Here are the takeaways from today's Morning Brief. sign up Every morning you will receive the following message in your inbox:
Today's takeout is julie hyman,anchor.
“2023 was spent asking questions about AI. 2024 is the year to find the answers.”
That's what Brent Till of Jefferies wrote in a note to investors last month.
If 2003 was the “year of hype” for AI, he said in an interview with Yahoo Finance, “2024 would be the start of implementation and 2025 would be the year you actually start making money.”
We've heard from many strategists about this brief. We are now in the “show me” phase of AI.
Mr. Till was mostly talking about the technology companies he covers, including Alphabet and Amazon. While the AI-driven rise in demand from his Nvidia and Big Tech seems clear, or at least clearer, the broader ramifications are only beginning to be understood and quantified.
The initial consumer-driven enthusiasm for generative AI spurred by the public release of ChatGPT has given way to a more pragmatic view of the new wave of AI.
Take Coca-Cola (KO) as an example.
The beverage giant just announced it will pay Microsoft $1.1 billion over the next five years and plans to use Microsoft's Copilot to improve productivity.
“The company is now using Azure OpenAI Service to help its employees improve customer experiences, streamline operations, drive innovation, gain competitive advantage, increase efficiency, and discover new growth opportunities. “We are considering the use of AI-powered digital assistants,” Coca-Cola said. In a statement.
Jim Davis, CEO of Quest Diagnostics (DGX), gave a specific example of how AI is being used during his company's conference call: For example, we are developing what we call the digital front door. It uses AI on its website and at service center kiosks to answer basic patient questions, reducing phlebotomist workload and calls to customer service teams. ”
Enterprise software packages are certainly expensive for businesses, but they may not provide the dramatic changes in productivity that some investors expect. (We're talking about soft drink companies and consumer medical testing services!) But better software could make some of those busy jobs smoother, better, and cheaper. not.
Additionally, the demand for AI is having ripple effects in other seemingly unrelated industries.
Halliburton (HAL) CEO said on the earnings call: “Clearly, AI consumes more power than traditional data centers. This is a long-term trend that demands more power, and that can only be good for our industry and Halliburton. .”
It's clear that companies are still talking about AI. According to FactSet, 179 S&P 500 companies cited “AI” in their fourth-quarter earnings calls, compared to 120 in the first quarter of 2023. The tally from March 15th to Monday was 23 companies. Big Tech numbers.
But the tone of what they're saying is changing. Investors should be careful.
For the latest stock market news and in-depth analysis of price-moving events, click here.
Read the latest financial and business news from Yahoo Finance