Earnings season is here. So is AI mania.
To that end, the CE 100 Stock Index was up 4.4% through the past week, buoyed by Big Tech’s quarterly reports that showed — despite near term macro volatility — investments in advanced technologies continues unabated.
And year to date, the year-to-date performance has been a solid one — the group is up more than 21%.
The most outsized gains in the week were seen in C3.ai, and the stock roared 45% higher. The company said this past week that it was launching its first product: C3 Generative AI for Enterprise Search. And in terms of functionality, the tools will use “a natural language interface to rapidly locate, retrieve and present all relevant data across the entire corpus of an enterprise’s information systems.”
The company has said that the AI offering “will accelerate transformation efforts across business functions and industries, including supply chain, sustainability, reliability, CRM, ESG, aerospace, oil and gas,” among others.
Meta shares were up more than 22%, and the company had its own take on AI’s potential during its earnings report. As noted in our coverage this past week, the company is seeing more engagement with its apps — and sees potential to monetize that engagement.
CEO Mark Zuckerberg said that with the help of AI, Facebook and Instagram are “shifting” from being organized solely around people and accounts to a model that shows relevant content.
In the meantime, core user metrics are positive, even as ad revenues remain under pressure. The number of daily active people across the company’s family of apps — Facebook, Instagram, Messenger, and/or WhatsApp — was just under 3 billion in December, up 5% from last year.
The increased user engagement paves the way to embed commerce into a variety of everyday interactions.
The company’s “monetization efficiency,” as Zuckerberg put it, has doubled for Facebook in the past six months. Advertisers saw 20% more conversions than in the year before. More than 40% of the company’s advertisers are also using Reels, he said.
Google’s parent firm, Alphabet, gained 4.5% on the heels of its own earnings, where advertising revenue for the fourth quarter was down 3.6% from last year, to $59 billion.
CEO Sundar Pichai had his own take on AI, and said that Google Cloud is making AI available to enterprise customers through the company’s cloud AI platform, including infrastructure and tools for developers and data scientists. Google Cloud revenues were up 32% year on year to $7.3 billion.
And as for monetizing apps and other features, Pichai also noted on the call that it has introduced a revenue-sharing feature benefiting creators, through which they earn a percentage of revenues from ads viewed around the videos.
YouTube Shorts, he said, “are now averaging over 50 billion daily views, up from the 30 billion I announced on the Q1 2022 call.”
The company’s subscription business has grown across the music and premium content offerings, and now has surpassed 80 million subscribers, according to commentary on the call.
CBO Philipp Schindler said “we’re on a multi-year mission to make Google a core part of shopping journeys for consumers — and an invaluable place for merchants to connect with users,” he said. Within YouTube, he said, the company will continue to focus on “shoppable” YouTube. “It’s still nascent,” he said, “but we see lots of potential in making it easier for people to shop from the creators, brands and content they love.”
Apple gained nearly 6%. As reported by PYMNTS, hardware saw pressure and overall revenues were off 5% year on year in the latest quarter. But Apple services including payments and subscriptions showed strength in its fiscal 2023 first quarter. In that segment, the company hit an all-time revenue record of $20.8 billion in services.
CEO Tim Cook said that “we achieved double-digit revenue growth from App Store subscriptions and set all-time revenue records across a number of categories, including cloud and payment services. All told, Apple now has more than 935 million paid subscriptions.”
The Big Tech rallies helped drive the “Enablers” segment up 6.2% through last week.
Elsewhere, Peloton roared ahead 28.7%, and as spotlighted here, the company has said a focus on subscriptions, fitness as a service and third-party partnerships with Amazon and Dick’s are paying off.
While Peloton’s top-line revenue fell 30% to $792.7 million from a year ago, led by a 52% drop in fitness products sales, its subscription revenues were up 22%, we detailed. Pelton ended the quarter with 3.03 million Connected Fitness subscriptions. Average net monthly Connected Fitness churn for the quarter was 1.1%, “in-line with expectations,” per company commentary.
AI’s promise helped stir positive sentiment on the Street — now what remains to be seen is just how sustainable it all is.
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