Alphabet (GOOG, GOOGL) and Microsoft (MSFT) are due to report third-quarter earnings after Tuesday’s closing bell. Yahoo Finance Tech Editor Dan Howley lays out what investors will be paying the most attention to in these earnings reports, including AI trends, cloud infrastructure, digital advertising, and Google’s newest wearable tech.
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Video Transcript
BRAD SMITH: Investors gearing up for a big tech earnings, with both Microsoft and Alphabet on tap after the bell today. But what are some key themes that you can expect? Yahoo Finance’s tech editor Dan Howley joins us with the breakdown. They already said artificial intelligence, that was of quarters past, Dan. So what is it going to be this time around?
DAN HOWLEY: Yeah, Brian. The AI is still going to be a big part of this. It’s got to be. This is where the companies are making massive investments. So it’s going to be a huge part of the conversation.
But I think there’s other parts of this as well. So let’s just break it down into categories. We have the AI aspect. But then, there’s the cloud aspect, which is almost inseparable from the AI aspect. You’re seeing these companies develop AI, because they want to improve their cloud infrastructure, and get more consumers into their own businesses.
Don’t forget, we talk about the cloud. We’ve talked about the cloud. But there’s still tons of companies out there that are not in the cloud. So there’s still that growth opportunity there, for sure. And AI is seen as a way to help goose those revenues, especially with Microsoft announcing that it was charging $30 per person for that Microsoft 365 Copilot software for the enterprise.
In addition to those, we’re also looking at advertising. Yes, Microsoft has an advertising arm. It’s part of its search and LinkedIn portion. And so, it brings in advertising there.
But really, Google is what– is the main player here, when it comes to advertising. It’s one of the largest advertising– digital advertising firms in the world outside of Meta or Facebook, or whatever Mark Zuckerberg is calling it today. And so, I think that’s going to also play a big role in this. And so, it’s whether or not we’re seeing digital advertising return to what it was, if we can see an uptick there. That’s also going to inform potentially what we see from the likes of Meta, which again is the number two digital advertising firm out there.
And the advertising aspect goes beyond just Microsoft, Google, Meta. It also impacts Amazon, which has a growing advertising arm, as well as Apple, which has a growing advertising arm of its own. So there’s all of these companies that are doing different parts of advertising. And so, that’s going to be a major piece for it.
BRAD SMITH: Dan, that’s great. And advertising is huge. However, they made this announcement for Meta about the Wayfarer Ray-Bans, the Meta Wayfarers. Are they going to give us any indication about those, how successful they expect them to be, if that’s actually the immersive product that’s going to get people into the metaverse in some facet or another?
DAN HOWLEY: Well, look. I’ve used them before. I used them at a preview, and– yeah, yeah, yeah. I actually use the first generation as well.
They look like regular sunglasses. I was going to bring them to a friend’s wedding. And then, I just forgot them, to give them a try this time around.
But I think these are products that are still relatively niche. We don’t know how much people actually want to slap stuff on their faces with technology. Sure, we’re a lot more comfortable now with a product like that than we were years ago, when Google Glass came out. And the idea of someone having a camera on their face and recording you everywhere you went was considered creepy.
Now you walk across the city, and we’re in New York here. Everybody’s got their cell phone up recording everything. And so, it’s less of a creepy factor.
But I think that the problem still comes down to do people want to put things on their face, when I say this all the time, we put plastic on our eyeballs so we don’t have to wear glasses. We get lasers shot in our eyes so we don’t have to wear glasses. So getting people to voluntarily put on things when they usually don’t want to put on things, that might be a little bit of a stretch. But to that end, they’re kind of cool. Being able to take photos from your perspective is fun.
BRAD SMITH: Dan, I imagine–
SEANA SMITH: Brad has been dying to try it.
BRAD SMITH: I kind of do want to try it. And I imagine even me saying that right now, Snapchat or Ghostface Chiller, or Evan Spiegel is probably sitting here like Soulja Boy. They copied our whole flow word-for-word, bar-for-bar, with these glasses. So we’ll see who does–
SEANA SMITH: Dan, you’ve got to bring them in, if you still have them, and let Brad give it a try. He’s been talking about it.
DAN HOWLEY: I’ll do it, for sure.
SEANA SMITH: All right, Howley. Thanks so much.
