AI trading will become center stage when the big tech revenue season begins
The tech revenue season begins in earnest on Wednesday. Google Parent Alphabet (Goog, googl)) Report Results after Bell. And two favourite letters on Wall Street dominate the conversation again: ai
From continuing CAPEX spending to questions about whether or not these huge cash outlays are driving new revenue streams, AI seems to be talking to all investors and analysts. However, large tech companies have come to Microsoft’s (msft)Relationship with Openai (Opai.pvt) Apple’s (aapl) Continuous AI troubles.
And ai darling nvidia (NVDA) There are plenty of news and announcements to tentatively track without reporting revenue until August 27th, leaving more than a month of the most predicted disclosure of the season. And it certainly creates a busy revenue cycle.
Billions of dollars in Big Tech’s investment in AI data centers have driven Nvidia’s huge growth over the past few years, but Wall Street sees how much its spending is paying off.
Amazon’s (amzn) Last Revenue Call, CEO Andy Jussy said that the company’s AI business “has a multi-billion dollar annual revenue drive rate and continues to triple digits of year-on-year, and is still very early on.”
Furthermore, Jassy believes that before the latest generation of AI, AWS could become a $100 billion run-rate business, and now believes it can grow beyond that. However, Amazon needs to show off exactly what it’s getting there to keep investors happy when it reports on July 31st.
Google, reporting today and Microsoft, reported on July 30, must prove that their AI plans are paying dividends. Google has added the Gemini model to its workspace productivity software and its entire search product, including AI overviews and AI modes.
During the company’s first quarter revenue call, Senior Vice President and Chief Business Officer Philip Schindler said that AI Summary Search monetizes at the same rate as standard search queries, leaving room for improvement. The company said that AI expansion and Google Cloud Platform Core products will also help drive a 28% increase in cloud segment revenue.
However, questions remain about how it successfully monetizes its AI mode offering and how to dodge the challenges from Openai, humanity (anth.pvt), and confusing (Peai.pvt).
Microsoft has benefited beautifully from its early investment in ChatGpt creator Openai. The company attributes its AI services to a 16% point growth rate in AZURE and other cloud services revenue.
However, for Microsoft and Openai, it’s not all sun and rainbow. Companies are at odds Openai is about how it should proceed with its plans to transform into a public benefits company, and what it means for Microsoft’s fairness in new organizations.
Then there’s meta (Meta), which stated that there have already been positive signs from AI investments, including longer user engagement and its advertising business.
“We are testing a new ad recommendation model for reels, which has already increased conversion rates by 5%,” CEO Mark Zuckerberg said in the company’s last revenue call. “And we’ve seen a 30% increase in advertisers who used AI creative tools last quarter.”
And the company does not allow spending. Last week, Zuckerberg said meta It will spend hundreds of millions of dollars In data centers that contain data centers the same size as the Manhattan Island mass, they drive what executives call “personal” superintelligence. We still can’t see what exactly that means. Hopefully, Zuckerberg will add clarity when it reports its results on July 30th.
Apple’s revenues will focus on selling iPhones as always, but investors are also looking for insights into CEO Tim Cook’s plans to expand his company’s AI capabilities. So far, Apple has reported on July 31st. We have deployed the Apple Intelligence platform It surpasses a wide range of hardware products, but with AI-powered Siri, it has not been able to impress Wall Street.
According to Mark Garman of Bloombergthe company is considering using third-party AI models to speed up Siri with the latest AI features, but there is no word from Apple about the potential move.
Meanwhile, Apple is a rival of Google and Samsung, releasing even more advanced AI features via Google’s Gemini AI, putting even more pressure on iPhone makers.
What exacerbates Apple’s AI problems is the fact that Apple is losing AI talent to its competitors. According to GarmanLuomming Pan, head of Apple’s AI model, left the company for meta. Two other Apple AI employees, Mark Lee and Tom Gunter, followed shortly thereafter.
While Apple is unlikely to announce a big AI plan during revenue calls, it will be interesting to see if Cook offers deeper insights into how Cook uses Apple Intelligence and how customers use overall satisfaction.
Nvidia CEO Jensen Huang was held in Paris on June 11th (Sarah Meyssonnier/Pool via AP) ・Associated Press
Nvidia is the main event of the revenue season
Nvidia concludes Big Tech’s revenue by reporting after the August 27 closure bell. It is difficult to exaggerate how big Nvidia’s revenue announcements have been. The company has surpassed Market capitalization of $4 trillion in July And it doesn’t seem to slow down any time soon.
Nvidia continues to drive the explosion in the construction of AI data centers, and companies like Xai regularly promote the number of Nvidia chips they are getting to build supercomputing projects. And it looks at a wider market opportunity as it expands to sovereign AI, which plans to sell thousands of AI chips to Saudi Arabia.
It would also be harmless to light sales to Chinese companies green after the Trump administration previously banned them. This should help offset the $4.5 billion writes they took in the first quarter with the White House’s initial sales ban and the $8 billion hit projected in the second quarter.
It all should have an interesting end to the revenue season and starts today.
Sign up for Yahoo Finance’s Week on Tech Newsletter. ・yahoofinance
Email Daniel Howley to dhowley@yahoofinance.com. Follow him on X/Twitter @DanielHowley.
