Last update: Monday 8/5/24
AI Robot in a Bubble (The Atlantic)
A. TL;DR summary of top stories
Introduction
When the editor of this blog asked ChatGPT/GPT-4o to summarize last week's top story about the market's reaction to Big Tech's latest quarterly reports, with emphasis on Big Tech's massive investments in GenAI, he was pleasantly surprised to find that the chatbot's summaries were much better than his own drafts. Of course, he had to modify his prompts a few times before the chatbot returned responses that were all based on late July or early August 2024 reports and included consistent values for the market metrics it cited ... :-)
1) AI Big Tech quarterly earnings reports
- Microsoft Question: How did the market react to Microsoft's July 2024 quarterly report? Only use sources that were published in late July 2024 or early August 2024. Be sure the values you cite are consistent from one paragraph to the next.
ChatGPT's response and the sources it cited:
"The company achieved $64.7 billion in revenue, which surpassed the analyst expectation of $64.4 billion. The earnings per share (EPS) came in at $2.95, slightly above the consensus estimate of $2.90, but below the EPS whisper number of $3.01... "
-- "Microsoft (MSFT) Q4 2024 earnings results beat analyst expectations, miss EPS whisper number", Donovan Erskine, ShackNews, 7/30/24
-- "Press Release & Webcast", Microsoft Investor Relations, 7/30/24
"Despite these solid results, the market reacted negatively due to the miss on the EPS whisper number and concerns over the cloud segment’s performance. Microsoft’s cloud revenue grew by 21% to $36.8 billion, which was short of the anticipated $37.2 billion ..."
-- "Microsoft (MSFT) Q4 2024 earnings results beat analyst expectations, miss EPS whisper", Donovan Erskine, ShackNews, 7/30/24
-- "Microsoft Announces Q4 FY 2024 Results", HPC, 7/31/24
DOWN ... "Consequently, Microsoft’s shares fell more than 5% in after-hours trading, dropping from $422.92 to as low as $395.70 ...",
-- "Microsoft (MSFT) Q4 2024 earnings results beat analyst expectations, miss EPS whisper", Donovan Erskine, ShackNews, 7/30/24
BackToTop - Alphabet Question: How did the market react to Alphabet's July 2024 quarterly report? Only use sources that were published in late July 2024 or early August 2024. Be sure the values you cite are consistent from one paragraph to the next.
ChatGPT's response and the sources it cited:
Alphabet's report revealed "a revenue of $84.74 billion, which represents a 14% increase compared to the same period last year ... "
-- "Google parent company Alphabet brought in $84.74 billion in revenues for Q2 2024", John Callaham, Neowin, 7/23/24
"Google Search generated $48.50 billion in revenue, up from $42.63 billion in Q2 2023. For the first time, Google Cloud’s revenue exceeded $10 billion, coming in at $10.35 billion, significantly up from $8.03 billion the previous year..."
-- "Alphabet reports Q2 2024 revenue of $84.7 billion", Abner Li, 9to5Google, 7/23/24
-- "Alphabet reports 14% increase in revenue for Q2 2024, meets most analyst expectations", Shruti Shekar, AndroidCentral, 7/23/24
UP ... "The market reacted positively to Alphabet’s financial performance, with the company’s stock price rising by over 1% in after-hours trading ..."
-- "Google parent company Alphabet brought in $84.74 billion in revenues for Q2 2024", John Callaham, Neowin, 7/23/24
BackToTop - Meta Question: How did the market react to Meta's July 2024 quarterly report? Only use sources that were published in late July 2024 or early August 2024. Be sure the values you cite are consistent from one paragraph to the next.
ChatGPT's response and the sources it cited:
"The company posted revenue of $39.07 billion, surpassing the consensus estimate of $38.26 billion, and a year-over-year increase of 22.1%. The earnings per share (EPS) came in at $5.16, significantly beating the expected $4.70 ..."
-- "Facebook (META) Q2 2024 earnings results beat EPS and revenue expectations", Donovan Erskine, ShackNews, 7/31/24
-- "Meta Reports Second Quarter 2024 Results", Meta Investor Relations, 7/31/24
-- "Meta Platforms (META) Earnings Date, Estimates & Call Transcripts", MarketBeat, 7/31/24
"The robust performance was driven by continued growth in Meta’s core businesses, including strong contributions from its AI initiatives and the success of products like the Ray-Ban Meta AI glasses ..."
-- "Facebook (META) Q2 2024 earnings results beat EPS and revenue expectations", Donovan Erskine, ShackNews, 7/31/24
-- "Meta Reports Second Quarter 2024 Results", Meta Investor Relations, 7/31/24
UP ... "In response to the positive earnings report, Meta’s stock surged in after-hours trading, rising from $474.83 to as high as $498.50. ..."
-- "Facebook (META) Q2 2024 earnings results beat EPS and revenue expectations", Donovan Erskine, ShackNews, 7/31/24
-- "Meta Platforms (META) Earnings Date, Estimates & Call Transcripts", MarketBeat, 7/31/24
BackToTop - Apple Question: How did the market react to Apple's July 2024 quarterly report? Only use sources that were published in late July 2024 or early August 2024. Be sure the values you cite are consistent from one paragraph to the next.
ChatGPT's response and the sources it cited:
Apple reported "strong results that exceeded market expectations. The company achieved a revenue of $85.78 billion, up 5% year-over-year, surpassing the expected $84.5 billion. Earnings per share (EPS) were $1.40, beating the consensus estimate of $1.35 ..."
