Expectations are rising as the influence of Artificial Intelligence (AI) over the world of investment is set to manifest in the upcoming earnings reports of Meta Platforms (META), Alphabet (GOOGL), and Microsoft (MSFT). Nvidia (NVDA), an early AI pioneer, has made significant headway, but market analysts predict that the impending wave of AI optimism will diversify its beneficiaries across the tech sector.
Wedbush Securities analysts have surmised that the ripple effects of approximately $1 trillion AI spending will positively influence the tech sector in the next decade. They project that the 1Q earnings will stimulate the tech sector, with Microsoft, Alphabet, and Meta leading the pack.
Meta is projected to provide updates on its AI-powered platforms and new AI ventures. CFRA analysts anticipate that Meta's engagement stats will demonstrate considerable promise due to AI involvement. They emphasized the company’s exploitation of AI for content discovery, AI model Llama, and AI assistant Meta AI as substantial opportunities that Meta has in its possession. The company has further added features to Meta AI and demonstrated its custom AI chip - Meta Training and Inference Accelerator (MTIA), designed to give a tough competition to Microsoft, Google, and Amazon (AMZN) in the ongoing AI contest.
Alphabet, meanwhile, will present its earnings report on Thursday, and analysts are hoping for AI-relating updates. Analysts noted that Alphabet could utilise AI to enhance monetization across its various businesses, including cloud, search, YouTube, and others. Bank of America analysts posited that AI is a boon to Google, and expect AI monetisation enhancements from Google and its peers in 2024.
Microsoft, another AI frontrunner with its partnership with OpenAI and maker of ChatGPT, is projected to bring forward its AI endeavours along with their implications on the company's finances. CFRA analysts predict that AI will accelerate growth till CY 2025 and can offer multiple expansion opportunities. Microsoft, they opined, is in an excellent position to cash in on AI-driven growth significantly due to its alliance with OpenAI. They expect the Microsoft AI assistant Copilot deployment to contribute an additional $25 billion to $30 billion to the company's revenue by 2025.