Today, Alphabet and Microsoft are set to report their quarterly results, and all eyes are on the impact of their investments in new AI technology on their growth. Both companies have been early adopters in the AI space, which has greatly benefited them.
Microsoft, in particular, has seen significant growth due to its investments in OpenAI and the integration of generative AI into its products. Services like Bing have gained popularity, contributing to Microsoft’s worth rising by about 44% this year.
Alphabet has followed a similar path, investing in generative AI companies and incorporating the technology into its own suite of products, including its core search product.
The positive investor attention surrounding large language models (LLMs), which power generative AI services, has also benefited tech giants worldwide. AI prominence has become a new measuring stick for these companies, with investors keen on ensuring they are not left behind by generative AI. Any evidence of an AI edge is enough to send shares soaring.
Tech stocks have generally performed well this year, with Alphabet’s stock rising by 36% and a popular basket of cloud stocks up 32%. The Nasdaq Composite has also gained 35%, while Meta’s shares have skyrocketed by a shocking 134% in 2023.
However, despite the tech rally, there are concerns about a looming recession and the possibility of the Good Times coming to an end.