Cloud spending by businesses preparing to roll out AI features powered a rebound in growth for Microsoft's Azure platform in its first quarter, lifting the shares of the Windows maker
"Demand for artificial intelligence drove Microsoft's growth. Demand among Google's larger clients was similar, but the firm is more exposed to high-growth and startup clients, which have been more aggressive with cost-control efforts," Morningstar analyst Ali Mogharabi said. Strong AI use was responsible for a 3 percentage point boost to the Microsoft's cloud business in the September quarter.
Analysts said that will further drive up adoption of its AI services. Alphabet has also deployed AI in products such as its flagship Pixel phones and had more recently tested adding generative AI to its search engine. Many analysts were also optimistic about strength in Alphabet's core search business, but they warned the weakness in the cloud business would continue.
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