Big Tech Earnings Spotlight: AI Takes Center Stage

As big tech gears up to announce its quarterly earnings, all eyes are on the role of artificial intelligence (AI) in shaping the future trajectory of these companies. Meta Platforms, Google's parent Alphabet, and Microsoft are poised to shed light on their AI strategies and initiatives during their upcoming earnings reports.

1. Meta Platforms (META): We expect Meta Platforms to unveil updates on its AI-powered recommendation and ranking engines on Wednesday, showcasing its recent advancements in AI technology. Analysts anticipate insights into how Meta is leveraging AI to drive engagement across its platforms. Of particular interest are Meta's new AI assistant, Meta AI, and its latest custom AI chip, the Next Gen Meta Training and Inference Accelerator (MTIA), as they signal Meta's commitment to innovation in the AI space.

2. Google (Alphabet): Alphabet will provide updates on its AI monetization efforts and recent initiatives such as Gemini and its new custom chip, the Google Axion Processor, during its reporting on Thursday. Analysts anticipate further integration of AI across Google's enterprise offerings, driving revenue growth through cloud, search, YouTube, and other business segments. Google's recent announcements at the Google Cloud Next conference underscore its focus on AI as a key driver of future growth.

3. Microsoft: Expected to showcase the impact of its AI projects on its financial performance, the company will also report on Thursday. With a strong partnership with OpenAI, Microsoft has positioned itself as an early leader in AI innovation. Analysts foresee AI contributions driving double-digit growth through 2025 and view Microsoft as well-positioned to monetize AI-related revenue. Analysts expect key AI product cycles, like M365 copilot, to serve as catalysts for future growth, comparing Microsoft's AI momentum to a 'iPhone Moment'.

As the AI revolution continues to unfold, big tech's earnings reports offer investors valuable insights into how these companies are capitalising on AI to drive innovation, growth, and shareholder value.