AI Frenzy: Microsoft, Google-parent Alphabet beat earnings expectations

*Microsoft Inc. rode on growth in its cloud revenue and Artificial Intelligence-backed products to record 8 percent revenue growth at $56.2 billion, while Google parent Alphabet Inc’s results beat estimates as revenue for the quarter stood at $74.6 billion, says report

Isola Moses | ConsumerConnect

Technology giants Google-parent Alphabet and Microsoft announced better-than-expected earnings Tuesday this week, propelled by a cloud- and AI-backed wave that could breathe new life into the sector of the economy .

ConsumerConnect learnt Microsoft Inc. rode on growth in its cloud revenue and AI-backed products to record 8 percent growth in its revenue for the fourth quarter of FY23, at $56.2 billion, compared with $51.8 billion in the year-ago period.

The technology giant follows a July-June financial year, ETtech report said.

Similarly, Google parent Alphabet Inc’s results beat estimates as revenue for the quarter stood at $74.6 billion, up 7 percent year-on-year from $69.7 billion in the year-ago period, report stated.

Key highlights from Microsoft Q4 results

Net income increased 20% YoY to $20.1 billion from $16.7 billion in the year-ago period.

Microsoft’s Intelligent Cloud unit increased its revenue by 15% to $24 billion.

Capital expenditure, including finance leases, rose to $10.7 billion to support cloud demand, including investments in AI infrastructure.

Satya Nadella, Chairman and Chief Executive Officer (CEO) of Microsoft,  in an earnings release, stated: “We remain focused on leading the new AI platform shift, helping customers use the Microsoft Cloud to get the most value out of their digital spend, and driving operating leverage.”

Microsoft shares dip: Microsoft’s shares fell 3.3 percent in premarket trading as the company laid out an aggressive AI-related spending plan, saying deeper investments in AI are required before gains trickle to the bottom line.

Key highlights from Alphabet’s Q2 results

Alphabet’s net income for the quarter also grew 15 percent YoY to $18.37 billion, or $1.44 per share, from $16 billion, or $1.21 per share in the year-ago period, according to report.

Revenue from Google’s cloud unit increased 29% YoY to $8 billion.

Ad revenue, which has seen a dip in the past few quarters, rose 3.3% to $58.14 billion.

Long-serving CFO Ruth Porat will assume the newly created role of president and chief investment officer, effective September 1, 2023.

Alphabet Chief Executive Sundar Pichai, in an earnings release, said: “Our continued leadership in AI and our excellence in engineering and innovation are driving the next evolution of Search, and improving all our services.”

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