Major tech companies post huge earnings, sparking Wall St frenzy

News.com.au

7 days ago

Tech giants Meta and Microsoft have posted huge earnings, shocking Wall St and sending their stock prices soaring on after hours trading.
Meta reported its revenue jumped 22 per cent year-on-year to US$47.5 billion ($76.73 billion) as the social media giant continues investing heavily in artificial intelligence (AI).
The Facebook and Instagram owner's share price soared as much as 12 per cent in after-hours trading, with investors buoyed by the company's growing advertising business and a rise in users across its family of platforms.
'We've had a strong quarter both in terms of our business and community,' chief executive Mark Zuckerberg said.
'I'm excited to build personal superintelligence for everyone in the world.'
Meanwhile competitor Microsoft revealed its profit soared above expectations in the recently ended quarter, driven by its cloud computing and AI units.
Microsoft reported revenue of US$76.4 billion ($118.56 billion), some $29.9 billion of which was brought in by its Intelligent Cloud business, with US$27.2 billion ($45.3 billion) in profit.
'Cloud and AI is the driving force of business transformation across every industry and sector,' Microsoft chief executive Satya Nadella said in an earnings release.
'We're innovating across the tech stack to help customers adapt and grow in this new era.'
Microsoft's share price rose about eight per cent after trading closed for the day on Wednesday, US time.
The news came as Wall St was mostly down due to the Federal Reserve's decision to keep interest rates on hold, despite pressure from Donald Trump.
Meanwhile, the ASX200 here in Australia is down 0.25 per cent.
AI boom, job cuts
In July, Microsoft slashed almost four per cent of its global workforce as it sought to cut layers of middle management and leverage new technologies.
'We continue to implement organisational changes necessary to best position the company and teams for success in a dynamic marketplace,' a Microsoft spokesperson said in an email.
The cuts followed another round in May that saw about 6,000 positions culled from its global workforce.
Meta posted a net profit of US$18.3 billion ($28.4 billion), compared with US$13.5 billion ($20.9 billion) in the same period last year.
Meta's Family of Apps segment, which includes Facebook, Instagram, WhatsApp and Messenger, saw daily active users reach 3.48 billion in June, up six per cent from a year earlier.
The company significantly increased its capital expenditures to US$17 billion ($26 billion) in the quarter, primarily for AI infrastructure investments.
Mr Zuckerberg has embarked on a major AI spending spree, poaching top researchers with expensive pay packages from rivals like OpenAI and Apple as he builds a team to pursue what he calls AI superintelligence.
'To win the superintelligence race requires the best of the best talent and Meta's been on a roll when it comes to recruiting top AI talent. Money talks and Meta has plenty of it,' Forrester research director Mike Proulx said.
The big question is whether Wall St will continue backing the expensive strategy.
Tech behemoths are locked in an AI arms race as they invest heavily in the field, aiming to ensure the technology benefits society and generates profits in the not-so-distant future.