Microsoft is surpassing Alphabet in the race to make money with artificial intelligence generative thanks to its early bets on OpenAI and its focus on large clients, which raises fears that Google’s parent company could lose share in the cloud computing market.
Cloud spending by companies preparing to deploy AI features drove a rebound in growth of the Azure platform of Microsoft in its first quarter, lifting the Windows developer’s stock almost a2.9% on Wall Street.
But in stark contrast, the growth of the company’s cloud unit Alphabet reached its lowest level in almost three years, as its large exposure to smaller customers slowed growth, making the company’s stock fall 9% on the Nasdaq.
Why Microsoft positioned itself better than Google
In the battle to take advantage of the next growth engine For the cloud business, Microsoft has focused on its core enterprise customers who already use many of its software services, while Google has turned to startups.
“Demand for artificial intelligence promoted the growth of Microsoft. Demand among Google’s largest clients was similar, but the firm is more exposed to high-growth clients and startups, which have been more aggressive with cost control efforts,” said Morningstar analyst Ali Mogharabi.
If stock losses continue, Alphabet was preparing to erase more than $100 billion from its market value, underscoring fears that its focus on startups and slower rollout of AI services were slowing the technology’s momentum.
Microsoft i stock gainsThey are going to add about $90 billion to their market capitalization.
Google’s corporate report
AlphabetGoogle’s parent company, has presented its results for the third quarter of 2023. In them it has reported a net profit of US$19,689 million, a figure higher than the US$13,910 million achieved in the same period of 2022.
This translates into a earnings per share (EPS) of US$1.55above the 1.06 dollars per share in the same quarter of the previous year and exceeding what was expected by the consensus, which anticipated US$1.45.
As for the incomethe entity has reported u$s76,693 million compared to the US$69,092 million in the same period of 2022 and the US$75,970 million anticipated by analysts.
The advertising revenue of the company in the third quarter of 2023 have stood at US$59,647 million, experiencing an increase from the US$54,482 million in the third quarter of the previous year.
When it comes to one of its main businesses, Youtubeadvertising revenues have risen to US$7,952 million compared to US$7,071 million for the period ending in September 2022 and the expected US$7,810 million.
With respect to Google Cloudrevenues have been US$8,411 million, a figure better than the US$6,868 million of the third quarter of the previous year, but lower than what was anticipated by the consensus, US$8,640 million.
Source: Ambito
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