IoT Analytics launched the Q3/2024 outcomes of their quarterly firm earnings name evaluation.
This evaluation is predicated on a complete dataset of over 8,000 earnings calls from ~4,000 international corporations listed within the U.S. in Q3 2024 and Q2 2024. CEO discussions are more and more centered on sensible AI functions, renewable power sources, unpredictable IT outages, and election-related subjects, whereas mentions of generative AI, NVIDIA, and the cloud have decreased.
Key insights:
In keeping with the newest “What CEOs talked about” report, 4 themes gained noticeable traction in Q3 2024: 1) sensible AI functions, 2) renewable power sources, 3) unpredictable IT outages, and 4) election-related subjects.
Discussions concerning AI barely declined; nevertheless, there’s a noticeable shift towards discussions about particular AI functions, akin to course of automation, predictive upkeep, and digital twins.
Renewable power sources climbed in mentions, as did discussions round IT outages and the upcoming US election (together with candidates).
Generative AI, NVIDIA, and the cloud all see drops of their mentions.
Choose quotes:
Knud Lasse Lueth, CEO at IoT Analytics, feedback:
“In Q3 2024, we observed a notable shift in CEO discussions toward AI applications, renewable energy, IT resilience, and the upcoming U.S. elections. Despite this shift, economic concerns remained the most discussed theme overall. Historically, changes in CEO discussion themes have been indicators of shifts in sentiment and corporate investment behavior. I expect these emerging topics to play a more prominent role in corporate decision-making moving forward.”
Philipp Wegner, Principal Analyst at IoT Analytics, provides that “AI might have been mentioned slightly less in Q3 2024 but it is still the key technology that executives discuss. More and more CEOs talk about concrete use cases rather than AI in general.”
What CEOs talked about in Q3 2024: Sensible AI functions, renewable power sources, and unpredictable IT outages
The large image
CEOs’ financial considerations remained much like Q2 2024. In keeping with IoT Analytics’ “What CEOs talked about” report for Q3 2024, CEO discussions associated to financial considerations have usually leveled off or decreased in significance quarter-over-quarter (QoQ). There was little change within the variety of discussions round rates of interest—nonetheless at ~27%—whereas inflation dropped 1.9% QoQ to 35.8%.
In the meantime, discussions concerning recession considerably climbed 29.5% QoQ to five.3% of calls. CEO emotions a few recession appeared blended, as many noticed the chance of worldwide recession as decrease, whereas many others shared considerations about industrial recession or country-specific recession, akin to in China or Germany.
International GDP development anticipated for subsequent few years. The Group for Financial Cooperation and Improvement (OECD) forecasts international GDP to develop by 3.1% in 2024 and three.2% in 2025. Notable development projections embody:
India: 6.7% in 2024; 6.8% in 2025
China: 4.9% in 2024; 4.5% in 2025
US: 3.2% in 2024; 1.6% in 2025
Euro space: 0.7% in 2024; 1.3% in 2025
Argentina: minus 4.0% in 2024; 3.9% in 2025
Inflation trending downward in lots of areas. In August 2024, US shopper costs fell to their slowest rise since February 2021 at 2.5%. The Euro space has additionally seen decrease inflation charges in August, reaching an annual charge of two.2% in comparison with 2.6% in July 2024. China, which has struggled with depressionary strain after muted financial development in 2023, reported that its shopper value index rose 0.6% year-on-year (YoY) in August 2024.
Rates of interest dropping, although traders stay cautious. In response to the decrease inflation charge, the US Federal Reserve made the long-awaited resolution to decrease its benchmark rate of interest by half a share level on 18 September 2024, bringing it to its lowest degree since March 2023. The forecasted US financial development slowdown and a weakening labor market appeared to play closely within the excessive reduce made by the Fed. In the meantime, the Folks’s Financial institution of China additionally reduce charges by 0.5 share factors in late 2024 and signaled it will comply with up with additional cuts to assist spur its sluggish financial system.
Key CEO quote on the macroenvironment
“After a break in progress, inflation now appears back on a downward trajectory.” – Jane Fraser, CEO, Citigroup Inc., July 12, 2024
“We’ve seen what I call industrial recession.” – Sanjiv Lamba, CEO, Linde plc, August 7, 2024
Key rising themes in Q3
1. Sensible AI functions
Elevated curiosity in functions for AI. In Q3 2024, CEOs mentioned utilizing AI and automation to streamline processes at a better charge than quarters earlier than. A few of the key AI-related use instances talked about on this regard are:
Course of automation – Up 59% QoQ to ~0.6% of earnings calls
Digital twin – Up 35% QoQ to ~0.6% of earnings calls
Conversational AI – Up 28.6% QoQ to ~0.4% of earnings calls
Predictive upkeep – Up 48% QoQ to ~0.4% of earnings calls
Constructing automation – Up 29.5% QoQ to ~0.2% of earnings calls
The rise in discussions about AI functions signifies that corporations wish to enhance enterprise outcomes.
