Google and Microsoft reported massive earnings on Tuesday, as the artificial intelligence mania fuels investor optimism and creates a fantastic wave in the sector.
The debut of ChatGPT last year coincided with huge layoffs and cost-cutting initiatives by technological behemoths, with share values plummeting after skyrocketing during the coronavirus outbreak.
For the second straight quarter, Microsoft has more than reversed the trend, with profits and revenues reaching new highs for the 48-year-old corporation co-founded by Bill Gates.
According to an earnings announcement, Microsoft’s net profit was $20.1 billion from April to June, up 20% year over year and above forecasts.
Sales were $56.2 billion, which again exceeded estimates, however growth slowed from the prior quarter.
Even if its stock price fell in after-hours trading, Microsoft remains the world’s second most valuable firm after Apple, with a $2.6 trillion market value.
The cloud, which mainly relies on artificial intelligence and accounts for more than half of the company’s sales, drove growth once again in the most recent quarter.
Cloud revenues increased by 21% year over year.
Microsoft stock soared last week after the firm said that it would charge an additional $30 per user to boost the AI capabilities of its Microsoft 365 subscription, which includes Word, Excel, and Teams.
According to Microsoft CEO Satya Nadella, “Every customer I speak with is asking not only how, but how fast they can apply next generation AI to address the biggest opportunities and challenges they face and to do so safely and responsibly.”
Alphabet, Google’s parent company, also posted profits that exceeded market expectations on Tuesday, as digital advertising revenue rebounded and its cloud business expanded. The search engine giant reported net income of $18.7 billion on revenue of $74.6 billion in the most recent quarter.
Speaking on the earnings, Alphabet’s Chief Executive Sundar Pichai revealed, “There’s exciting momentum across our products and the company, which drove strong results this quarter.”
- Tags: AI, Alphabet, CEO Satya Nadella, CHAGPT, google, Microsoft, Sundar Pichai
