QQQ   435.27 (-0.53%)
AAPL   181.42 (-0.66%)
MSFT   407.72 (+0.06%)
META   484.02 (-0.62%)
GOOGL   136.38 (-1.80%)
AMZN   173.16 (-0.22%)
TSLA   202.04 (+1.16%)
NVDA   776.63 (-1.32%)
NIO   5.44 (-6.05%)
AMD   176.54 (-0.82%)
BABA   74.60 (-3.96%)
T   16.96 (+0.77%)
F   12.30 (+2.50%)
MU   89.71 (-2.33%)
CGC   3.36 (-4.82%)
GE   155.62 (+1.06%)
DIS   110.81 (+1.27%)
AMC   5.00 (+3.95%)
PFE   27.06 (+0.59%)
PYPL   60.25 (+0.15%)
XOM   104.37 (+0.33%)
QQQ   435.27 (-0.53%)
AAPL   181.42 (-0.66%)
MSFT   407.72 (+0.06%)
META   484.02 (-0.62%)
GOOGL   136.38 (-1.80%)
AMZN   173.16 (-0.22%)
TSLA   202.04 (+1.16%)
NVDA   776.63 (-1.32%)
NIO   5.44 (-6.05%)
AMD   176.54 (-0.82%)
BABA   74.60 (-3.96%)
T   16.96 (+0.77%)
F   12.30 (+2.50%)
MU   89.71 (-2.33%)
CGC   3.36 (-4.82%)
GE   155.62 (+1.06%)
DIS   110.81 (+1.27%)
AMC   5.00 (+3.95%)
PFE   27.06 (+0.59%)
PYPL   60.25 (+0.15%)
XOM   104.37 (+0.33%)
QQQ   435.27 (-0.53%)
AAPL   181.42 (-0.66%)
MSFT   407.72 (+0.06%)
META   484.02 (-0.62%)
GOOGL   136.38 (-1.80%)
AMZN   173.16 (-0.22%)
TSLA   202.04 (+1.16%)
NVDA   776.63 (-1.32%)
NIO   5.44 (-6.05%)
AMD   176.54 (-0.82%)
BABA   74.60 (-3.96%)
T   16.96 (+0.77%)
F   12.30 (+2.50%)
MU   89.71 (-2.33%)
CGC   3.36 (-4.82%)
GE   155.62 (+1.06%)
DIS   110.81 (+1.27%)
AMC   5.00 (+3.95%)
PFE   27.06 (+0.59%)
PYPL   60.25 (+0.15%)
XOM   104.37 (+0.33%)
QQQ   435.27 (-0.53%)
AAPL   181.42 (-0.66%)
MSFT   407.72 (+0.06%)
META   484.02 (-0.62%)
GOOGL   136.38 (-1.80%)
AMZN   173.16 (-0.22%)
TSLA   202.04 (+1.16%)
NVDA   776.63 (-1.32%)
NIO   5.44 (-6.05%)
AMD   176.54 (-0.82%)
BABA   74.60 (-3.96%)
T   16.96 (+0.77%)
F   12.30 (+2.50%)
MU   89.71 (-2.33%)
CGC   3.36 (-4.82%)
GE   155.62 (+1.06%)
DIS   110.81 (+1.27%)
AMC   5.00 (+3.95%)
PFE   27.06 (+0.59%)
PYPL   60.25 (+0.15%)
XOM   104.37 (+0.33%)

Which stocks benefited from mentioning AI in their Q3 earnings?

AI stocks

Key Points

  • Companies continue to reference artificial intelligence in their earnings reports, but is it starting to lose its impact? 
  • Not surprisingly, tech companies are seeing the biggest positive impact from mentioning AI. 
  • AI is not a fad, but investors will have to be more discerning in 2024.  
  • 5 stocks we like better than Meta Platforms

Artificial intelligence (AI) has fueled impressive gains for many investors in 2023. But as we get ready to usher in a new year, some analysts and investors wonder if artificial intelligence is a bubble. One reason for their concern is the number of companies that mentioned AI during the second quarter earnings season. In the second quarter, there was a 365% quarterly increase in the number of companies that referenced AI in their earnings report. 

It seems that any company that had an AI-related offering, no matter how loosely defined, was making sure that Wall Street and Main Street knew about it. The tactic worked. Research from WallStreetZen showed a positive correlation between references to AI and a company's stock price. 67% of the companies that mentioned AI in their earnings report saw a gain in stock price. The average gain was 8.5%. 

