The quarterly results of Big Tech giants are imminent, offering a glimpse into the bankability of artificial intelligence and the sustainability of major investments in this technology. Analysts are optimistic about the growth and earnings that AI revolution is causing, with double-digit growth projections for heavyweights like Microsoft and Google. However, latecomer Apple is only expected to see a three percent growth due to its recent foray into the AI space.
Apple, which recently unveiled its Apple Intelligence system, is expected to see an improvement in China sales. However, the impact of these new features may not be felt until the launch of the iPhone 16 in September. Analysts are closely monitoring Apple’s forecasts for the current quarter to assess its momentum in the AI market.
Meta, previously Facebook, has raised its investment projections significantly in AI, leading to expected growth deceleration through the end of the year. The increase in spending on AI, coupled with other investments, will likely put earnings under pressure for the company.
Microsoft and Amazon, on the other hand, are expected to continue reporting strong results, especially in their cloud businesses. Microsoft, in particular, has been quick to implement generative AI across its products and aims to monetize it effectively. Amazon’s AWS, the world-leading cloud business, is well-positioned to capture a large share of the AI demand.
Google parent Alphabet’s future appears less clear due to its search business and skepticism around its AI Overviews feature. This feature, which has faced criticism for providing inaccurate or dangerous information, raises concerns about the evolution of advertising on the internet. Many content creators fear a decline in revenues if Google continues to prioritize AI-generated content over traditional links.
The future of artificial intelligence in Big Tech is promising yet challenging. While some companies are well-positioned to capitalize on AI’s potential, others face hurdles in implementation and market acceptance. The upcoming quarterly results will provide valuable insights into the role of AI in shaping the strategies and earnings of tech giants in the long term.
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