Tech giants reported eye-watering figures linked to artificial intelligence investment.
Meta, Apple, Microsoft, and Amazon all reported quarterly earnings this week, and there was a common thread tying them together: a boom in AI spending and plans to increase it even more, beyond analyst expectations.
Although capital expenditures above expectations often don’t tend to make investors particularly happy, it had pretty much the opposite effect this week, especially for Meta and Microsoft, both of which saw a pop in their stock following the releases.
And for Microsoft, which posted its largest ever quarterly capital expenditure forecast, the boost in shares led the tech giant to become the second-ever company to hit $4 trillion market valuation, when it briefly breached the threshold on Thursday.
The move was largely because both Meta and Microsoft finally had the revenue to show for their investments.
Meta’s ad revenue, which is a huge moneymaker for the tech giant, for the past quarter came in a couple billion dollars ahead of Wall Street expectations, and CEO Mark Zuckerberg attributed that to the deployment of artificial intelligence in the ad system. Zuckerberg went on to assure investors that this surprise increase in revenue was bound to continue, saying that his multi-billion dollar investment into building a team dedicated to creating “superintelligent” AI will lead to even more payoffs for its advertising business.
Microsoft reported that sales were up 18% from last year and that revenue for its cloud computing platform Azure had surpassed $75 billion this fiscal year, up 34% from last year. Revenue from the company’s productivity and business processes segment also exceeded expectations, and company executives shared that the business software sales were boosted partially thanks to widespread adoption of its AI product Microsoft 365 Copilot.
