2024-03-09 05:19:03 ET
Summary
- In contrast to the highly publicized moves by big tech to slash employee counts and adopt AI, AT&T's using the technology to cut costs by $6 billion seems to have gone unnoticed.
- An additional $2 billion is planned, but which could be boosted by more than 80% when the productivity gain aspect of using Generative AI is factored in.
- The telco's cost-savings and capital-light strategy are resulting in better FCF which releases cash for growth, making it a buy.
- However, revenue can take time to grow, which may pose risks to the company's stock price.
- Still, to navigate in the highly competitive telco environment while having to spend both on infrastructure and dividend payments, AT&T's approach makes sense.
After the market slump of the second half of 2022, Big Tech started slashing employee counts by the tens of thousands in highly publicized announcements to reduce costs and improve profits while rapidly adopting artificial intelligence to enrich their products. Two of these are Meta Platforms (NASDAQ: META ) and Alphabet (NASDAQ: GOOG ) whose stocks were net gainers during the last three years....
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AT&T: AI-Led Productivity And Capital-Light Growth (Rating Upgrade)