Alphabet (GOOG, GOOGL) and Microsoft (MSFT) have exceeded Wall Street estimates in their latest quarterly results, with both companies heavily investing in generative artificial intelligence.
According to Baird Technology Desk Sector Strategist Ted Mortonson and RBC Capital Markets Software Equity Analyst Rishi Jaluria, there is a high demand for AI technology, and both Alphabet and Microsoft are putting substantial capital into developing this innovative technology.
A generational infrastructure build is currently underway at both companies, with Microsoft’s significant spending on infrastructure being supported by investors as long as AI-related businesses continue to show growth. On the other hand, Meta’s AI spending has been received less positively, possibly due to its positioning and unprofitable spending.
Despite a recent drop in stock value, Meta is still considered an attractive investment opportunity. However, Microsoft seems to have the upper hand due to its strong enterprise business. Investors are closely watching how these companies navigate the rapidly growing AI market and how it will impact their overall performance in the future.
It is clear that both Alphabet and Microsoft are committed to staying ahead in the AI race, and their strategic investments in this cutting-edge technology could potentially have a significant impact on their future success in the tech industry.
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