![\"im-870352\"](\"https:\/\/www.1ai.net\/wp-content\/uploads\/2023\/10\/im-870352.jpg\" "\\"im-870352\\"")
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Microsoft<\/a>andGoogle<\/a>Both reported mostly strong earnings on Tuesday, but mixed reactions from investors suggestedWall Street<\/a>Now only care about artificial intelligence.<\/p>\n While Microsoft shares MSFT, +0.37% rose 4% in after-hours trading following the company\u2019s latest report, Alphabet shares GOOG, +1.61%GOOGL, +1.69% fell 6% as Wall Street sensed that artificial intelligence was performing differently in the company\u2019s cloud business. Companies looking to beef up their AI offerings often look to add AI services for their customers through other cloud services so they don\u2019t have to do as much in-house development themselves. In addition, AI products, from chatbots to tools that can simplify report writing, require more computing power, and both Azure and Google Cloud are beginning to offer new software applications to meet those needs.<\/p>\n Microsoft CEO Satya Nadella called AI a "unique and different" factor contributing to Azure's trends. "Given our leadership, we're seeing a whole new project launch that's AI projects," he said in response to an analyst question about the sustainability of cloud growth rates.<\/p>\n Additionally, Microsoft has invested heavily in ChatGPT creator OpenAI, offering Azure OpenAI services that are being used by more than 18,000 organizations. Some of these customers are new to Azure.<\/p>\n Microsoft Chief Financial Officer Amy Hood predicted that Azure revenue growth (at constant currency) should be approximately $261T in the second fiscal quarter, driven by new workload trends and growing contributions from AI.<\/p>\n Investors seemed less convinced that Alphabet was seeing the same tailwinds in its Google Cloud business, especially since the segment showed its slowest quarterly growth since Google began reporting results in 2019. Cloud revenue was $8.4 billion, up 22%, $250 million less than Wall Street's consensus estimate, Baird analyst Colin Sebastian said, overshadowing an upbeat performance in the company's advertising business.<\/p>\n When an analyst asked Alphabet executives about slowing revenue growth in its cloud business, CEO Sundar Pichai was vague but said customers are choosing where to spend their IT budgets.<\/p>\n \u201cOn cloud, I would say that overall, we do start to see customers wanting to optimize spend,\u201d Pichai said. \u201cGiven some of the other challenges that customers are facing, we\u2019re inclined to help customers, so that\u2019s a factor.<\/p>\n Alphabet is seeing "strong interest in AI," but whether this contributes significantly to its financial results remains to be seen.<\/p>\n \u201cGoogle Cloud missed consensus revenue expectations (although in line with Baird) on slowing growth, which we believe is consistent with the view that newer Gen-AI workloads will take time to move the needle,\u201d Sebastian wrote in a note to clients.<\/p>\n Max Willens, senior analyst at Insider Intelligence, added that Google Cloud is facing stiff competition, and while the business appears attractive to AI startups and "might bear fruit in the long run, right now it won't help Google Cloud enough to satisfy investors."<\/p>\n Wall Street is clearly hoping that AI can drive better growth rates and help offset sluggish macroeconomic trends. The poster child for this dynamic is Nvidia Corp. NVDA, +1.60%, which is expected to single-handedly drive earnings growth in the information technology sector thanks to booming demand for its AI hardware.<\/p>","protected":false},"excerpt":{"rendered":" Microsoft and Google both reported mostly strong results on Tuesday, but the mixed reaction from investors suggests that Wall Street is now only concerned about artificial intelligence. While Microsoft stock MSFT, +0.37% was up 4% in after-hours trading after the company's latest report, Alphabet stock GOOG, +1.61%GOOGL, +1.69% was down 6% as Wall Street sensed that artificial intelligence was behaving differently in the company's cloud business. Microsoft surprised investors with a 28% constant-currency growth rate for its Azure cloud business, above the company's own forecasts and analysts' average forecast of 25.6% growth. While Microsoft continues to see \"optimization\" challenges as customers remain aware of their spending, the company's Azure cloud business is still seeing a lot of growth.<\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[146],"tags":[279,280,281],"collection":[],"class_list":["post-871","post","type-post","status-publish","format-standard","hentry","category-news","tag-279","tag-280","tag-281"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.1ai.net\/en\/wp-json\/wp\/v2\/posts\/871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.1ai.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.1ai.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.1ai.net\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.1ai.net\/en\/wp-json\/wp\/v2\/comments?post=871"}],"version-history":[{"count":0,"href":"https:\/\/www.1ai.net\/en\/wp-json\/wp\/v2\/posts\/871\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.1ai.net\/en\/wp-json\/wp\/v2\/media?parent=871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.1ai.net\/en\/wp-json\/wp\/v2\/categories?post=871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.1ai.net\/en\/wp-json\/wp\/v2\/tags?post=871"},{"taxonomy":"collection","embeddable":true,"href":"https:\/\/www.1ai.net\/en\/wp-json\/wp\/v2\/collection?post=871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nMicrosoft surprised investors with constant-currency growth of 28% for its Azure cloud computing business, above the company's own forecast as well as the average analyst forecast of 25.6% growth. While Microsoft continues to see "optimization" challenges as customers remain conscious of their spending, the company is also benefiting from the tailwind of artificial intelligence in cloud computing.<\/p>\n