Cloud computing growth is the new benchmark
Summary
Microsoft (US:MSFT), Amazon (US:AMZN) and Alphabet (US:GOOGL) may be the markets darlings, but right now the only thing investors really care about is their cloud computing performance. Microsoft and Alphabet both reported their recent third-quarter results on the same day, and both beat consensus earnings expectations. Microsoft’s earnings beat was built on the back of cloud computing while Alphabet’s was due to a recovery in its advertising market. This extra growth came from artificial intelligence (AI), with chief financial officer Amy Hood confirming that roughly three percentage points came from AI services. “While the trends from [the] prior quarter continued, growth was ahead of expectations, primarily driven by increased graphics processing unit (GPU) capacity and better-than-expected GPU utilisation of our AI services,” said Hood.