“AI might facilitate growth over the foreseeable future, but I’m not sure most big tech stocks have much to show for it yet,” said Dan Taylor, who oversees about US$40 billion as chief investment officer of Man Numeric. “Any clarity they give about the likely impact over 2024 or 2025 will be crucial. Expectations are very high, and if the outlooks don’t support that, then we could see some issues with the stocks.”
For about a year, investors have bid up megacap tech shares on the theory that their exposure to artificial intelligence will usher in a new era of elevated growth and efficiency. Now the companies need to prove it.
Microsoft Corp and Alphabet Inc, two of the biggest players in AI-related software, will report after the market close, and Wall Street wants a stronger sense of when the rally-driving technology will start moving the needle for earnings and revenue. Both stocks have been supported by AI excitement; Microsoft is above a historic US$3 trillion valuation, while Google’s parent company returned to all-time highs.
