AI mentions on the rise in tech earnings calls as recession talk fades

economictimes.indiatimes.com:

artificial intelligence this earnings season, signaling that companies are increasingly optimistic about a soft economic landing. With nearly half of the Nasdaq 100 firms having reported, executives are less frequently using words like headwinds, inflation, and recession in calls with analysts and investors, according to a Bloomberg analysis.

That marks a sharp reversal from last year, when such concerns drove steep equity declines. While the C Suite is talking less about potential risks, mentions of artificial intelligence show no sign of slowing.

Executives are scrambling to elaborate on how they plan to monetize new AI products and services — be it up-selling software or manufacturing hardware to power servers and cloud infrastructures. Even the term metaverse has made a comeback.

“Collectively, this is a positive signal with respect to business prospects and profitability, a reference to how the economy remains reasonably resilient,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “Since comments in conference calls tend to be forward-looking, this could suggest more improvement in earnings is ahead.” With about 40 Nasdaq 100 companies having reported, here are some trends that have emerged in executive calls with analysts and investors:Recession References to recession and related terms like economic slowdown are down more than 70% this quarter in earnings calls compared to a year ago, with only 21 references as of Thursday.

The usage is poised to decline for the fourth consecutive quarter, according to data compiled by Bloomberg based on the companies that have reported this season. Some forecasters are now casting doubt on whether the US economy will slide into a recession after all.