Microsoft and Alphabet just dropped their latest earnings, and they totally crushed it—beating Wall Street’s expectations big time. Their bosses are saying a huge thanks to their AI investments for the hefty profits. Dan Ives from Wedbush was on CNBC saying this is like striking gold for them.
Everyone just got a taste of what pouring money into AI can do.
Last Thursday, right after Meta’s so-so first-quarter results made Wall Street a bit shaky, Microsoft and Alphabet showed that AI’s definitely where the money’s at.
Microsoft pulled in $21.9 billion in profits for the quarter ending March 31—that’s a 20% jump from last year. And Google’s parent, Alphabet, wasn’t far behind with $23.7 billion in profits, up a whopping 57% from last year.
Both companies did better than what the analysts were guessing, and they’re tipping their hats to AI for the boost.
On the earnings call, Sundar Pichai from Alphabet said a lot of their success this quarter comes from Google’s search engine, but he also made sure to shout out Google Cloud. They’ve rolled out AI services with their new AI model, Gemini.
“In the Cloud, we’ve rolled out over 1,000 new products and features in just the last 8 months. At Google Cloud Next, we had over 300 customers and partners talking up their wins with our generative AI, including big names like Bayer, Cintas, Mercedes Benz, Walmart, and loads more,” Pichai told everyone on the call.
Alphabet’s CFO, Ruth Porat, added that their cloud business made $9.6 billion, and AI’s playing a bigger role in that.
Microsoft also said their cloud stuff helped them do well this quarter.
Their cloud products, including Azure, brought in $26.7 billion. They said Azure’s growth, with a 7% bump from AI, is partly thanks to stuff like Microsoft Copilot, which is an AI assistant for Azure.
“Microsoft Copilot and Copilot stack are setting off a new wave of AI-driven changes, making things better across all sorts of jobs and industries,” said Microsoft CEO Satya Nadella.
Investors are pretty stoked with how Microsoft and Alphabet are doing, pushing their stocks up while Wall Street’s still feeling a bit bummed from Meta’s first quarter report.
Dan Ives summed it up on CNBC: just 24 hours after Meta’s results, the mood’s totally changed. He said Microsoft and Alphabet have this treasure trove of AI talent and data, and now they’re really starting to make money off it. It’s like hitting the jackpot with AI.
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