Since late 2022, AI stocks have been the main engine behind the S&P 500’s rise. The companies most directly tied to AI are up an incredible 181%, and together with AI-related utilities and equipment, they explain most of the index’s gains. To put it simply, these few sectors now make up about 75% of total returns, nearly 80% of earnings growth, and almost all of the increase in investment spending. Without AI, the rest of the market looks much weaker, with only a 25% price gain and small earnings growth.
The difference is huge. Direct AI companies more than doubled their profits and invested heavily in new projects, while many non-AI companies barely grew. Even in research and development, AI-focused companies poured money in, while other sectors cut back. Businesses clearly see AI as the place where future growth will come from.For investors, this changes the game. Diversifying across the S&P 500 doesn’t protect you the way it used to, because so much now depends on a handful of AI leaders. If they struggle, the whole index feels it. Meanwhile, the supporting players like chipmakers and cloud providers have done well but don’t drive the market nearly as much.The bigger story is that the economy itself is shifting toward AI. Companies are spending more and building strategies around it. Supply chains, mergers, and even startups are being shaped by this wave. For the rest of the market, the message is clear: either find a way to plug into AI, or risk falling behind.Source: StockMarket.News
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