Meta Platforms (META, Financials) and Amazon (AMZN, Financials) lead in AI investment returns among major tech firms, according to D.A. Davidson analysts Gil Luria and Alex Patt.
Meta’s open-source AI strategy fuels advertising expansion, attesting to a 19% increase on a 23% comparable growth attributed to improved ad value and price made feasible by artificial intelligence.
Luria and Patt underline even further Amazon’s strategy change in reallocating capital expenses from retail to Amazon Web Services, supported by the usage of proprietary processors to save costs. They saw a clear tipping point when investor worries regarding Amazon’s retail margins started to relax.
Commenting on Alphabet’s Google (GOOG, Financials), the analysts highlighted noted excellent results in its advertising and cloud divisions. Microsoft’s Azure, on the other hand, experienced sluggish expansion even with significant expenditures in its generative artificial intelligence divisionmore than $50 billionincluding OpenAI financing. Luria pointed out that Microsoft’s rising capital expenses double the yearly return-on-investment denominator.
Although Apple (AAPL, Financials) has not yet seen returns from AI investments, Luria and Patt hope advantages from the Apple Intelligence platform will show shortly.
As tech companies build data centers, Nvidia (NVDA, Financials) is a major supplier of artificial intelligence technology. Still, Luria sounded the alarm that investor patience would erode with the continuous funding flow from companies like Microsoft to Nvidia.
This article first appeared on GuruFocus.
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