Alphabet, Microsoft Beat Q2 Expectations Driven by AI, Cloud Growth
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Alphabet, Microsoft Beat Q2 Expectations Driven by AI, Cloud Growth

Alphabet and Microsoft posted strong Q2 earnings driven by AI and cloud computing. Stocks surge in premarket trading today.
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Alphabet Inc. (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT), two of the world’s largest technology companies, have reported strong second-quarter earnings driven by their investments and advancements in artificial intelligence (AI) and cloud computing.

Both companies surpassed Wall Street expectations, with Alphabet reporting a revenue of $80.54 billion and an adjusted EPS of $1.89, while Microsoft posted a revenue of $61.86 billion and an EPS of $2.94.

The impressive results have led to significant gains in their respective stock prices, with Alphabet’s stock surging by approximately 16% and Microsoft’s stock increasing by 4.04% in premarket trading today at the time of writing.

Alphabet Surpasses Expectations with Strong Q2 Earnings, Driven by AI and Cloud Growth

Alphabet Inc., Google’s parent company, announced its second-quarter earnings results, surpassing Wall Street expectations. The company reported revenue of $80.54 billion, marking a 16% increase from the previous year and beating the expected $78.71 billion. Adjusted earnings per share stood at $1.89, above the estimated $1.51.

Alphabet declared a cash dividend of $0.20 per share to reward shareholders and approved stock repurchases of up to an additional $70 billion. The company emphasized its strong position in the AI market, highlighting the integration of AI tools into Google Search, YouTube, and its Cloud services. Incorporating AI into Google Search is revolutionizing how users interact with the web.

Alphabet’s capital expenditures for the quarter amounted to $12 billion, primarily tied to servers and data centers, signaling the company’s significant ongoing investment in AI capabilities. The Cloud division witnessed impressive growth, with revenue increasing nearly 30% to over $9 billion. The overall strong performance was attributed partly to advancements and integrations in AI technology.

Following the earnings release, Alphabet’s stock price surged by approximately 16%, reflecting strong market approval of the results and the company’s strategies. In premarket trading, the stock price stood at $176.18, showing a substantial increase of +18.23 (+11.54%).

Microsoft’s Q2 Earnings Soar on the Back of AI and Cloud Computing Growth

Microsoft reported impressive second-quarter earnings, with a revenue of $61.86 billion, representing a 17% increase from the previous year. Earnings per share rose by 20% to $2.94, showcasing the company’s strong financial performance.

The significant revenue growth was primarily driven by the Microsoft Cloud division, which reached $35.1 billion, up 23% from the previous year. This growth was attributed principally to AI innovations and the expansion of cloud computing services. Azure and other cloud services grew by an impressive 31%, while Office Commercial products and cloud services saw a 13% increase.

Microsoft, highlighting its heavy investments in AI, which have contributed significantly to the growth of its cloud computing services. The company has positioned itself as a leader in AI transformation across projects such as the $1.1 billion contract with Coca-Cola for AI and cloud services.

With a nearly $3 trillion market cap, Microsoft remains the world’s largest public company by market value. During the quarter, the company returned $8.4 billion to shareholders through repurchases and dividends, demonstrating its commitment to creating value for investors.

In premarket trading, Microsoft’s stock price stood at $415.15, showing a solid increase of +16.11 (+4.04%). The company’s strong earnings results and strategic focus on AI and cloud computing have instilled confidence in investors, positioning Microsoft for continued growth and success in the rapidly evolving technology landscape.

Do you think AI will continue to dominate the investing narrative for now? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.