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Navigating AI: Insights from Earnings Calls [VIDEO] Thumbnail

Navigating AI: Insights from Earnings Calls [VIDEO]

Artificial Intelligence (AI) has the potential to transform everyday life. It has people talking and companies buzzing about new opportunities on the earnings calls of America's publicly traded companies.

The chart below graphs the number of S&P 500 earnings call transcripts that mention “artificial intelligence” or “generative AI” over the last decade:

Chart - Number of Earnings Calls Mentioning AI

Two notable themes emerge from this data.  First, companies have been discussing AI for over a decade.  Second, the recent number of mentions around AI is actually slowing.

While the launch of OpenAI’s ChatGPT chatbot in 2022 raised investors’ awareness of AI, companies had already been talking about the technology for years. The first mentions started ten years ago, when a handful of S&P 500 companies mentioned AI in 2014. The number of mentions increased throughout 2016 and 2017 and fluctuated over the next five years.

The comments were generally broad and discussed use cases for the emerging technology.  For example, here is a comment by Johnson & Johnson on their 2nd Quarter 2015 earnings call:

“Artificial intelligence, machine learning, and advanced sensors are creating new opportunities to take advantage of the best clinical and wellness expertise.”

Statements like this show that companies were busy developing AI well before the technology went mainstream.

The number of AI comments surged after the November 2022 release of ChatGPT (yellow bar). For context, 22 companies mentioned AI on their Q4 2022 earnings calls. The number of mentions doubled to 45 in Q1 2023, the quarter after ChatGPT’s release. The number of mentions rose to 83 in Q2 2023 and peaked at 127 in Q3 2023. Since peaking, the number of mentions has declined, with only 102 mentions in Q1 2024.

The declining number of comments suggests that the recent hype around AI may be starting to fade. As more companies integrate AI, the question is whether AI will prove to be a game changing technology worth the hype or simply another step forward in technology.  Only time will tell.

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