Alphabet, the parent of Google, saw its share price rise as investors praised the company’s success in making a move towards artificial intelligence – Copyright AFP/File TIMOTHY A. CLARY
Alphabet parent Google impressed Wall Street with its latest quarterly earnings on Wednesday, as big tech rivals Microsoft, Meta and Amazon left investors lukewarm amid concerns about the high cost of AI development.
The gains come as AI titans pump billions of dollars into cloud computing and artificial intelligence, competing to lead in technology they insist will transform all aspects of life.
Alphabet shares rose more than six percent in after-hours trading as investors praised the company’s success in making its focus on artificial intelligence and stable revenue in its core divisions.
The tech giant reported a profit of $62.6 billion on revenue of just $110 billion, easily eclipsing the same period a year ago and beating market expectations.
Shares in Alphabet, the maker of Gemini AI, have risen 26 percent in the past six months, while rivals Meta and Microsoft have seen their shares fall 11 percent and 22 percent respectively over the same period.
Meanwhile, social media giant Meta saw its shares slide by more than six percent despite high earnings expectations for the recently ended quarter.
Meta sent tremors through its results by announcing that spending at the tech giant hit $33.4 billion as it pursues “superintelligence” through major infrastructure purchases and began a hiring spree for top AI talent.
The company reported a profit of $26.8 billion on revenue of $56.3 billion in the quarter.
The AI investment by the company that owns Instagram and Facebook is not directly tied to a revenue stream like with Amazon, Microsoft and Google, which sell their AI-powered cloud services to customers around the world.
Many analysts expect Meta to pay off its investments by improving advertising efficiency and creating new opportunities, such as with its smart glasses through a partnership with Ray-Ban maker EssilorLuxottica.
– Shares fall –
While investors are wary of whether spending fortunes on AI is financially prudent, companies insist it’s justified by seemingly insatiable demand, a position Wall Street largely supports even if shares in some of the tech giants have struggled in recent months.
Microsoft also reported quarterly revenue and earnings ahead of Wall Street expectations on Wednesday, driven by demand for cloud computing and artificial intelligence services that drove revenue.
The tech giant posted revenue of $82.9 billion for the quarter ended March 31, up 18 percent from a year earlier and topping analysts’ consensus forecasts. Net income rose 23 percent to $31.8 billion.
But the company founded by Bill Gates saw its shares fall by more than two percent.
Amazon, meanwhile, reported a sharp rise in first-quarter profit, saying its investment in artificial intelligence startup Anthropic boosted the bottom line.
The Seattle-based e-commerce and technology colossus said net profit jumped to $30.3 billion in the three months ended March 31, nearly doubling from $17.1 billion a year earlier. The results included $16.8 billion in pre-tax earnings from Amazon’s stake in Anthropic.
Amazon shares fell two percent.
