Alphabet and Microsoft see earnings rise on AI-infused cloud

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Alphabet reported a quarterly profit of US$19.7 billion powered by ads, YouTube and cloud services.

Computing colossus Microsoft exceeded expectations to report a net income of US$22.3 billion from July to September.

Alphabet share prices, however, slipped more than 5% to US$129.67 in after-market trades on Tuesday despite beating overall earnings expectations as investors had evidently hoped Google Cloud would be doing better. But Alphabet has largely been seen as playing catch up with Microsoft, with questions over whether the mighty Google search engine will withstand developments in AI.

“It is a testament to the nature of Google’s market dominance in search and ads that it can beat estimates and have its stock sag immediately afterwards,” said Insider Intelligence analyst Max Willens. Revenue in Alphabet’s cloud division, which infuses AI into its services, was US$8.4 billion in the quarter, compared to US$6.7 billion in the same period a year earlier.Tech giant Microsoft said Tuesday its profits rose in the latest quarter, boosted by its strength in the closely watched cloud services segment.

“We’re making the age of AI real for people and businesses everywhere,” Microsoft CEO Satya Nadella said on an earnings call.

 

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