Following an earnings beat from Alphabet Inc., one portfolio manager says other major tech companies need to deliver strong results amid high multiples and large AI expenditures.<\/p>\n
Alphabet\u00a0reported its latest earnings<\/a>\u00a0Tuesday, showing its expensive venture into AI is beginning to yield results with better-than-expected sales for its cloud-computing businesses, Bloomberg News reported. Net income during the quarter surpassed expectations, reaching US$2.12 per share. Excluding partner payouts, revenue rose by 16 per cent annually to $74.6 billion, beating expectations.<\/p>\n Martin Pelletier, a portfolio Manager at Wellington-Altus Private Counsel, said in an interview with BNN Bloomberg Wednesday that the tech giant delivered a \u201csolid quarter.\u201d<\/p>\n \u201cOverall, the tech sector is looking a little bit stretched here with high expectations in the ninety ninth percentile for earnings and valuations being in the ninety third percentile. But Google certainly delivered,\u201d he said.<\/p>\n \u201cAnd the big question is, are the rest of the five megas who are reporting this week going to post similar results?\u201d<\/p>\n Microsoft Corp. and Meta Platforms Inc. are\u00a0scheduled to report earnings<\/a>\u00a0Wednesday, with Bloomberg News reporting that investors will look to see if their large AI expenditures are paying off.<\/p>\n Ahead of the results from other major tech companies, Pelletier said \u201cAI seems to be everywhere these days.\u201d<\/p>\n \u201cAI is certainly integrated into a lot of different areas in the U.S. economy. And I think that\u2019s why we\u2019re seeing what we\u2019re seeing south of the border (with) the U.S. leading every other country in the world, and economically AI is certainly having an impact there,\u201d he said.<\/p>\n