Alphabet and Microsoft Drive Technology Stock Surge with AI-Powered Earnings

The impressive earnings reports from these tech giants helped alleviate concerns about the profitability of their substantial AI investments, particularly after Meta's cautious forecast.

Tech titans Microsoft and Alphabet enjoyed significant gains driven by AI-driven cloud demand, with Alphabet's market value surpassing $2 trillion following its debut dividend announcement. The broader tech and chip sectors also saw uplift from these strong earnings.

Alphabet's stock surged by 10%, pushing its market cap above $2 trillion for the first time, accompanied by plans for dividends and a massive stock buyback program.

Microsoft also saw a nearly 2% rise, adding $54 billion to its market value, boosted by a 31% revenue increase at Azure fueled by AI services like Copilot.

Google reported a 28% jump in cloud revenue, largely driven by Google Workspace's AI-powered features.

These results contrasted sharply with Meta Platforms' disappointing forecast, which saw a 10% drop in its stock value.

Amazon.com also experienced a 3.4% increase in anticipation of its upcoming earnings report.

Both Microsoft and Alphabet ramped up capital expenditures to expand their AI infrastructure, reflecting ongoing investment in AI technologies. Analysts responded positively, with numerous price target increases for both companies.

Looking ahead, analysts are keen to see how AI investments translate into revenue and profit growth, particularly in application areas like Microsoft Copilot, which are expected to contribute significantly to future earnings.