It can be said that Microsoft, Google and AMD have put more effort into integrating AI technology and products than almost anyone else, but they have found it difficult to please investors.After the three technology giants announced their results and guidance for the final three months of 2023, their stock prices fell after the market closed on Tuesday.They painstakingly emphasized the progress made in artificial intelligence. AMD expected sales of its newly launched AI processors to be higher than expected, Microsoft emphasized users' love for its AI assistant, and Google said AI technology was improving search and cloud computing services.
Investors have pushed the companies' shares to record highs in recent weeks, betting that the artificial intelligence boom will quickly boost earnings, but information from the companies on Tuesday was insufficient to meet investor expectations.
“Companies have to continually prove themselves and continually demonstrate the value of artificial intelligence,” said Katrina Dudley, a portfolio manager and analyst at Franklin Templeton.
Microsoft and Google are two competitors in the field of artificial intelligence software and cloud computing. Most of the financial reports delivered good news, but they were still ignored by investors.
Thanks to demand for artificial intelligence products, Microsoft's quarterly revenue hit its largest increase since 2022. Azure cloud service revenue increased by 30%, Microsoft Chief Financial Officer Amy Hood said, 6% of which was related to AI demand, higher than the 3 percentage point contribution in the previous quarter. UBS analyst Karl Keirstead called the performance "quite outstanding" during a conference call with company executives. Microsoft did not disclose how much artificial intelligence is expected to contribute to Azure cloud services in the current quarter.
Despite momentum, Microsoft shares fell after hours. Angelo Zino, an analyst at CFRA Research, said Wall Street wants a clearer understanding of how much artificial intelligence will contribute to future financial performance. "Investors are looking to these companies to quantify the potential of artificial intelligence in the coming years," he said.
But Microsoft won't follow the development model of artificial intelligence processor maker Nvidia.
Nvidia's sales are exploding. "In terms of artificial intelligence's contribution to Microsoft, this is not the way it will develop," Zino said. "The process is slower than some people expected."