Profit: 7 vs 493

That's the S&P 500 split in two, in a chart from Apollo's chief economist Torsten Slok (24 Oct).

• Magnificent 7 (Apple, Microsoft, Alphabet, Nvidia, Amazon, Meta, Tesla): profit margin about 11% in 2015, about 30% now.
• The other 493 companies: about 8% in 2015, about 10% now.
• Slok's point: AI is lifting profits at the companies that sell it, with no sign yet of it lifting margins anywhere else.

The catch: headlines called this "zero payoff". That's too strong. The 493 still grew their profits 22.8% in the second quarter (FactSet). Their sales grew; the share they keep from each dollar didn't.

Why it matters: four of the seven report this week (Alphabet, Microsoft, Amazon, Meta). Slok says the AI story will be decided in the 493, not the seven.

The margins are read off Apollo's chart, so they're rounded. Adding up the seven's last four quarters ourselves gives about 34%, partly boosted by one-off investment gains.