AI dividends are flocking to traditional industries! From garbage trucks to insurance brokers, it is also possible to “reap” profits other than tech giants

The Zhitong Finance App learned that American companies are gradually showing returns using artificial intelligence tools. This is undoubtedly a reassurance pill for investors who previously had doubts about the huge AI investments of a few giants. This is one of the core signals sent by the second-quarter earnings season, when nearly 90% of companies in the S&P 500 index have disclosed financial reports. According to 22V Research LLC's analysis, about 25 constituent companies clearly quantified the impact of AI on their profit margins — on average, AI technology contributed 180 basis points to profit margin expansion. If companies that confuse AI with other productivity improvements are excluded, the average profit margin brought by AI rises to 150 basis points.

AI dividends are no longer exclusive to tech giants

Notably, the beneficiaries are not limited to tech giants — garbage removal companies, heating system manufacturers, and insurance brokers are also on the list. Dennis Debusschere (Dennis Debusschere), president and chief market strategist at 22V Research, said that by extrapolating this margin improvement to the overall index, there is at least room for an increase in fair value of the S&P 500 by more than 10%.

“In these early estimates, direction is more important than accuracy, and direction points to more and more AI users reporting more significant profit margin improvements,” Debusschel pointed out.

More and more S&P 500 constituents are detailing how AI tools can increase profit margins, and the extent of improvement continues to expand. In the first quarter, only 17 constituent companies explained the effect of AI on boosting profit margins, with an average improvement of only 20 basis points.

Typical case: garbage trucks are also smart

The US Waste Management Company (WAST.US) said its “smart truck” platform has now contributed more than 300 million US dollars in annual profit before interest, tax, depreciation and amortization (EBITDA) through service upgrades, route optimization, and reduced operating costs. Company President John Morris (John Morris) said during the earnings call: “We are also continuing to innovate through AI tools, autonomous long-haul vehicles, and remotely operated heavy equipment. It is expected that these will support higher revenue acquisition, lower operating costs, and maintain the continued expansion of profit margins.”

Additionally, Mark Begor (Mark Begor), CEO of the credit reporting agency Equifax Inc. (EFX.US), said in a July conference call that the cost savings and productivity benefits associated with AI have begun to show in 2026. Logistics company C.H. Robinson Worldwide Inc. (CHRW.US) claims that AI has boosted productivity by 60% since 2022.

More industry cases are emerging

Dozens of companies have disclosed similar developments. Cybersecurity company Fortinet Inc. (FTNT.US)'s second-quarter operating margin increased by 490 basis points. Insurance brokerage giant Willis Towers Watson Plc (WTW.US) said it will achieve $400 million in cost savings, mainly “driven by process automation.”

At the individual stock level, investors are rewarding companies with quantifiable profit margin improvements. According to 22V Research, the profit margin of Johnson Controls International Plc (Johnson Controls International Plc) is expected to expand by 260 basis points, and its stock price has increased 11% cumulatively since the release of the July 29 earnings report.

AI 'circular transaction' concerns allayed

To a certain extent, this has allayed market concerns that huge AI spending has failed to translate into an increase in corporate profit margins. Previously, concerns about “circular transactions” further fueled fears — that is, chip giants such as Nvidia (NVDA.US) invest in customers and projects, then push these customers to buy their chips, forming a closed loop of self-circulating revenue.

Michael O'Rourke (Michael O'Rourke), chief market strategist at JonesTrading Institutional Services, said, “You're starting to see the beneficiaries of AI, and they can seize this opportunity to drive increased productivity and profit margins.” In his view, more and more non-tech companies are using AI to increase profit margins, which helps explain the excellent performance of this year's small-cap Russell 2000 Index and the equal-weighted S&P 500 Index — the latter gives NUE.US (NUE.US) the same weight as NVIDIA.

Management confidence boosted, few deniers

Even without quantifying AI's specific contribution to profit margins, more and more S&P 500 companies still expect AI to bring about general improvements. According to statistics, executives of 43 S&P 500 companies have clearly stated that AI is contributing to profit margins this earnings season, and about 85 executives say AI has some support for profit margin growth. Opponents, however, came from only 3 S&P 500 companies.

Looking ahead, the key is whether a wider range of companies can prove the impact of AI technology on their profit margins. Chris Senyek (Chris Senyek), chief investment strategist at Wolfe Research, pointed out that the increasing weight of the technology and communications services sector and AI beneficiary companies has played an important role in driving the S&P 500 index profit margin expansion.

“The combined effects of strong fundamentals (thanks to AI) have driven higher profit margins,” Senek wrote in an August 5 research report. He expects “profit margins to continue to expand for the rest of the year as the US economy remains strong.”