Experts place their biggest bets on artificial intelligence

• LHV’s Investor Community Manager Nelli Janson and investor Ivar Mägi thoroughly reviewed the tech giant’s performance and found a surprising weakness in Meta, namely that earnings per share did not reflect the true business performance. photo: Andras Clara / Ago Tamik

Last year, all stocks soared on the advent of artificial intelligence, and when the results were announced, no one was more interested in anything. Jensen said that this year the honeymoon period is over, and the market and investors are waiting for the real results because there has been a lot of money invested there. Jensen added that in many cases, it was obvious in the earnings conference calls that demand was still strong, but the process was long and would not happen overnight, and investors were not satisfied with this. Jensen said that before the results were announced, the stock prices of these giants were almost perfect, and there was not much room for error.

According to investor Ivar Mägi, today both Meta and Alphabet seem to use AI to run their applications, but specific additional services bring much less revenue, unlike Microsoft, which has been able to provide a variety of services to large companies. At the same time, Janson believes that if you want to bet on AI for the long term, Alphabet is one of the best choices.

Regarding Meta’s performance, Mägi pointed out a drawback, which is that it relies on only one business line – advertising revenue from its own applications. At the same time, the company plans to invest heavily in the direction of AI, and Meta’s managers believe that looking ahead, the risk of underinvesting in artificial intelligence is greater than the risk of overinvesting, so their spending may increase. Even more will increase next year. Mägile is concerned that earnings per share have increased, but the increase in advertising impressions worldwide is significantly smaller. Mägi said that the reason for the growth is the reduction in taxes.

Microsoft has the most products, the company uses artificial intelligence the most, and has the strongest long-term fundamentals. Janson added that Microsoft’s weakness after the earnings report was only temporary and it’s not worth looking for any problems in one quarter.

Ivar Mägi said that after the latest results are released, he would choose Microsoft among the technology giants because he believes that Microsoft has the best business prospects.

Guests analyze the second quarter results of US tech giants. We discuss the second quarter of Alphabet, Meta, Microsoft, Amazon, Tesla, and Apple, and which of them seems to have the most potential from the perspective of long-term investors.

The show is hosted by Jan Martin Lake.