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Specifically, the market commentary providers note that while the technology underpinning AI is undeniably real and the investment in it substantial, the primary AI tools gaining attention are consumer-oriented and largely serve as proof-of-concept rather than offering solid, return-on-investment (ROI) benefits that enterprises seek for wide-scale deployment.
“This discrepancy between massive infrastructure investment and utility could lead to an enormous correction, much as occurred the late-‘90s/early-‘00s with the internet (the internet and browser were more revolutionary than even the biggest optimists could have imagined, but the process wasn’t instant or linear),” analysts wrote.
Still, analysts highlighted Google (GOOGL) as a case where the consensus may be underestimating the company’s resilience and capacity for innovation.
Google’s search and other core services remain unchallenged, with no evident loss of market share to AI-driven competitors, even in the face of Bing’s collaboration with OpenAI, they said.
Moreover, the company’s own AI capabilities are significant “and its products related to this area are likely to only improve going forward,” analysts noted, pointing out Alphabet’s (NASDAQ:GOOGL) potential AI partnership with Apple (NASDAQ:AAPL). This would not only boost Google’s standing in AI but also affirm its technological prowess.
Meanwhile, another market commentary provider, Stock Trader’s Almanac, maintains an optimistic outlook for 2024, anticipating the majority of market growth to unfold in the latter half of the year.
However, analysts expect “some consolidation and/or weakness during Q2-Q3” before that next leg.
