Stocks of Alphabet and Microsoft are rising on signs of near-term gains from AI

As the tech titans demonstrated that significant investments in artificial intelligence may provide more immediate financial returns—a stark contrast to Meta Platforms’ belief that AI is a long-term wager—Google and Microsoft saw a spike in value on Friday.

Microsoft is on track to surpass $2 trillion in market value after beating quarterly estimates and rewarding investors with a $70 billion stock buyback plan, in addition to beating Wall Street estimates for third-quarter revenue and profit. The company’s shares advanced 3.84% in trading prior to the opening of the U.S. market, driven by gains from the adoption of AI across its cloud services.
The stock prices of other large tech firms, including Apple, Nvidia, Amazon.com, and even Meta Platforms, rose by 1% to 3% as a result. On Thursday, the stock price of the social media company fell by almost 10% as it hinted that its expensive AI efforts would not pay off for years.

The quest for generative AI, which is thought to be the next big thing in technology and can produce text, movies, and images in response to cues, has seen the giants of computing engage in a bloody war. But experts can’t agree on who dominates AI—Microsoft or Alphabet.
“Microsoft continues to put together masterpiece after masterpiece as this quarter represents its dominant position in the AI Revolution,” Daniel Ives, a Wedbush analyst, said.
However, Wedbush colleague Scott Devitt, who works with Ives, said, “We think the results further validate Google’s position as a leading AI beneficiary.”
Microsoft has access to the highly sought-after AI technology from OpenAI, which it has been attempting to integrate into a variety of its products, including Microsoft 365, Bing, and—most significantly—the Azure cloud computing platform.
According to Microsoft finance director Amy Hood, “AI services contributed seven points of growth” to the 31% increase in income from Azure.
Oppenheimer said Microsoft’s AI dominance will be reminiscent of a few decades ago, despite Goldman Sachs saying the firm is well-positioned to reproduce the success of its Azure build-out model in its AI-laced suite.
“We see it revisiting its PC-era dominance, but in a 1000x larger market as it is the dominant AI platform for enterprises,” analyst Timothy Horan said.
However, Alphabet CEO Sundar Pichai praised Google’s AI capabilities as a benefit to its flagship product, core search results.
RBC analyst Khadijah Gibson said, “Google’s Q1 ranked somewhere north of outstanding… and management appears to be in better control of its own AI narrative.”
According to the LSEG Datastream, Alphabet, Wall Street’s fourth-most valuable company, will cross $2 trillion in market value on an intraday basis if premarket gains hold. This is a milestone the company last hit but failed to hold on to three years ago. “Aside from a similarly-sized capex guide as Meta, Google is more than weathering the GenAI concerns.”
Thus far, three of the ‘Big Six’ have released their quarterly results. Amazon, the only company left that does not pay a dividend, is scheduled to release its results the following week.