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Applied AI·October 22, 2026·1 min read

AI Spending Faces the Profit Test

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The market is shifting from rewarding AI capex stories to demanding earnings leverage—Magnificent Seven concentration plus rising costs is forcing a ‘show me the margin’ phase. If you own an AI budget, assume 2026–2027 reviews will require hard ROI narratives and be ready to reclassify some experiments as sunk cost, not strategic inevitabilities.