Tech Earnings Arrive in Pairs as Alphabet and Microsoft Report; Amazon is Next

Technology earnings are like buses: investors can wait days for major updates, only for several to arrive at once. Alphabet and Microsoft reported quarterly results, offering sharply different signals about the returns from artificial intelligence (AI) investment, Rupert Steiner reported for Barron’s Daily.

Alphabet and Microsoft reported quarterly results that highlighted the growing divide between technology companies investing heavily in artificial intelligence and those generating stronger returns from AI services. [Photo: Lambtron, Wikimedia Commons]

Alphabet’s results raised concerns about whether its substantial AI spending is generating sufficient returns.

Despite strong growth at Google Cloud, weaker performance in other parts of the business and heavy infrastructure costs weighed on investor sentiment, sending the company’s shares lower.

Microsoft, meanwhile, delivered results that investors viewed more favorably.

Its Azure cloud business recorded strong growth, reinforcing the company’s position as one of the major technology companies finding ways to monetize AI demand.

Amazon is scheduled to report next, adding another closely watched set of results to the technology earnings season.

Technology was not the only focus for investors. Bond markets also reacted to the Federal Reserve’s decision to leave interest rates unchanged.

In the travel sector, Norwegian Cruise Line Holdings reported third-quarter results above its guidance.

The company attributed the performance partly to stronger close-in bookings and higher onboard spending, while cost discipline helped keep expenses below expectations despite elevated fuel prices.