Technology giants that want to spend big on artificial intelligence and stay in the good graces of investors should take a page out of Meta Platforms Inc.’s playbook.
The Mark Zuckerberg run company has seen its shares gain 13% this month, far outperforming Big Tech peers despite reporting another jump in capital expenditures and pledging to spend even more going forward. The stock settled on Wednesday less than 1% short of its record closing price from last month.
The difference for Meta is that Zuckerberg did a better job of convincing investors that AI is helping to improve results in its core business — digital advertising. The AI boost for others like Amazon.com Inc., Microsoft Corp. and Alphabet Inc. hasn’t been as well articulated.
“It was his best earnings call as a public CEO,” said Gene Munster, managing partner of Deepwater Asset Management. “He explained the near-term benefits of AI, the long-term benefits and the timing of how all this is going to play out. And he did it in a compelling way.”
Alphabet shares have fallen 9% following its July 23 earnings report, while Microsoft is roughly flat since its results were released on July 30.
“Google sort of said, ‘Well, we have to spend money to keep up with everyone,’ which didn’t really sell it very well,” said Alec Young, chief investment strategist at Mapsignals. “Microsoft sold it a little better. They’re effectively doing the same thing.”
