Q4 ad sales for Alphabet and Meta are unlikely to reflect investments in gen AI

Business MInutes

Although generative artificial intelligence created quite a stir last year, investors are sketching out the technology's future possibilities and the influence it will likely have on Alphabet and Meta Platforms' advertising businesses when they release their fourth-quarter earnings this week. 

The search engine has released artificial intelligence (AI) capabilities that assist marketers in more cost-effectively targeting customers and allocating their marketing spending within Google's ad network. Generative AI is being used by Facebook parent company Meta to generate several ad campaign versions. 

While Meta's stock almost tripled in value last year, Alphabet's stock increased by 58%. An AI-driven tech rally in 2023 contributed to a nearly quarter-point rise in the S&P 500 index as a whole. Generative AI, which can create text and photos from prompts, is still in the "hype cycle," Bernstein analysts said in a research note earlier this month, but added that investors were now looking for "incremental use cases and revenue streams to spawn from these recent advancements."


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