(Photo Illustration by Jaque Silva/SOPA Images/LightRocket via Getty Images)

Wall Street is starting to ask CEOs when their AI spending binge will actually make money

Sundar Pichai got peppered on AI ROI during Alphabet’s earnings call. Similar questions will probably come up for other tech giants.

J. Edward Moreno

7/24/24 12:59PM

Analysts who cover Alphabet, the parent company of Google and Youtube, used to ask about artificial intelligence with curiosity. Now they want to see results.

Sundar Pichai, Alphabet’s chief executive, spent much of his energy on a Tuesday earnings call assuring analysts that AI is driving new growth. Large tech companies started an AI investment blitz over the past few years, which has riled up investors. Alphabet alone has invested more than $12 billion in AI.

The tone among analysts has shifted from previous quarters (we went back through Alphabet’s prior earnings calls). That pivot underscores growing concerns on Wall Street that the massive amount of money that has been invested on AI may not translate to more profits soon enough.

Alphabet, which reports earnings before some of its other AI-exposed peers like Microsoft, got an early taste of what will likely be a running theme in big tech earnings calls moving forward.

Ross Sandler, an analyst at Barclays, said on Alphabet's earnings call that it looks like AI may be going from an “underbuilt situation” last year to “potentially being overbuilt next year” if the rate of investment in AI keeps up.

“How are we thinking about the return on invested capital with this AI capex cycle?” he asked.

Pichai responded by saying the risk of missing out on the benefits of investing in AI outweigh the risk that they may be investing too much.

“The one way I think about it is when you go through a curve like this, the risk of underinvesting is dramatically greater than the risk of overinvesting for us here, even in scenarios where if it turns out that we are overinvesting, we clearly – these are infrastructure which are widely useful for us,” he said.

Brian Nowak, an analyst at Morgan Stanley, pressed about adoption of Google’s AI capabilities. “We're sort of 18 months into this fever pitch around generative AI focus in the world,” he said.

In a later note to investors, Morgan Stanley said “it will be important to monitor user adoption and incremental engagement/monetization from these new offerings to help investors better understand” the return on investment from AI investments.

Doug Anmuth with JPMorgan asked about Google’s AI Overviews, the answer summaries featured in search results, and whether it has more monetization potential than its traditional search. (The summaries have been known to sometimes get things wrong.)

Analysts at UBS noted that Google search revenue is up, which means “shareholders are receiving an innovation-driven step-up in monetization” for that section of the business. It’s harder to tell if its Google Cloud Platform has benefited from those investments.

“So as far as we are concerned, the [return on invested capital] debate remains only partially resolved,” they said.

Tom Jones6/24/26

Prime Day is here again and Amazon’s subscription service has never been more popular

Well, it’s that time of year again: many have made their wish lists, people are scraping together the money they’ve saved to pick out a perfect gift, some are presumably leaving out refreshments for the weary delivery drivers and, more and more, drones.

It’s Amazon Prime Day — meaning that it’s the second day of the four-day promotional event that Amazon still calls Prime Day — of course, and it’s even come early this year, with the company bringing the period into late June from July, when it’s been traditionally held for the last five years.

The Prime Age

Alongside the eyes and endless clicks that the arbitrary stream of listicles on “The Best Prime Day Deals” that almost every media outlet pours into, Amazon will also be cheering the fact that there’s now more Prime users than ever before to devour the retailer and its sellers’ sometimes-contested “discounts.” Indeed, according to the latest annual estimates from Consumer Intelligence Research Partners (CIRP), there were just over 200 million American shoppers using Amazon’s massive subscription service at the end of 2025.

Max Knoblauch6/15/26

Electronic Arts launches a platform to put more ads in its games

Video game publishing giant EA launched a new platform on Monday designed to make the process of selling immersive ad space in its popular games easier.

The company says the platform, called EA Advertising, allows brands to “integrate directly into gameplay through dynamic, real-time placements, from stadium signage to custom in-game content.”

More so than other studios, EA has incorporated advertising into its most popular titles. As Kotaku points out, the company’s ad efforts stretch as far back as 2006. Several of its sports franchises already feature partnerships with brands like Visa, Lowe’s, Red Bull, and PepsiCo.

In-game advertising hasn’t exactly been embraced by fans, but industry experts expect it to ramp up as companies seek more revenue to offset higher games budgets and surging memory costs. EA rival Take-Two has taken a different approach, with CEO Strauss Zelnick recently saying the company was “not at risk of doing brand partnerships” in the forthcoming “Grand Theft Auto VI,” and that ads in full-price games seems “unfair.”

The $55 billion deal to take EA private, led by Saudi Arabia’s Public Investment Fund, is set to close at the end of this month. Being the largest leveraged buyout in history, EA will likely look for more ways to boost revenue to cover interest payments.

Electronic Arts Makes Push for Ad Dollars Tied to Sports

Millie Giles6/11/26

JM Smucker says it sold $1 billion worth of Uncrustables in FY2026

After years of booming sandwich sales, JM Smucker has finally earned a billion-dollar crust.

On Tuesday, the company reported results for fiscal year 2026, highlighting better-than-expected profits driven by higher prices for coffee and sweet baked goods. However, at another point on the earnings call, CEO Mark Smucker pointed to one particularly jammy figure: in line with previous forecasts, the company sold $1 billion worth of its (almost always) crustless sandwiches, Uncrustables, in the last year alone.

Max Knoblauch6/8/26

Paramount reportedly offers concessions to resolve multistate antitrust investigation

Paramount has reportedly offered up some concessions in an effort to prevent an antitrust lawsuit by California and about 10 other states, according to Bloomberg reporting on Monday.

Reuters first reported on the potential suit from a group of unnamed states last week, which could throw a wrench in Paramount’s plans to buy rival Warner Bros. Discovery in a Hollywood megamerger.

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

Paramount Offers Concessions to Head Off State Antitrust Lawsuit

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

$98B ⛽

Max Knoblauch6/8/26

The IATA released its latest financial outlook for the airline industry over the weekend, forecasting a $98 billion jump in the sector’s collective fuel bill. The world’s largest trade group representing airlines expects the oil spike to halve profits by 49% from last year to $23 billion.

The group also expects profit margins to halve year over year, falling from 2025’s 4.2% to 2%. Still, revenue is expected to climb to $1.17 trillion from $1.07 trillion.

A surge in the cost of jet fuel has rocked US and global airlines this year, leading Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, JetBlue, and others to raise fares and ancillary charges like bag fees. Low-cost carriers, which operate on smaller margins, have been squeezed the hardest, resulting in Spirit’s shutdown.

“It’s a tough year for all airlines, especially those whose balance sheets had not yet recovered from COVID. And, of course, for those operating in the Gulf,” said IATA Director General Willie Walsh, who added that demand is holding up and about half of passengers expect to spend more on travel this year. “That bodes well for a strong northern summer peak season. The big unknown is how long travelers and shippers can tolerate the higher costs of connectivity.”