The artificial intelligence boom has undoubtedly made its mark on the stock market, but is this transformative technology delivering the economic boost that many are hoping for? Not yet, according to Capital Economics, as the productivity boost is still narrowly confined to the tech sector and there still a ways to go until claims of a decade-long productivity miracle are justified.

"The AI boom that has been driving the stock market for several years is now clearly evident in economic activity too,” Analysts at Capital Economics said in a recent note, with ICT industries, particularly computer hardware, software, and data processing, contributing almost 0.9% to U.S. GDP growth in the first half of 2025, nearly double their average in the past decade.

The analysts attribute this acceleration mostly to AI-related innovation and investment, especially as annual growth rates of investment in computer hardware and data centers hit roughly 40% year-over-year. “Software investment contributed an average of 0.5% to annualized GDP growth in the first half of this year, which is slightly bigger than the contribution from computer hardware investment,” the economists added.

Yet, the AI uplift is not yet broad-based. Outside the ICT core, evidence of an AI-driven productivity surge remains elusive. Labor productivity has picked up in ICT industries amid rising output and declining employment, but similar gains have not spread to sectors such as healthcare, finance, real estate, or education.

The expected trickle-down to other major service sectors is not yet visible, Capital Economics warns, noting that surveys of firms show adoption is rising but remains well below 15% in non-ICT industries. The ICT boom itself has not been a big engine of job creation, and cuts are outpacing gains: “ICT industries have also been shedding employees, which points to a marked acceleration in productivity growth.”

The rise in output despite the shrinking workforce in tech as overall payroll growth sags below 50,000 per month "suggest that the ICT services sectors are currently experiencing an AI-related boom in productivity,” it added.

The fall in prices for tech goods and services, meanwhile, have subtracted an unusually large 0.5% from the GDP deflator so far this year, further underlining the role of tech-driven deflation. But outside this pocket, price trends in the wider services economy remain unchanged, suggesting the AI effect is not yet system-wide.

In a caution take, Capital Economics believes that much of the recent U.S. productivity gains could be “a cyclical response to post-covid labor market tightness,” rather than a structural AI-powered transformation.

The real test for AI’s economic promise, the economists believe, “will be whether adoption expands into larger, less tech-centric sectors representing close to 40% of U.S. GDP.”

Despite elevated stock market valuations and a tech investment surge, Capital Economics sees the U.S. still in the “early stages of the AI boom.” They warn, however, that forecasts of a decade-long productivity miracle are premature, as “sustaining a boom for two quarters is very different to sustaining it for a full decade"

For now, AI’s role in lifting U.S. growth remains early, cyclical, and still mostly confined to ICT and cloud, and the broader economic payoff is yet to truly materialize.