Four of the world's largest technology companies, Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Microsoft Corporation, reported strong quarterly results on Wednesday, driven by rapid growth in artificial intelligence and cloud computing.
Growth in artificial intelligence and digital services is becoming a major driver of the world economy, amid growing concerns that broader growth could slow down, in part due to rising energy costs linked to the Iran war.
According to the World Bank, the digital economy, which includes advertising, cloud computing and online retail, currently accounts for about %It makes up 15’ini, or roughly $16 trillion (14.7 trillion euros).
Four companies' first-quarter earnings exceeded expectations, giving investors a clearer picture of AI spending and cloud growth across the industry.
Alphabet’ profits as Google’'s AI investments boost revenue and raise market capitalization to $4.5 trillion (€4.14 trillion) is up. While Amazon saw strong demand for its cloud services, Meta exceeded forecasts but offended investors by upgrading its spending plans. Microsoft also reported better-than-expected results.
Together, the numbers highlight both the benefits and rising costs of the tech industry's AI leadership race.
Alphabet’'s first-quarter profit soars as Google’'s big AI bets push shares to new heights
Google’'s move to artificial intelligence continues to bear fruit, with parent company Alphabet Inc. ’e reporting another quarter of strong growth, which helped more than double its already high market value last year.
Alphabet, January-March period, compared to the previous year %It rose 81 percent to $62.6 billion (€57.6 billion) or $5.11 per share. It comes in %It rose 22 percent to $109.9 billion (101.1 billion euros). Both figures were well ahead of analysts' estimates.
As usual, digital ads driven by Google’'s dominant search engine have spearheaded growth. Advertising revenue compared to the previous year %Increased by 16 %It grew by over 10’ in the fourth consecutive quarter.
The fastest-growing division of Google’ remains the Cloud business, backed by AI-driven demand. The revenue here is with the help of agreements with corporate clients and government agencies, including the U.S. military. %It increased by 63 to $20 billion (EUR 18.4 billion).
Growth shows that Alphabet’'s intense spending on artificial intelligence has paid off so far; But investors worry that the company and its peers may be spending too much on a burgeoning technology.
Alphabet’in stock price in long-running trades following results %It has risen more than 7’ and is on track to reach a new high in Thursday's session. The company's market capitalization was about $4.2 trillion (3.86 trillion euros), up from $1.9 trillion (1.75 trillion euros) a year ago. If the trend continues, it could approach $4.5 trillion (€4.14 trillion) and add more than $250 billion (€230 billion) to shareholders in a single day.
These gains cannot be met by some other big AI investors. Microsoft and Meta Platforms experienced a decline in their shares in long-term trades; Meta has announced the outlines of an investment strategy that investors are questioning. %It lost 7 percent of its value. Shares of Microsoft’ also fell temporarily, despite falling below forecasts.
Meta exceeds revenue forecasts, boosts spending outlook
Meta Platforms reported first-quarter results that exceeded expectations with strong growth in earnings and revenue, but also increased its planned spending.
16.64 billion in the previous year. $According to ’a (€15.3 billion) .8 billion with an increase of 61 $ (€24.6 billion) or 10.44 per share $ He made a profit. It comes in %It rose 33 percent to $56.31 billion (51.8 billion euros).
CEO Mark Zuckerberg, “We had a landmark quarter with strong momentum in our applications and the launch of our first model from Meta Superintelligence Labs’, ” said. “We are on our way to delivering personal superintelligence to billions of people.”
Meta said at least 3.56 billion people used at least one of its apps daily in March, in part due to internet outages in ’, Iran, and restrictions in ’, Russia, a slight decrease from December.
Compared to analysts' estimate of $59.48 billion (54.7 billion euros), second-quarter revenue is expected to be between $58 and $61 billion (53.4 billion euros to 56.1 billion euros).
The company raised its capital expenditure estimate for this year from $115 billion to $135 billion, up from $125 billion to $145 billion (from 115 billion euros to 133 billion euros).
While the company increases its artificial intelligence infrastructure and talent expenditures, the workforce %He said he would lay off 10’, or about 8,000 people.
Microsoft reports a steady increase in revenue
Microsoft also expects net revenue due to continued demand for cloud and AI services. %It reported better-than-expected quarterly results, rising 23 percent to $31.8 billion (€29.2 billion).
It comes as growth in Microsoft Cloud and Azure’ compensates for weaknesses in hardware and gaming increased to $82.9 billion (76.3 billion euros).
This year's capital expenditures to investors are based on last year's expenditures. %He said it would reach $190 billion (€163 billion) with an increase of more than 60’.
Microsoft expects growth to continue in the next quarter, supported by strong demand for cloud and AI services, especially on the Azure platform and the broader Microsoft Cloud business.
Amazon’'s high profits and sales in the first quarter were driven by cloud demand
With the help of increasing demand for cloud computing services, Amazon reported strong growth in profits and sales in the first quarter.
Sales in the cloud unit in the January-March period %It posted the fastest growth in 15 quarters, up 28. This is from the previous quarter. and before. ’ is following the growth.
The Seattle-based company also delivered a strong outlook for the current quarter, exceeding analysts' expectations. Shares initially approximate after-hours transactions %2 dropped, then about %3 is up.
Investors are monitoring whether Amazon’ is paying off its $200 billion (€184 billion) investment in artificial intelligence, robotics, semiconductors and satellites. The projected expenditure was 128 billion last year. $According to ’a (€118 billion) %It increased by 60 and caused investors to remain undecided earlier.
Executive chairman Andy Jassy defended the harcama, saying it was aimed at long-term returns.
Recent results show that demand for Amazon’'s services remains strong.
Recent deals with OpenAI, Anthropic and Meta have also strengthened Amazon’'s position.
Amazon, 17.1 billion a year ago $ (€15.7 billion), compared to €30.3 billion $ (€27.9 billion) or 2.78 per share $ Profit is reported.
Net sales are above expectations 1.5 billion, up 17 $’a (€167 billion) increased.
Amazon Web Services generated $37.58 billion (€34.6 billion) in revenue, exceeding forecasts.
For the current quarter, Amazon expects sales of US$194 to US$199 billion (€178 billion to €183 billion), slightly above forecasts.