-- "Apple reports third quarter results", Apple Newsroom, 8/1/24
-- "Apple (AAPL) Q3 2024 earnings results beat EPS and revenue expectations", Donovan Erskine, ShackNews, 8/1/24
-- "Apple reports record Q3 2024 earnings with $85.78 billion in revenue", Chance Miller, 9to5Mac, 8/1/24
"The positive performance was driven by record-high services revenue and significant growth in iPad and Mac sales, which offset a slight decline in iPhone sales. Net income for the quarter was $21.45 billion, up from $19.88 billion a year earlier ..."
-- "Apple reports record Q3 2024 earnings with $85.78 billion in revenue", Chance Miller, 9to5Mac, 8/1/24
-- "Apple's Services Revenue Reaches Record High in Q3, Driving Earnings Beat", Naomi Buchanan, Investopedia, 8/1/24
MIXED ..."Despite the strong financial results, Apple’s stock saw mixed reactions in after-hours trading. Initially, the stock dropped to $216 before bouncing back to $220.83 and then stabilizing. This fluctuation reflects the market’s cautious optimism, given the broader economic uncertainties and competitive pressures ..."
-- "Apple (AAPL) Q3 2024 earnings results beat EPS and revenue expectations", Donovan Erskine, ShackNews, 8/1/24
-- "Apple's Services Revenue Reaches Record High in Q3, Driving Earnings Beat", Naomi Buchanan, Investopedia, 8/1/24
BackToTop -
Amazon Question: How did the market react to Amazon's July 2024 quarterly report? Only use sources that were published in late July 2024 or early August 2024. Be sure the values you cite are consistent from one paragraph to the next.
ChatGPT's response and the sources it cited:
Amazon's report showed mixed results "... The company reported a revenue of $148 billion, which missed the expected $149 billion. However, earnings per share (EPS) were $1.26, significantly surpassing the consensus estimate of $1.03 ..."
-- "Amazon (AMZN) Q2 2024 earnings results beat EPS expectations, miss revenue estimates", Donovan Erskine, ShackNews, 8/1/24
-- "What We Learned From Amazon's Latest Quarterly Update", Aaron McDade, Investopedia, 8/1/24
DOWN ... "Despite the strong EPS performance, the revenue miss led to a negative market reaction. Amazon’s stock dropped sharply in after-hours trading, falling from $183.90 to as low as $173.85. ..." -- "Amazon (AMZN) Q2 2024 earnings results beat EPS expectations, miss revenue estimates", Donovan Erskine, ShackNews, 8/1/24
-- "Amazon.com Announces Second Quarter Results", BusinessWire, 8/1/24
"On a positive note, Amazon Web Services (AWS) continued to be a significant growth driver, with a 19% year-over-year increase in revenue. Analysts remain optimistic about AWS’s future prospects, expecting continued demand for cloud and AI-related services to fuel growth in the second half of the year ..."
-- "What We Learned From Amazon's Latest Quarterly Update", Aaron McDade, Investopedia, 8/1/24
-- "Amazon.com Announces Second Quarter Results", BusinessWire, 8/1/24
2) Has Big Tech over invested in GenAI? Are we in a bubble that's about to burst?
The growing consensus among pundits about the answers to these questions is succinctly captured by the titles of the following recent articles in some prominent publications:
- "Big Tech’s AI Promises Become a ‘Show Me’ Story For Investors", Bloomberg
- "This Week in AI: Companies are growing skeptical of AI’s ROI", TechCrunch
- "The Generative-AI Revolution May Be a Bubble", The Atlantic
- "AI bubble: Tech stocks plummet with another potential 25% drop, Fortune
- "Elliott says Nvidia is in a ‘bubble’ and AI is ‘overhyped’", Financial Times
B. Top 2 stories in past week ...
- OpEds+Misc
AI Big Tech quarterly earnings reports ***
+++ Alphabet/Google ...
"Alphabet Reports 29% Jump in Profit as A.I. Efforts Begin to Pay Off", Nico Grant, NY Times, 7/23/24
-- This story also covered by Yahoo!/finance, Reuters
+++ Microsoft
"Microsoft shares dip as cloud miss overshadows better-than-expected revenue and earnings", Jordan Novet, CNBC, 7/30/24
-- This story also covered by Reuters, yahoo!/finance, Barron's, NY Times ... and Microsoft
+++ Meta
"Meta’s Upbeat Earnings Buy Time for AI Investment to Pay Off", Kurt Wagner, Bloomberg, 8/1/24
-- This story also covered by NY Times, Forbes, Business Insider, Wall Street Journal, CNBC
+++ Apple
"Apple Reports Record June Earnings Despite Worst iPhone Sales In Years", Derek Saul, Forbes, 8/1/24
-- This story also covered by yahoo!/finance (video), Reuters, ... and Apple
+++ Amazon
"Amazon shares slide on revenue miss, disappointing guidance for third quarter", Annie Palmer, CNBC, 8/1/24
-- This story also covered by yahoo!/finance, Business Insider, - OpEds+Misc
Has Big Tech over invested in GenAI? Are we in a bubble that's about to burst? ***
-- "Big Tech’s AI Promises Become a ‘Show Me’ Story For Investors", Carmen Reinicke, Bloomberg, 8/3/24
-- "This Week in AI: Companies are growing skeptical of AI’s ROI", Kyle Wiggers, TechCrunch, 7/31/24
-- "The Generative-AI Revolution May Be a Bubble", Matteo Wong, The Atlantic, 8/2/24
-- "AI bubble: Tech stocks plummet with another potential 25% drop, analysts warn", Paolo Confino, Fortune, 8/2/24
-- "Elliott says Nvidia is in a ‘bubble’ and AI is ‘overhyped’", Laurence Fletcher and Costas Mourselas, Financial Times, 8/2/24
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