Alphabet, IBM, Meta, and Microsoft all reported earnings last week. A key takeaway: The more times you mention AI on your call, the more your revenues grow. We jest, but the correlation, if not causation is there.
- Meta – AI mentions: 90. Revenue growth: 27% (to $36.5 billion.)
- Microsoft – AI mentions: 77. Revenue growth: 17% (to $61.9 billion.)
- Alphabet – AI mentions: 64. Revenue growth: 15% (to $80.5 billion.)
- IBM – AI mentions: 62. Revenue growth: 1% (to $14.5 billion.)
Such lightly facetious observations aside, AI, as well as helping vendors add gloss to product suites, is pulling through real customer spending.
One hyperscaler executive recently said it as bluntly as we have heard it.
Speaking to The Stack in a conversation that wandered into the “on guidance” territory this month, they said: “We’ve been very good at getting customers to sign up for large financial commitments.
“That ends up in ‘backlog’, which is basically things that have been committed financially and that aren't necessarily running today. AI can contribute to that [deployment of committed spend], because it's going to burn… It’s going to spin dials, as it were; in some cases a lot of dials.”
Those dials could be seen spinning in market reaction to earnings.
