Key takeaways
- Artificial intelligence (AI) is expected to be a key theme for big tech’s upcoming earnings.
- Meta Platforms is expected to report earnings on Wednesday, while Google parent Alphabet and Microsoft will do so on Thursday.
- Analysts expect Meta to provide an update on how the company leverages AI to power its platform’s recommendation and ranking engines, as well as its recent AI assistant expansion, Llama 3, and its new AI chip.
- Google is expected to provide updates on its initiatives such as monetizing AI in its enterprise offerings, as well as other guidance on how the company leverages AI.
- Microsoft will likely offer investors insight into the company’s AI plans through its OpenAI partnership, including Copilot and cloud impacts.
Like the excitement around artificial intelligence (AI) has caught the attention of investors, emerging technology is expected to be a priority in upcoming big tech earnings reports. Metaplatforms (META) is expected to report earnings on Wednesday, while Google parent Alphabet (GOOGLE) and Microsoft (MSFT) will report on Thursday.
NVIDIA (NVDA) has established himself as one of the first leaders of the AI era, even recording the biggest jump in a single day In market capitalizationbut analysts expect the next wave of AI optimism to benefit a variety of fields. technology stocks.
“While the first wave of the AI revolution is led by the godfather of AI, Jensen and Nvidia, alongside Nadella/Redmond… now the 2nd/3rd/4th derivatives of these trillion spending dollars over the next decade hits the tech sector’s shores,” wrote analysts at Wedbush Securities.
Analysts noted that the company expects “first quarter results to be a major positive catalyst for the technology sector,” citing Microsoft, Alphabet and Meta, among others, as the most notable.
Updates to Meta After AI Assistant and Chip News AI-powered recommendation and ranking engines
Meta, which is expected to report Wednesdayis expected to offer updates to its AI-based recommendation and ranking engines as well as its new AI initiatives.
CFRA analysts wrote that the company expects the company’s next earnings report to demonstrate strong AI-driven engagement. “META offers many AI-related opportunities,” the analysts write, highlighting how the company has leveraged technology for content discovery across its platforms, its AI model, Llama, and its assistant of AI, Meta AI.
Meta announcement Meta AI expansions a week before its earnings report. The AI assistant is integrated with Facebook, Instagram and WhatsApp and runs on Meta’s most advanced AI model, Llama 3.
The company also has recently revealed its latest custom AI chip, the Next Gen Meta Training and Inference Accelerator (MTIA), which could support its efforts to compete with Microsoft, Google and Amazon (AMZN) in the ongoing race to AI.
Updates from Google on AI monetization and initiatives like Gemini and custom chips
Google parent company Alphabet will release its report on Thursday, with analysts monitoring any AI-related updates.
Alphabet recently shared reached a record level at the Google Cloud Next conference, as the company made a slew of AI-related announcements, including Gemini updates, its new custom chip, the Google Axion processorAnd Nvidia Blackwell arrives on Google Cloud.
CFRA analysts said they “see additional opportunities related to AI monetization” for the company through cloud, search, YouTube and other Google businesses. AI monetization across company business segments was a key theme of big tech earnings last quarter.
Bank of America analysts said AI is an asset for Google, noting that while “the use of AI presents long-term competitive risks for Google,” in 2024, “Google (and its peers) ) will likely see improvements in AI monetization.”
AI integrations expected to boost Microsoft’s cloud sales and expand enterprise customer offerings
Microsoft is also expected to provide updates on its AI projects and their impacts on the company’s finances. The tech giant has positioned himself as one of the first leaders in AI with his Partnership with ChatGPT OpenAI creator.
Analysts said they expected a boost from AI contributions to Microsoft. CFRA analysts said the company expects greater contributions and momentum from AI, writing that AI “will support double-digit growth through the year 2025 and potential for multiple expansion.
They added that Microsoft is well-positioned for AI-driven growth because the company “can monetize AI-related revenue faster than any other cloud/software provider,” particularly through Microsoft’s OpenAI partnership. the company.
Bank of America analysts said “the next catalyst for the stock will be evidence of accelerating key AI product cycles, such as the M365 co-pilot, in the coming quarters,” adding that the company considers Microsoft as a “first choice”.
Wedbush analysts said they “strongly view this as Microsoft’s ‘iPhone moment’ with AI poised to change the trajectory of cloud growth in Redmond over the next few years.” They added that they believe the deployment of Copilot, Microsoft’s AI assistant, could add between $25 billion and $30 billion to the company’s revenue by 2025.
