A number of tech companies’ earnings reports released last week showed that: Palantir and arm We pointed out how AI is increasing revenue. That pleased investors, and both stocks soared afterward. After all, for all the hype about AI last year, only Nvidia and Microsoft were able to show how AI actually makes money.
As generative AI technologies continue to develop and be deployed by a wide range of technology companies this year, investors will look to differentiate between companies that are just telling a story about AI and those that are having real financial impact. said Gil Luria, who is deaf. Senior Software Analyst at financial services company DA Davidson.
In 2023, many companies gained trust from investors simply by talking about AI. Companies in the S&P 500 also cited AI in their earnings calls, hitting new highs for the year. But this year, investors will increasingly pressure companies to demonstrate how AI is actually impacting their finances.
Palantir and Arm show the way
Palantir stock soars 30% in one day The data management company announced last week that its generative AI product is bringing in revenue and new customers. Demand for large-scale language models CEO Alex Karp told investors on an earnings call that commercial business use of AI systems to power chatbots is “relentless.”
Also, Arm, the UK-based chip design company whose technology powers smartphones and PCs, has entered into long-term licensing deals with tech companies that are using cutting-edge CPUs to run their AI products. He said that revenue is increasing. Arm stock soars more than 55% Thursday after the quarterly earnings report.
microsoft and Amazon It also notes that AI demand continues to drive revenue for cloud businesses. Luria said six percentage points of growth in Microsoft’s Azure business came from AI, which equated to billions of dollars.
“Towards the end of the hype cycle”
So far, only a handful of companies have seen the benefits of AI in their performance this year.
“We move beyond the hype cycle and into a more realistic perspective that distinguishes between the few companies that will benefit from AI in the short term and all the rest whose businesses will be transformed by AI but will not. I’m going to do it.’ It’s not necessarily profitable,” Luria said.
The vast majority of tech companies won’t benefit from generative AI right away. However, this technology is expected to revolutionize business and work.
As generative AI tools mature and become more useful, Luria said the technology will improve productivity in white-collar jobs. AI tools are already helping people not only summarize and read content faster, but also write code faster, and that’s likely to get even better over time.
“Then everything will be fine. [white-collar workers] “It should have a big impact on the economy as a whole,” he said.
