Microsoft ,Google Gain After AI Fuels Cloud Computing Demand

 Tech gaints exceeded wall street estimates following latest quarterly results :





Microsoft Corporation and Google owner Alphabet Inc sent a clear message to investors on Thursday : Our spending on Artificial Intelligence and cloud computing is paying off .

The companies trounced Wall Street estimates with thier latest quarterly results ,lifted by a surge in cloud revenue - fueled in part by booming use of AI services .Alphabet shares surged as much as 12% , the  biggest gain since July 2015, to their highest level ever. The rally pushed Alphabet's valuation past $2 trillion . Microsoft rose as much as 3.5%.

The tech titans have been locked in a fierce battle for dominance in the field of artificial intelligence , with microsoft joining forces with startup OpenAI to challenge Google's two- decade stranglehold on internet search. But Thursday's showed there's ample room for both companies to grow .

Silicon Valley has hailed 2024 as the year that companies will begain to deploy generative AI - technology that can create text, images and videos from simple prompts . In back earbings calls.

Alphabet and Microsoft executives said the programs are driving more business for their cloud computing units .

Corporate customers are more open to making long -term investments in their cloud infrastructure, said Tejas Dessai ,research analyst at Global X ETFs. That's helped make the sometimes - volatile industry more reliable.

"'It's quite clear from these earnings from Microsoft and Google that cloud infrastructure  demand is starting to normalize," he said . Rising cloud computing demand comes as a welcome turn for Google ,which has long trailed Amazon .com Inc .and Microsoft in the market .After breaking even for the first time last year ,Google's cloud operation posted first - quarter profit of $900 million - well ahead of analyst's projections of $672.4 million . The unit is viewed as one of Google's best bets for growth as its core search advertising business matures.

We are really excited about the benefit from AI for our cloud customers,"CFO Ruth Porat said on Thursday.

For Microsoft ,generative AI is letting the company wring more spending from its core enterprise clients .CEO Satya Nadella has been infusing Microsoft's entire product line with AI technology from partner OpenAI.

The bet is starting to pay off , with some customers adding AI tools that summarize documents and generate content .

Microsoft and Alphabet needed to deliver a strong performance to avoid spooking investors,who sent shares of Meta Platforms Inc. down Thursday  after the Facebook parent said during its Wednesday's earning that it would invest billions of dollars more than expected on AI.

After investing $14 billion in capital expenditures in the quarter, Microsoft said its spending will keep continue to rise


Compiled By : Pushpendra Maurya

Profession : Data Scientist


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