Sunday was a big day in the world of sports as football fans settled in to watch the Super Bowl. However, most will agree that it isn't just about the gridiron, as it's also arguably the biggest day of the year for advertising.
To get in on the action, companies forked over roughly $7 million for a 30-second ad. Furthermore, last year's game was viewed by a record 115 million fans, and the 2024 viewership is expected to surpass last year's total. Where else can marketers reach an audience of that magnitude?
One of the recurring themes of this year's advertising bonanza was artificial intelligence (AI). Recent developments in the field of AI were on full display during the big game, as some of the biggest names in the field made a splash during the commercial breaks. Let's look at three of those companies and what it means for investors.
Image source: Getty Images.
Microsoft
Microsoft (MSFT +1.01%) deserves at least partial credit for kickstarting the AI revolution last year. The advent of Open AI's ChatGPT had already sparked interest in generative AI when it was revealed that Microsoft had taken a $13 billion stake in the company. This, arguably, sent other big tech companies scrambling to develop or invest in their own AI solution, and the rest, as they say, is history.
The fruit of Microsoft's labors, Copilot, was featured in an ad called "Watch Me" that appeared during Sunday's game. The piece highlighted the capabilities of its AI-fueled digital assistant, helping people in a variety of settings. One user created storyboard images based on a script in the next steps toward creating a movie. Another used Copilot to write the code for a new video game. A student used the next-generation chatbot to quiz them in preparation for a chemistry test. A budding entrepreneur used Copilot to design the logo for a classic truck repair business named Mike's Garage.
NASDAQ: MSFT
Key Data Points
Microsoft has already experienced robust demand for Copilot. The company had previously said that GitHub Copilot sports over 1 million paid users, with more than 37,000 businesses subscribing to Copilot for Business, including over 40% of the Fortune 100 companies during its early access program. In its fiscal 2024 second quarter, Microsoft's Azure Cloud was the fastest-growing of the major cloud infrastructure providers, up 30% year over year, with "six points of growth from AI services."
Wedbush Securities analyst Dan Ives noted, "This is no longer your grandfather's Microsoft... and the Super Bowl is a unique time to further change perceptions."
By highlighting a variety of Copilot use cases to a national audience, Microsoft is no doubt hoping to spark additional interest in its AI tools.
Alphabet
Alphabet (GOOGL 0.55%) (GOOG 0.15%) has long been at the cutting edge of AI, using sophisticated algorithms to more effectively target advertising and surface relevant information on Google search.
However, it was the capabilities of Google's Pixel 8 phone that were on display in Sunday's spot. The ad, dubbed "Javier in Frame," highlights the difficulties experienced by "people with blindness or low vision" and the challenges involved in taking a selfie. The smartphone uses Guided Frame with Google AI to help users position the phone, providing voice commands to let them know when one or more subjects are in the frame for a photo.
That's just the tip of the iceberg in terms of Alphabet's AI. The company's Vertex AI platform boasts more than 130 pre-built generative AI models, as well as its customizable digital assistant, Duet AI. Alphabet recently released Google Gemini, which the company called its "largest and most capable AI model," which "exceeds current state-of-the-art results on 30 of the 32 widely used academic benchmarks" used to evaluate AI performance.
Google isn't neglecting search and digital advertising, which have long generated the lion's share of the company's revenue. Alphabet has plans to implement more advanced and varied search tools using generative AI and has already rolled out a host of AI-powered tools to help advertisers be more successful, which in turn will boost Alphabet's -- and investors' -- fortunes.
NASDAQ: CRWD
Key Data Points
CrowdStrike
CrowdStrike (CRWD +1.41%) might not be the first company that comes to mind when investors think of AI, but it should. The company is at the forefront of AI-powered cybersecurity, and its cloud-native Falcon platform -- with its proprietary distributed threat graph -- was built around AI and machine learning. The company analyzes more than 2 trillion events per day, and because its AI learns as it goes, the company improves its success rate with each encounter.
The cybersecurity specialist used a bit of comedy to drive the point home about the benefits of AI in an ad dubbed "The Future." The commercial is based in the Old West, as several ominous-looking robots ride into town while residents run screaming, clearing the dusty streets. After a resident raises the alarm, a lone woman armed with CrowdStrike and a holographic tablet quickly vanquishes "the adversaries."
The need for CrowdStrike's services has never been greater, as evidenced by its robust results. In the third quarter, revenue of $786 million grew 35% year over year, driven by record new annual recurring revenue of $3.15 billion, also up 35%. That helped fuel record profitability as adjusted earnings per share of $0.82, which soared 105%. This also resulted in record operating cash flow of $274 million and record free cash flow of $239 million.
As one of the pioneers of AI-powered cybersecurity, CrowdStrike showed its humorous side, but make no mistake: Cybersecurity is serious business and CrowdStrike is well positioned to ride the rising tide of AI.
