AI spending added 0.5% to GDP growth and the Magnificent 7 stocks are driving the market
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The S&P 500 is up 10% this year, driven largely by tech companies that are spending heavily on AI.
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August 14, 2025
10:39 AM
Fortune
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Finance·AI spending added 0.5% to GDP growth and the Magnificent 7 stocks are driving the marketBy Jim EdwardsBy Jim EdwardsExecutive Editor, Global NewsJim EdwardsExecutive Editor, Global NewsJim Edwards is the executive editor for global news at Fortune
He was previously the editor-in-chief of Insider's news division and the founding editor of Insider UK
His investigative journalism has changed the law in two U.S. federal districts and two states
Supreme Court cited his work on the death penalty in the concurrence to Baze v
Rees, the ruling on whether lethal injection is cruel or unusual
He also won the Neal award for an investigation of bribes and kickbacks on Madison Avenue.SEE FULL BIO Photo by Sameer Al-DOUMY / AFP, via Getty ImagesThe S&P 500 is up 10% year-to-date and set another all-time high yesterday
Much of that growth has come from the Magnificent 7 companies, which are spending heavily on AI and its associated infrastructure
That wave of spending has become so massive that it has added 0.5% to GDP growth, according to Pantheon
S&P 500 futures are flat this morning, premarket, suggesting that investors are not in a mood to sell after the index reached yet another all-time high yesterday
The S&P was up 0.32% on the day, at 6,466.58
A lot of that growth has come from the Magnificent 7 stocks. “The S&P 500 is up 10% year-to-date, powered by the ‘Magnificent Seven’ giants whose foreign-heavy revenues are being boosted by the weaker dollar
Concentration in the top 10 stocks is at its highest since the 1960s, with earnings strength—83% of companies beating estimates—driving sentiment,” said Convera’s Kevin Ford in a note to clients this morning
The vast wave of capex spending generated by those companies—on data centers, servers, software, and other types of IT kit—is showing up in the macro data too
AI spending has added half a percentage point to GDP growth in the first half of this year, according to Samuel Tombs and Or Allen of Pantheon Macroeconomics
Pantheon Macroeconomics “We estimate that GDP would have grown at a mere 0.6% annualized rate in the first half were it not for AI-related spending, ly weaker than the reported 1.1%
Big ’s plans to continue spending aggressively on AI over the next few years suggest a similar boost over the rest of 2025 and into 2026.” The pair’s estimate is similar to that of Substacker Jens Nordvig, who estimated that AI capex would reach 0.7% of GDP growth this year
While it’s difficult to estimate how much all this spending is worth, it’s certainly in the hundreds of billions of dollars
Pantheon’s charts show spending on all types of computers and IT kit apaching something the better part of $1 trillion this year
Here’s a snapshot of the action prior to the opening bell in New York: S&P 500 futures were flat this morning, premarket, after the index closed up 0.32% yesterday, a new record high
STOXX Europe 600 was up 0.2% in early trading
The U.K.’s FTSE 100 was flat in early trading
Japan’s Nikkei 225 was down 1.45%
China’s CSI 300 was flat
The South Korea KOSPI was flat
India’s Nifty 50 was flat
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