Artificial intelligence startup OpenAI, Microsoft and Baidu led the way this week in new developments for AI stocks. Global technology services firm Accenture, which has been busy making AI-related acquisitions, reports earnings March 23.
Meanwhile, analysts published reports speculating on upside for software companies, such as C3.ai, and chipmakers from the emergence of generative AI.
OpenAI launched its next-generation chatbot technology called GPT-4. GPT-4 is multimodal — it accepts text, speech, images and video as inputs. Its answers are in text.
Open AI's biggest investor, Microsoft, announced its 365 Copilot workplace software initiative. Microsoft is integrating OpenAI's technology into Office applications such as Word, Excel, PowerPoint, Outlook and Teams. Also, Microsoft is testing the AI technology with 20 companies.
China's internet search giant Baidu rolled out its new Ernie Bot. It's an AI-powered chatbot that represents China's first rival to OpenAI's ChatGPT. Further, here's a YouTube link to Baidu's news conference.
AI Stocks: Data Center Plays
Much of the buzz involving AI stocks involves cloud computing. Internet data centers will need more computing power and network bandwidth to process AI workloads. Network gear maker Arista Networks, on the IBD 50 roster of fast-growing companies, and chipmaker Nvidia, on the IBD Leaderboard, are expected to get a boost.
UBS analyst Timothy Arcuri, in a note published Friday, says investors should also keep an eye on Advanced Micro Devices.
"We think the market may also be underestimating the opportunity for AMD as it launches competitive new MI series data center GPUs," said Arcuri.
He added: "With MI300 launching in '24, we think AMD will finally have a data center class GPU that may prove competitive for lower precision compute (favored for AI workloads)."
Accenture Earnings Due Amid Acquisition Spree
Amid the buzz over OpenAI, investors need to be cautious amid the hype over AI stocks. That's the advice from JPMorgan analyst Pinjalim Bora in a report published Thursday. Shares in C3.ai have jumped 90% in 2023.
"Last week, we attended C3.ai's in-person Transform conference in Boca Raton, Florida," Bora said in the note. "While the company did not provide any financial update, the event included new product features like the Generative AI product suite, as well as insights from customers and partners.
He also said: "Overall, while it was a good conference, we still have work to do to understand if C3 can fundamentally capitalize on the current surge in interest around artificial intelligence, by differentiating its products and winning LT customers, as opposed to some ephemeral near-term benefit in terms of increased engagement or activity levels."
Meanwhile, Accenture made 23 acquisitions in 2022, several of which involved AI companies.
In addition, analysts estimate Accenture earnings will dip 2% to $2.49 per share. Amid currency headwinds, analysts project revenue growth of nearly 4% to $15.61 billion.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
