S&P 500 · ChatGPT · Fortune Technology
When the iPhone released in 2007, pundits predicted a mobile-first transformation of everything
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Fortune call this the Innovation Paradox: the faster they innovate, the slower they grow.
Key facts
- The stock market echoes this divergence: 36 S&P 500 AI companies now represent 45% of the index’s market capitalization
- Over three years, the headline S&P 500 returned 76%; strip out AI stocks and the figure drops to 32%
- Their within-sector analysis of S&P 500 companies (1985–2025) shows that 73% of sector-decade observations fall into the “overhead trap”: SG&A rising while revenue growth declines
- McKinsey’s 2026 survey found that 88% of organizations use AI in at least one function, but a mere 6% qualify as “high performers” achieving more than 5% EBIT impact—unchanged from 2025
Summary
To hear Silicon Valley tell it, artificial intelligence will usher in a glorious new era of abundance. The team have been here before. Technology diffusion in the digital age follows what the reporter call a double K-shaped pattern. Enterprise resource planning systems took 33 years to reach 57% of U.S. firms. The second K-shape is within the enterprise space. McKinsey’s 2026 survey found that 88% of organizations use AI in at least one function, but a mere 6% qualify as “high performers” achieving more than 5% EBIT impact—unchanged from 2025. The stock market echoes this divergence: 36 S&P 500 AI companies now represent 45% of the index’s market capitalization.