Google and Microsoft Corp shares rallied yesterday as the technology bellwethers showed that hefty investments into artificial intelligence (AI) could reap more immediate revenue returns, a sharp contrast to Meta Platforms Inc’s view that AI is a long-term bet.
Microsoft’s shares advanced 3.84 percent in trading before the US market opened, after the company beat Wall Street estimates for third-quarter revenue and profit, driven by gains from the adoption of AI across its cloud services.
Google-parent Alphabet Inc soared an even-steeper 11.5 percent, poised to top US$2 trillion in market value, after not only beating quarterly estimates, but also rewarding investors with its first-ever dividend and a US$70 billion stock buyback plan.
Photo: Bloomberg
That sparked a 1 to 3 percent rise in the shares of other big technology companies, including Amazon.com Inc, Apple Inc, Nvidia Corp and even Meta Platforms, whose stock price tumbled more than 10 percent on Thursday as the social media firm signaled its costly AI bets could take years to pay off.
The technology titans have been locked in a fierce battle in the race for generative AI, which can create text, videos and photographs from prompts and is seen as the next frontier, but analysts are divided over whether Alphabet or Microsoft wears the AI crown.
“Microsoft continues to put together masterpiece after masterpiece as this quarter represents its dominant position in the AI revolution,” Wedbush Securities analyst Daniel Ives said.
However, Scott Devitt, Ives’ colleague at Wedbush, said: “We think the results further validate Google’s position as a leading AI beneficiary.”
Microsoft has access to OpenAI’s coveted AI technologies, which it has been working to infuse across its product portfolio, such as in Bing, Microsoft 365 and, most importantly, the Azure cloud-computing platform.
“AI services contributed seven points of growth” to the 31 percent jump in revenue from Azure, Microsoft finance chief Amy Hood said.
While Goldman Sachs said Microsoft is well-placed to replicate the success of its Azure buildout playbook in its AI-laced suite, Oppenheimer Holding Inc predicted the company’s AI dominance would be reminiscent of a couple of decades back.
“We see it revisiting its PC-era-type dominance, but of a 1,000 times larger market as it is the dominant AI platform for enterprises,” analyst Timothy Horan said.
On the other hand, Alphabet chief executive officer Sundar Pichai touted Google’s AI offerings as a boon to its market-leading service — core search results.
“Google’s Q1 ranked somewhere north of outstanding... and management appears in better control of its own AI narrative,” RBC analyst Khadijah Gibson said.
“Aside from a similarly-sized capex guide up as Meta, Google is more than weathering the GenAI concerns,” Gibson added.
If pre-market gains held, Alphabet, Wall Street’s fourth-most valuable company, would cross the US$2 trillion in market value on an intraday basis — a milestone it last hit, but failed to hold on to, three years ago, LSEG Datastream said.
Three of the so-called “Big Six” have reported quarterly results so far. Of the remaining, Amazon, now the only one that does not pay a dividend, is due to report results next week.
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
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