Key CEO quote on sensible AI functions
“For large enterprise clients, they look at work streams like invoice processing, invoice accuracy, the types of things that are both ingested via scanning and things that are printed, PDFs and their formats, and all the handling of all of that robotic process automation and all the types of advancements in that space is just helping clients be much more efficient.” – John Bruno, COO, Xerox Holdings Company, July 25, 2024
2. Renewable power sources
Renewables skilled vital rise, although with regional disparity. In Q3 2024, inexperienced power subjects rose considerably in mentions. Discussions round solar energy climbed 78.6% QoQ to ~1% of earnings calls, whereas wind energy rose 58.3% QoQ to ~0.5%. Relating to those subjects, power costs additionally climbed 38% QoQ to 1.6% earnings calls, offering some indication as to why mentions of those renewable power subjects rose.
These subjects didn’t expertise development evenly worldwide, nevertheless. Asia-Pacific (APAC) corporations mentioned wind energy in 1.6% (+306% QoQ) of their calls, whereas European, Center Japanese, and African (EMEA) corporations mentioned it in 1.2% (+92% QoQ) of their calls. In distinction, North America was the one area with fewer mentions of wind energy QoQ, down 47% to 0.12% of calls. Concerning solar energy, EMEA corporations mentioned it in 1.52% (+886%) of earnings calls, APAC corporations in 1.56% (+103%) of calls, and North American corporations in 0.61% (+13% QoQ).
Normal climate-related key phrases stay pretty regular QoQ. In comparison with renewables, international boardroom discussions concerning basic climate- and sustainability-related subjects had been comparatively unchanged QoQ:
Sustainability – Rose 8.5% QoQ to 19.3% of calls
Emission – Declined 0.7% QoQ to 11.1% of calls
Local weather – Rose 8.3% QoQ to eight.3% of calls
ESG – Declined 0.2% QoQ to six.5% of calls
Key CEO quotes on renewables
“Continue to progress our sustainability agenda, and recent notable highlights include the extension and for higher volume of a solar power purchase agreement to 2030 will cover up to 40% of German demand needs.” – Oliver Graham, CEO, Ardagh Steel Packaging S.A.,July 25, 2024
“On current estimates, China will add 250 gigawatts of new wind and solar power capacities just this year.” – Chiang Tung Keung, CEO, CLP Holdings Ltd, August 05, 2024
3. Unpredictable IT outages
Crowdstrike/Microsoft outage generate dialogue round methods to keep away from system failures. Company executives mentioned IT-related outages in 6.5% of earnings calls, a 65.7% rise QoQ. Spurring this dialogue was the July 2024 worldwide IT programs crash affecting Microsoft Home windows, attributable to a defective replace pushed by US cybersecurity firm CrowdStrike. Historically, corporations fear about cyber assaults from nefarious sources; nevertheless, with this risk coming from inside the home, company leaders look like contemplating the essentiality of their IT programs, the impacts of not solely cyberattacks but in addition catastrophic errors, and what preparation is required for fast responses to such occasions.
Key CEO quotes on outages
“Certainly, the focus has historically been on kind of malicious intent on a cyber hack, but certainly a system outage not driven by a cyber assault does create a new form of risk exposure. That’s always been there, honestly, but maybe now is at the front of mind as people look to see the type of cover that they have.” – Eric Anderson, CEO, Aon Plc, July 26, 2024
“So the importance of mission criticality has gone up significantly since the outage that was caused by CrowdStrike.” – Jay Chaudhry, CEO, Zscaler, September 03, 2024
4. Elections and coverage
Election discussions are heating up. The US presidential race on November fifth is quickly upon us, and with it, a steep climb in discussions round it. Normal mentions of election rose 47.7% QoQ to 24.8%, and although Doland Trump has had mentions in a small variety of earnings calls all through 2024, Kamala Harris’s sudden entry into the race put particular mentions of her in some boardroom discussions as properly.