Looking for substance over style 

However, it became evident that, for some of these companies, any connection to AI was more style than substance. So, heading into the third quarter earnings season, many analysts made it clear that a company would have to explain how, specifically, it was going to be able to monetize AI.  

Yet even with a higher bar to reach, many companies appear to be doing just that. WallStreetZen reported that the number of AI mentions in corporate earnings reports increased by 13% in the third quarter, and 58% of the mentions were positive, effectively unchanged from the prior quarter.  

But not all the news was positive. Although the number of mentions increased, the impact on a company's stock price seemed to be affected. Only 55% of technology companies saw an increase in their stock prices, down from 71%. And for non-tech companies, only 51% of companies managed a stock price increase, a decline of 14%.  

While this information may be interesting information to throw out at your next gathering with friends, what you really want to know is what stocks benefit from these references and which are not convincing investors? 

Big tech is the biggest winner 

It won't surprise you to see that the stocks posting the biggest gains were those of some of the biggest technology companies. In the second quarter, 71% of tech companies that mentioned AI saw their stock prices go up by an average of 11.9%.  


The two biggest winners were Adobe Inc. NASDAQ: ADBE, which posted a 38.2% share price increase, and Meta Platforms Inc. NASDAQ: META, which posted a gain of 37.6%. An honorable mention went to Match Group Inc. NASDAQ: MTCH

Conspicuously absent on that list is Nvidia Corporation NASDAQ: NVDA, which came in ninth place. However, in the most recent quarter, technology stocks once again led the way and this time, Meta Platforms and Nvidia were the biggest winners. 

Not every tech stock was a winner 

In the third quarter, Analog Devices Inc. NASDAQ: ADI and Alphabet Inc. (NASDAQ: GOOGL) were the two stocks that saw their stock price fall the most despite mentioning AI. The companies saw a decline in share price of 17.2% and 11.4%, respectively.  

Non-tech stocks have a much bigger burden of proof 

With a few notable exceptions like Carrier Global Corporation NYSE: CARR and Expedia Group Inc. NASDAQ: EXPE, stocks of non-tech companies haven't benefited as much from mentioning AI in their earnings reports. However, this broad category includes several sectors, including financial stocks, consumer discretionary stocks, consumer staples stocks, and information technology stocks. Many of these sectors have been underperforming the broader market regardless of an AI connection. 

How to view AI as part of your investment strategy 

Artificial intelligence is not a trend or passing fad. However, analysts are correct in believing that the burden of proof is now firmly on companies to answer the "So what?" question when it comes to AI. Simply having an AI offering is not going to be enough. Companies will have to show investors that customers are willing to pay for their AI capabilities – and, ideally, pay a premium for them.  

It's fair to say that 2024 may not see the explosive growth that was evident in 2023. But there's still room for the stock of many companies to move much higher.  

→ This is the #1 Stock to Buy for the AI Tidal Wave (From Chaikin Analytics) (Ad)

Should you invest $1,000 in Meta Platforms right now?

Before you consider Meta Platforms, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Meta Platforms wasn't on the list.

While Meta Platforms currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Adobe (ADBE)
4.9089 of 5 stars
$551.82-0.1%N/A46.72Moderate Buy$613.14
Meta Platforms (META)
4.0191 of 5 stars
$484.02-0.6%0.41%32.48Moderate Buy$494.53
Match Group (MTCH)
4.9961 of 5 stars
$35.91-3.8%N/A15.75Moderate Buy$47.37
NVIDIA (NVDA)
4.5587 of 5 stars
$776.63-1.3%0.02%65.04Moderate Buy$820.03
Analog Devices (ADI)
4.9343 of 5 stars
$187.76-0.7%1.83%33.59Moderate Buy$206.26
Alphabet (GOOGL)
3.4268 of 5 stars
$136.38-1.8%N/A23.51Moderate Buy$153.65
Carrier Global (CARR)
4.1081 of 5 stars
$54.76-0.5%1.39%34.66Hold$58.29
Expedia Group (EXPE)
4.7498 of 5 stars
$135.53-0.5%N/A25.19Moderate Buy$149.29
Compare These Stocks  Add These Stocks to My Watchlist 

Chris Markoch

About Chris Markoch

  • CTMarkoch@msn.com

Editor & Contributing Author

Retirement, Individual Investing

Experience

Chris Markoch has been an editor & contributing writer for MarketBeat since 2018.

Areas of Expertise

Value investing, retirement stocks, dividend stocks

Education

Bachelor of Arts, The University of Akron

Past Experience

InvestorPlace


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