What's Next For Markets · Sep 27, 2026 · 23m · 11m saved
With Michael Kantrowitz, Chief Investment Strategist at Piper Sandler
Only 40 companies in the S&P 1500 have linked their use of AI to a stated improvement in margins, according to Piper Sandler's reading of second-quarter earnings calls.
The question Michael Kantrowitz hears most from clients is how much of the economy's strength is the AI build-out. His count shows 45% of those companies mentioned AI last quarter, while 89% scored as seeing their earnings expand.
"It's great to say we're seeing a benefit or we're using AI, but if you don't put a number behind it, what is an investor to do with that?"
Michael Kantrowitz, Chief Investment Strategist at Piper Sandler, on What's Next For Markets. He leads the firm's portfolio strategy team, which he said was ranked number one on Wall Street in the All-America Institutional Investor Research Survey, and his team built an AI agent that reads every S&P 1500 company's earnings-call transcript and turns what management said into numbers.
The full episode is covered here so you can skip it. 23 minutes of audio, 12 minutes of reading.
Here are the 9 numbers that matter.
Key Takeaways
Nearly half of the S&P 1500 mentioned AI in Q2, up from 35% the quarter before, but only a small fraction put a number on it
Only 40 companies tied AI to a stated margin improvement
AppLovin reported 300 basis points of adjusted EBITDA margin expansion
89% of companies saw earnings expand, far more than AI can explain
321 companies said the AI build-out improved their business, and their earnings score was 68.5 against 62.6 for the whole index
1,200 companies said nothing about AI and are still running hot, with an earnings score of 60.6
AI adoption is too low for mass layoffs, and software engineer wages are growing about 7%
Every sector's pricing rose in Q2, but consumer staples sit at the bottom at 52
Household durables, household products and food products are seeing price deflation, with price scores below 50
1. Half Cite AI, Few Measure
Kantrowitz said client questions swing between two subjects from week to week: interest rates and AI. The previous week's episode had covered rates and inflation. This one took the second question.
The question clients ask most is how much of the strength is AI
"And so the number one question we get from clients is how much of this economic strength is just about the AI buildout?" — Michael Kantrowitz
He said everyone has an anecdote. At Piper Sandler's macro conference two weeks earlier, a client asked Brad Jacobs, CEO of QXO, how many S&P 500 companies are using AI and seeing some benefit. Jacobs put it at about 10%.
"And I'd say that's pretty close to the data we're looking at." — Michael Kantrowitz
His team's answer is an AI agent that scrubs every company's earnings-call transcript. In the second quarter, 45% of S&P 1500 companies cited AI in some form.
Mentions are rising quarter by quarter
"Now, that's an improvement or an increase from last quarter where it was only 35%." — Michael Kantrowitz
He expects the share to keep climbing as more companies find ways to use AI to sell more, build new products and cut costs. Even so, he found 45% low.
"So that almost seems low because you would think that by this time you'd have almost every company in some form adopting AI." — Michael Kantrowitz
Of the companies that cited AI, only a small fraction put an explicit number on it, stating what they had adopted and how many basis points of efficiency or cost savings it produced. The host said he was surprised so few companies were highlighting it, and put the figure this way: "it was what 29% are mentioning quantifiable numbers in terms of their impact on their businesses." Kantrowitz replied that it is "still a pretty small number."
