During the earnings reporting season for the second quarter, artificial intelligence was all the rage. Many leaders were still finding ways to bring it up in their calls with Wall Street analysts.
After a rush into the technology for almost two years, however, stocks of companies that didn’t talk about AI on their earnings calls have done a little better in the last few weeks.
A FactSet report released on Friday says that since the middle of June, 210 S&P 500 companies have talked about “AI” on their second-quarter earnings calls, which is more than 40% of the companies in the index. That study said that the number of companies talking about AI on those calls was almost the same as the record set during the first quarter of this year.
FactSet says that so far this year, the share prices of companies that talked up AI have done a little better than those that didn’t. Those that did have share prices that were 12.2% higher on average than those that didn’t. But it looked like those companies didn’t make as much this summer.
Report by FactSet Senior results Analyst John Butters says that prices have changed 4.1% on average for S&P 500 companies that talked about “AI” on their Q2 results calls since June 30. “S&P 500 companies that didn’t talk about “AI” on their Q2 earnings calls saw an average 6.1% change in price since June 30.”
Of course, many things can make a stock go up or down at any given time. But the trend comes after months of huge gains thanks to AI’s potential for the biggest tech companies. In other places, consumers are still being cautious and having lower hopes.
Many experts still think AI is a huge long-term chance that could completely change the way people work and, in the process, make companies more profitable. But some people have been worried about how long it might take for that to pay off, and they’ve paid more attention to how much it costs to build the technology and how good it is right now.
And the bar is still high for the big tech stocks. Chipmaker Nvidia Corp. NVDA -0.03% saw its stock drop last month after its sales outlook was better than expected, but not by enough to make investors happy. Nvidia is a nearly $3-trillion business that many analysts see at the center of the AI boom.
Reports from five S&P 500 companies are coming out this week, according to FactSet.
The call you need to mark on your calendar
FedEx: brings packages to people FedEx Corp. will release its quarterly earnings on Thursday. As they have for the past two years, experts will be paying close attention to the company’s huge effort to cut costs, which has helped its share price. As for buyers, they hope that demand will grow in the coming months. Wall Street is also likely to be paying close attention to any new information about FedEx’s FDX 0.13% planned review of its freight business. The company announced this plan in June, but didn’t give many details.
Numbers to keep an eye on
There are changes in the prices of homes and food. For news on the housing market, check out the financial data that homebuilder Lennar Corp. LEN 2.50% releases on Thursday. People who want to buy a home, buy things, or borrow money will wait for those results while they wait for the Federal Reserve to lower interest rates.
But this month, Bankrate’s chief financial analyst, Greg McBride, said that mortgage rates wouldn’t go down right away even if the Fed lowered its key interest rate. He also said that home prices might go up even more.
“Lower interest rates could lead to more homes being sold and more people wanting to buy them,” he said. “A slow drop in rates that helps home builders, buyers, and sellers is better than a sudden drop in rates that causes demand to rise too high for supply to keep up.”
As for other news, food prices are still high. This week’s earnings reports from General Mills Inc. GIS 0.96% and Olive Garden parent company Darden Restaurants Inc. DRI 1.10% will give us a new look at how people spend their money between grocery stores, where they have to go, and restaurants, where some have lost business because people are trying to save money.
