AI's Effect on Industry Margins 📈

What We’re Showing

This graphic shows AI's effect on industry margins over the next five years, based on analysis from the Bank of America Institute.

Methodology

To examine AI's impact on margins, BofA Global Research analysts looked at roughly 3,400 companies with a combined market cap of about $90 trillion. Figures represent the relative change in margins, where 5% indicates an operating margin increase from 20% to 21%.

Key Takeaways

• Over the next five years, artificial intelligence could fuel margin expansion in 23 out of 25 industries, with the greatest impact on software and semiconductor companies.
• For semiconductor firms, AI-driven revenues could increase by 34% over this period.
• Across S&P 500 companies, AI-related cost savings could equal up to $55 billion annually.