Introduction
Netflix Kicks Off Earnings Season
To kick off this earnings onslaught, Netflix Inc. will unofficially announce its earnings on Wednesday. However, all eyes are eagerly anticipating the reports from Google and Meta in the days that follow. Google is scheduled to release its fiscal second-quarter results on July 25, while Meta is set to report a day later.
AI’s Influence on Google
As the leader in search technology, Google stands at the forefront of AI advancements. According to Morgan Stanley analyst Brian Nowak, the search landscape is expected to undergo a fundamental transformation driven by AI. However, he emphasizes that change will not happen overnight. In a recent note, Nowak reiterated his bullish stance on Google, citing three key AI success factors that position the tech giant to disrupt and improve its own business. With an overweight rating on Google shares and a price target of $150, Nowak remains optimistic about the company’s future.
Meta’s Pursuit of the Metaverse and AI
For Meta, AI plays a crucial role in its pursuit of the metaverse – a virtual universe where people can interact with one another through immersive technologies. Nowak acknowledges that while the immediate impact of AI on Meta may not be as profound, its long-term implications are significant. He anticipates Meta’s integration of new language models into its applications, which will unlock new possibilities for users and advertisers. However, Nowak also highlights that changing user behavior and achieving material success in online advertising are not guaranteed. Despite this, Nowak maintains an overweight rating on Meta shares with a price target of $350.
Looking Beyond the Hype
Amidst the AI hype, Nowak advises investors to remain focused on the long-term earnings potential of Google and Meta in 2023 and 2024. He acknowledges that AI continues to be a top concern for investors but cautions that the adoption curves for these technologies are often gradual rather than exponential. While AI brings forth exciting possibilities, its implementation and impact may take time to materialize fully.
In conclusion, the upcoming earnings season will undoubtedly revolve around AI, and Google and Meta are at the forefront of this revolution. As technology giants leverage AI’s capabilities, the true extent of its transformative power will become clearer in the years ahead.