Charting AI's Journey Through Earnings Transcripts

Chart of the Month
Written By Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®
AI Microchip

Photo Credit: Getty Images, Unsplash

You have likely seen headlines and news reports discussing artificial intelligence as a significant technological advancement. AI’s potential to transform everyday life has people talking about its use cases and the stock market buzzing about new investment opportunities. The chart below graphs the number of S&P 500 earnings call transcripts that mention the following AI phrases: “artificial intelligence” or “generative AI”. Two notable themes emerge: (1) companies have been discussing AI for over a decade, and (2) the recent number of mentions around AI is slowing.

While the launch of OpenAI’s ChatGPT chatbot in 2022 raised investors’ awareness of AI, companies were already discussing the technology. The first mentions started ten years ago when a handful of S&P 500 companies mentioned one of the AI phrases in 2014. The number of mentions increased throughout 2016 and 2017 before gradually declining over the next five years. The comments during this period were broad and discussed use cases for the emerging AI field, such as this 2015 comment by Johnson & Johnson, a pharmaceutical company: “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 worked on AI years 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 one of the AI phases 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 during the past two quarters, with only 102 mentions in Q1 2024. The declining number of comments suggests that the recent AI hype may be fading. As more companies integrate AI, the question is whether AI is a game-changing technology worth the hype or simply another step forward in technology.

Number of S&P 500 Earnings Calls Mentioning Artificial Intelligence (Quarterly)

ber of S&P 500 Earnings Calls Mentioning Artificial Intelligence
 

Important Disclosures
This material is provided for general and educational purposes only and is not investment advice. Your investments should correspond to your financial needs, goals, and risk tolerance. Please consult an investment professional before making any investment or financial decisions or purchasing any financial, securities, or investment-related service or product, including any investment product or service described in these materials.

Our Insights

Featured
Election Driven Rally Pushes US Equities Higher
Election Driven Rally Pushes US Equities Higher

Stocks traded higher this week, with most of the gains occurring after the election. The S&P 500 reached a new all-time high, nearing the key 6,000 level. The broader equity market rally was notable as investors priced in the Trump administration’s pro-growth, reflationary policies. The past few weeks have been packed with market-moving events, but the calendar is expected to settle down as we approach year-end.

Treasury Yields Rise Following the Fed’s September Rate Cut
Treasury Yields Rise Following the Fed’s September Rate Cut

Stocks finished October lower as investors navigated Q3 earnings, the upcoming election, and uncertain Federal Reserve policy. Treasury yields climbed as investors considered the possibility that the Fed may not cut interest rates as much as previously expected. Concerns about fiscal spending also drove Treasury yields higher, with expectations for continued high government spending regardless of the election outcome.

The Next Two Weeks are Filled With Market-Moving Events
The Next Two Weeks are Filled With Market-Moving Events

This week, stocks traded lower after several weeks of consistent gains. The S&P 500 dropped -0.5%, underperforming the Nasdaq 100's +0.3% gain but outperforming the Russell 2000's -2.8% return. The Magnificent 7 rose over +2%, making Growth the only factor to trade higher. The next two weeks are filled with market-moving events, and once they pass, stocks could rally into year-end.

Jonathan M. Elliott, CPWA®, CRPC®, CDFA®, ChSNC®, CPFA™, RMA®

I am currently the Managing Partner for our independent investment advisory firm, Optima Capital Management. Together with my business partners, Todd Bendell CFP® and Clinton Steinhoff, we founded Optima Capital in 2019 as a forward-thinking wealth management firm that serves as an investment fiduciary and family office for high-net-worth individuals and families. In addition to being the Chief Compliance Officer, my role at Optima Capital is portfolio management. I have over 18 years of experience in managing investment strategies and portfolios. I specialize in using fundamental and technical analysis to build custom portfolios that utilize individual equities, bonds, and exchange-traded funds (ETFs). I began my financial services career with Merrill Lynch in 2003. At Merrill, I served in the leadership roles of Market Sales Manager and Senior Resident Director for the Scottsdale West Valley Market in Arizona. On Wall Street Magazine recognized me as one of the Top 100 Branch Managers in 2017. I am originally from Saginaw, Michigan, and a marketing graduate from the W.P. Carey School of Business at Arizona State University. I am a Certified Private Wealth Advisor® professional. The CPWA® certification program is an advanced credential created specifically for wealth managers who work with high net worth clients, focusing on the life cycle of wealth: accumulation, preservation, and distribution. In addition, I hold the following designations - Chartered Retirement Planning Counselor (CRPC®), Certified Divorce Financial Analyst (CDFA®), Certified Plan Fiduciary Advisor (CPFA), and Retirement Management Advisor (RMA®). In the community, I am a member of the Central Arizona Estate Planning Council (CAEPC) and serve as an alumni advisor and mentor to student organizations at Arizona State University. My interests include traveling, outdoors, fitness, leadership, entrepreneurship, minimalism, and computer science.

Previous

Fed Holds Rates Steady, But Continues to Forecast 3 Cuts This Year
Next

Stocks Trade Higher in February as the Rally Broadens Out