Updated April 26th, 2024 at 15:35 IST

Tech giants Alphabet, Microsoft surge on strong AI performance

Microsoft saw its shares rose by 3.84% in pre-market trading after surpassing Wall Street's expectations for third-quarter revenue and profit.

Reported by: Business Desk
Microsoft and OpenAI's $100 billion AI Supercomputer Project | Image:Pexels

Alphabet, Microsoft surge: Tech behemoths Alphabet and Microsoft saw jumps in their stock prices on Friday following impressive showcases of the immediate revenue returns from their investments in artificial intelligence (AI). This stands in contrast to Meta Platforms' outlook, which emphasizes AI as a long-term investment.

Microsoft saw its shares rose by 3.84 per cent in pre-market trading after surpassing Wall Street's expectations for third-quarter revenue and profit. This success was attributed to the widespread adoption of AI across its cloud services.


Meanwhile, Google-parent Alphabet witnessed 11.5 per cent surge, positioning itself to potentially surpass a $2 trillion market value. The surge came on the heels of not only beating quarterly estimates but also announcing its first-ever dividend and unveiling a $70 billion stock buyback plan.

The positive performance of these tech giants also had a ripple effect on other major tech companies, with Amazon, Apple, Nvidia, and even Meta Platforms witnessing a rise in their share prices. Meta Platforms had seen a drop of over 10 per cent the previous day due to concerns over the timeline for returns on its AI investments.


The competition between tech titans in the field of generative AI, capable of creating content like text, videos, and photos from prompts, has intensified. Analysts remain divided over whether Alphabet or Microsoft holds the crown in AI innovation.

According to Wedbush analyst Daniel Ives, Microsoft's latest results underscore its dominant position in the AI revolution. However, his colleague Scott Devitt believes that Google's performance further solidifies its leading position in AI.


Microsoft's access to OpenAI's advanced AI technologies, integrated across its product portfolio including Bing, Microsoft 365, and Azure cloud-computing platform, has been a significant driver of its AI success.

Goldman Sachs predicts that Microsoft's AI prowess will mirror its success in building out Azure, while Oppenheimer foresees Microsoft dominating the enterprise AI market on a scale similar to its dominance in the PC era.


On the other hand, Alphabet CEO Sundar Pichai highlights Google's AI offerings as integral to its core search results, with RBC analyst Khadijah Gibson praising Google's Q1 performance and management's control over its AI narrative.

If premarket gains hold, Alphabet is poised to surpass $2 trillion in market value, a milestone it previously reached three years ago.


(With Reuters inputs)


Published April 26th, 2024 at 15:35 IST