US), Boeing Company (BA.US), Lockheed Martin (LMT.US), Charles Schwab Corp (SCHW.US), and Morgan Stanley (MS.US). However, Goldman Sachs Group, Inc. also pointed out that this screened list does not imply that these companies have achieved significant cost reductions or efficiency improvements through AIindeed, the profit data of these potential beneficiaries has not yet shown substantial enhancements. Currently, the investment logic surrounding AI remains distinctly divided: on one side are infrastructure providers, whose profits are clearly observable; on the other side are technology deployers, whose financial returns largely remain at the level of expectations.