The quarterly earnings of major technology companies provide insight into the economic benefits of artificial intelligence (AI) and the long-term sustainability of significant investments in this technology. Analysts at Wedbush Securities predict that AI-driven transformations will accelerate profit growth for industry leaders like Microsoft and Google, expecting double-digit percentage increases. Conversely, Apple, which has been slower to embrace AI, is projected to see only a 3% rise in profits.

Apple recently introduced its Apple Intelligence system, but its impact is anticipated to be minimal until the release of the iPhone 16 in September, which will feature AI capabilities across all models. Analyst Angelo Zino of CRFA notes that while Apple’s AI advancements will take time to materialise fully, other tech giants are already reaping the rewards.

Meta has significantly increased its AI investments, channelling billions into semiconductors, servers, and data centres necessary for developing generative AI technologies. However, CRFA predicts that Meta’s revenue growth may slow by year-end due to these substantial AI expenditures.

Microsoft, expected to report its earnings on July 30, has invested $13 billion in OpenAI, the company behind ChatGPT, positioning itself well to capitalise on AI in content creation. Despite this, Jeremy Goldman of eMarketer emphasises that Microsoft needs to meet market expectations but believes it has the necessary time and support.

Amazon’s earnings, due on August 1, will be scrutinised for indications that its Q1 growth, driven by its cloud services arm AWS, can be sustained. Investors are keen to see whether AWS’s performance represents a consistent trend or a one-time spike.