How to Understand Giant Tech Firms’ Behavior? Become an AI Specialist

It’d be an understatement to state that tech behemoths like Microsoft and Google are merely experimenting with AI for staying ahead of the competition.

Financial experts and market analysts are at a loss to understand the moves made by giant tech firms. The Q1 report recently released by Alphabet, Google’s parent company, perfectly exemplifies the bizarre actions usually undertaken by tech conglomerates. Market watchdogs failed to grasp as to why Google’s revenues in the first quarter were below expectations.

Fintech News Today – The FAANG GANG

Observers were entirely at sea when Alphabet’s management ascribed the miss to modifications made in Google’s promotional products. Financial analysts at Wall Street did not find the alibi gratifying enough as they moaned about their ignorance on whether the poor performance was one-off or would continue. Facebook, Apple, Amazon, Netflix, and Google are collectively known as the ‘FAANG Gang.’ They are leading the way in experimenting with new ideas.

This FAANG squad, unlike public companies, carries on with their business not to please Wall Street pundits but to accomplish elusive goals. This elusiveness very much syncs with ‘Artificial Intelligence’ which is the current driving force of the tech behemoths. AI, nowadays, chiefly entails sifting through tons of data, and performing trial and error experiments. It is done mechanically until someone comes up with a groundbreaking idea.

AI getting more popular Day by Day

“Deep learning” is the most popular mode of AI these days. It involves a cluster of algorithms which when tweaked creates something momentous out of indecipherable data. A very good instance of such fine-tuning is Google’s upgrading of its advertisement products. The optimization strategy adopted by Google is termed as ‘objective function’ in A.I.

What Google is attempting to optimize on a tiny scale is now being carried out on a broader scale.

What are FAANG Stocks? FAANG Companies

Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG) are the five technology giants trading publicly in the market. Investors grouped these companies into one acronym to capture the collective impact that these companies have on the markets. As of March 2019, the market capitalization of these companies was equal to $3.1 trillion.

The sizeable worth of these five tech companies is a result of prominent money managers pouring money into their stocks. Funds like Berkshire Hathaway, Soros Fund Management, Renaissance Technologies, and many others have added FAANG stocks to their portfolio as growth and momentum stocks.

The five tech companies have rewarded investors with blockbuster earnings through their forays into new markets, making them among the most highly-valued in the world from a price to earnings perspective. There has been triple digit growth in their stock prices. For example, Apple’s share price jumped by 246 percent between January 2013 and August 2018. In addition to the sizable worth of these five tech companies, their growth spurts have also seen the majority of the prominent money managers in the United States increase their stake in FAANG stocks for their funds.

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Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.