With Alphabet and Microsoft reporting their quarterly results today, there’s going to be a lot of scrutiny on the ability of their investments in new AI tech to drive growth.
The two American tech giants have benefited from their early entrance into this space. Microsoft’s investments in OpenAI, its rapid integration of generative AI into various products, and the rising popularity of some of its services, like Bing, have greatly increased its worth — shares of Microsoft are up around 44% so far this year as of yesterday’s close.
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Alphabet is in similar waters. Like Microsoft, it has invested in generative AI companies, begun baking the tech into its own suite of products, and is even tinkering with its core search product.
Other tech giants around the world have also benefited from the positive investor attention as large language models (LLMs), which power generative AI services, have progressed quickly.
Indeed, investor attention has been so fixed on neo-AI technologies that you can easily surmise that for tech titans, AI prominence is the new measuring stick. Investors seem hell-bent on seeing evidence from major tech companies that they are not going to get left behind by generative AI, and demonstrations of any sort of AI edge are enough to send shares toward the ceiling.
Tech shares have generally appreciated this year — Alphabet’s stock has climbed 36% so far this year; a popular basket of cloud stocks is up 32%; and the Nasdaq Composite has gained 35%. Meta’s been doing quite well, with its shares up a shocking 134% so far in 2023.
All things considered, the tech rally this year has been overshadowed by fears of a looming recession and the end of the Good Times.
Source @TechCrunch
