AI stole the show this year, but earnings will drag Wall Street back to reality

Nearly a year ago, OpenAI released ChatGPT 3 into the world, and investors got visions of dollar signs in their heads as they imagined the ways that artificial intelligence could make big money for businesses.

Nvidia last quarter reported record earnings, including a 141% jump in revenue for its graphics chips used in AI infrastructure building up data centers. Nvidia, which reports near the end of earnings season on Nov. 21, posted record revenue of $13.5 billion last quarter and is expected to easily top that with $16 billion in the most recent quarter, a surge of 170% versus a year ago. Those estimates include $12.3 billion of revenue coming from data-center sales.

Super Micro is also riding the AI wave with its customized data-center servers that are designed to consume less power. But revenue in the September quarter is forecast to rise just 15% from a year ago and drop on a sequential basis, as supply constraints from Nvidia likely hampered Super Micro’s ability to meet all its demand.

In addition, when asked about AI, Apple CEO Tim Cook said the company views AI and machine learning “as core fundamental technologies that are integral to virtually every product that we build.” Those comments, though, can also apply to the bulk of tech companies, where AI is built into software as another layer to improve a product. Internet companies such as Meta Platforms Inc. META, +0.89% and Alphabet Inc. GOOG, +0.36% GOOGL, +0.

Earlier this year, the Information reported that OpenAI, the creator of ChatGPT and recipient of a hefty investment from Microsoft, has costs of up to $700,000 a day, because the massive amounts of computing power needed to run queries. In February, OpenAI launched ChatGPT Plus, for $20 a month, a service that will give subscribers access to its AI during peak times and faster response times.

Overall, the information-technology sector itself is expected to see anemic revenue growth this quarter. The consensus on FactSet forecasts a meager 1.35% revenue uptick in the third quarter, with earnings growth of 4.65%. FactSet’s estimates for IT companies exclude internet companies like Meta and Alphabet, which are under the category of communications/interactive media services.

Malaysia Malaysia Latest News, Malaysia Malaysia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Analysts are getting bullish on these corporate earnings slated for release this weekWall Street analysts predict that these companies will upsides following their quarterly earnings announcements this week.
Source: CNBC - 🏆 12. / 72 Read more »

Pfizer Says Wall Street Was Right On Covid MarketPfizer ratcheted down its guidance for this year, to a combined $12.5 billion from its Covid-19 vaccine and therapeutic.
Source: MarketWatch - 🏆 3. / 97 Read more »

Business Highlights: Ford chairman says UAW strike threatens company future; Wall Street makes gainsBusiness Highlights: A summary of the day’s top stories in the business world.
Source: AP - 🏆 728. / 51 Read more »

Stock futures tick up as Wall Street look towards busy earnings week: Live updatesStock futures rose slightly Monday as corporate earnings season begins to pick up.
Source: NBCNewYork - 🏆 270. / 63 Read more »

Stock futures tick up as Wall Street look towards busy earnings week: Live updatesStock futures rose slightly Monday as corporate earnings season begins to pick up.
Source: CNBC - 🏆 12. / 72 Read more »