NEW YORK - Google-parent Alphabet impressed Wall Street with its latest quarterly earnings on Wednesday, as big tech rival Meta left investors lukewarm amid concerns about the huge cost of AI development.
The earnings -- along with reports from Microsoft and Amazon -- came as AI titans pump billions of dollars into cloud computing and artificial intelligence, vying to lead in technology that they insist will transform all aspects of life.
Shares in Alphabet rose by more than six percent in after-hours trading as investors lauded the company's success in making the pivot to AI and solid revenue across its major divisions.
The tech giant reported a profit of $62.6 billion on revenue just shy of $110 billion, easily eclipsing the same period a year earlier and beating market expectations.
Shares of Alphabet, maker of Gemini AI, have risen 26 percent in the past six months while rivals Meta and Microsoft have watched their shares dive nearly 11 percent and 22 percent respectively in the same period.
"Alphabet remains one of the top names in the AI Revolution given the vertically integrated approach across Search, YouTube, and its ad cohort which continues to accelerate," said Dan Ives of Wedbush Securities.
Social media behemoth Meta, which rivals Google for advertising revenue, meanwhile saw its shares slide by more than six percent, despite topping earnings expectations for the recently ended quarter.
Meta sent tremors through its results by announcing that expenses at the tech giant notched up to $33.4 billion as it chases "superintelligence," including a hiring spree for top AI talent.
Meta also increased its projected capital spending -- mainly for data centers -- for the year by $10 billion, to a new range of $125 billion to $145 billion.
The company reported a profit of $26.8 billion on revenue of $56.3 billion in the quarter.
AI investments from the company that owns Instagram and Facebook are not directly tied to a revenue stream as with Amazon, Microsoft and Google, which sell AI capabilities to cloud clients.
Meta has moved to rein in costs to help fund its AI ambitions, announcing last week that it would cut roughly 8,000 jobs and leave 6,000 open roles unfilled.
- AFP