Why Big Tech earnings are a crucial report card for the AI boom and its future
Source: Fortune ·
Two things were clear from Alphabet, Microsoft and Amazon earnings: AI demand is hot, and spending on it is monstrous.
From the source
Fortune’s Morgan Chittum here. Like death and taxes, one thing is inevitable: Wall Street will take every chance it gets to look for cracks—or signs of strength—in the AI return on investment. At least, that’s how it’s been since ChatGPT took off in 2022 and AI became one of the biggest investment themes in recent history. The market’s latest North Star? Big Tech earnings. This week, Amazon, Alphabet, and Microsoft gave us a fresh look. It was a mixed bag, but two things were clear: AI demand is hot, and spending on it is monstrous. Alphabet especially was in the public markets crosshairs: The Google giant’s results showed why a booming cloud division isn’t always enough. Google Cloud revenue more than doubled in the third quarter, while capital expenditures reached $51.4 billion. But earnings and revenue still missed, sending shares down Thursday almost 13% and erasing $500 billion in market value. As Fortune’s Amanda Gerut wrote: Investors are concerned about sluggish growth in…