Coverage on the forefront of CEO minds this election season. Whereas particular mentions of the candidates had been a really small portion of earnings calls, the influence they might have on coverage was extra prevalent. Discussions concerning coverage basically rose 21% QoQ to 22% of earnings calls, and tariff discussions rose 56.7% QoQ to 7% of calls.
Key CEO quotes on the election and coverage
“Now the entry of Kamala Harris into the presidential race and the high level of fundraising for both Harris and Donald Trump is resulting in new dollars spent with us.” – Adam P. Symson, CEO, The E.W. Scripps Co., September 8, 2024
“We could be seeing some pulling forward of demand, most notably in North America, with the US election in November and the uncertainty about future import tariffs.” – Vincent Clerc, CEO, A.P. Moller – Maersk, August 10, 2024
Declining themes in Q3
AI and generative AI
Generative AI (GenAI) continues decline in mentions. CEO discussions concerning GenAI dropped 16% QoQ to six.6% of earnings calls—the 2nd consecutive quarter for such decline. Noteworthy in that is that for the primary time since coming into the scene in This autumn 2022, ChatGPT skilled development in discussions whereas GenAI declined; nevertheless, ChatGPT was solely talked about in 1% of calls (+3% QoQ)—nonetheless decrease than GenAI mentions.
Normal AI discussions dip in comparison with Q2 2024. Normal AI discussionsdropped 2.4% QoQ to 34.4% of earnings calls. That mentioned, it ought to be famous that much like IoT Analytics’ Q2 2024 protection, AI was the second most mentioned subject, and it inched nearer to surpassing discussions about inflation in comparison with Q2 2024.
NVIDIA and GPUs
GPUs and their largest producer, NVIDIA, much less essential to CEOs in Q3 2024. US-based chips and semiconductor producer NVIDIA—the world’s main knowledge middle GPU producer— declined 19.5% QoQ to 2.6% of earnings calls, and mentions of GPU additionally dropped 3.2% QoQ to three.5% of earnings calls. Nonetheless, executives emphasised NVIDIA‘s critical role in their companies’ AI methods, significantly for high-performance computing wants. There are rising worries concerning the availability of GPUs and escalating prices.
“I guess I’m quite concerned about actually being able to get state-of-the-art NVIDIA GPUs when we want them.” – Elon Musk, CEO, Tesla, July 24, 2024
“We are going to buy more and more GPUs.” – Eric Yuan, CEO, Zoom Video Communications, Inc., August 21, 2024
Cloud suppliers
Cloud suppliers see drops in mentions. Mentions of two main cloud suppliers, AWS and Azure, decreased in Q3 2024. AWS fell 12.3% QoQ to 2.3% of calls, whereas Azure dropped 11.3% QoQ to 1.5%.
What it means for CEOs
5 key questions that CEOs ought to ask themselves based mostly on the insights on this article:
AI functions: Are we adequately exploring sensible AI functions like course of automation, predictive upkeep, and digital twins inside our group? How can these improve our operational effectivity and scale back prices?
Renewable power: How is our firm leveraging renewable power sources, akin to photo voltaic and wind energy, to cut back our environmental footprint and meet regulatory or market-driven sustainability targets?
IT outages: Do we now have adequate catastrophe restoration and response plans to mitigate the influence of unpredictable IT outages from each exterior cyberattacks and inside operational errors?
Financial outlook: Given the blended sentiments on recession and financial development forecasts, how are we making ready for potential downturns, particularly in key markets like China or Germany?
Election affect: With the US election on the horizon, how might potential modifications in coverage, tariffs, and authorities spending have an effect on our enterprise operations and technique?
What it means for these serving CEOs
5 key questions that these serving CEOs ought to ask themselves based mostly on the insights on this article:
AI integration: Are we staying knowledgeable on the newest AI developments, and have we evaluated whether or not AI use instances akin to automation and predictive upkeep might enhance effectivity in particular departments?
Sustainability initiatives: Are our sustainability targets aligned with the rising significance of renewable power sources, and have we thought-about updating our reporting or mission methods to mirror this focus?
IT resilience: What steps are we taking to make sure IT resilience within the face of accelerating discussions round unpredictable IT outages? Is there any hole in our present IT infrastructure that requires speedy consideration?
Financial forecasts: Ought to we current an up to date evaluation of how recession considerations, inflation, and rate of interest modifications might influence our present initiatives or long-term technique?
Election and coverage: How will we anticipate the result of the upcoming US election will have an effect on key areas of our enterprise, and have we ready any situation planning based mostly on potential coverage modifications?
Supply: IoT Analytics
