What We Learned From Big Tech Earnings in the Past Week

Artificial intelligence (AI) was a cardinal attraction of net reports from large tech companies complete nan past week, pinch reactions to results from Meta Platforms (META), Amazon (AMZN), Microsoft (MSFT), and Apple (AAPL) suggesting it mightiness beryllium getting harder for large tech to wow investors pinch their AI plans.

Many of nan companies person ramped up spending connected AI, raising concerns astir AI's costs, and banal moves aft nan latest net this week bespeak immoderate person had greater occurrence than others successful convincing investors.

Meta's Early AI Gains Ease Worries About Spending

Meta shares gained aft nan institution announced better-than-expected results and CEO Mark Zuckerberg highlighted its advances successful AI.

This week, nan institution lifted nan little extremity of its capital expenditures (CapEx) guidance for nan afloat twelvemonth to $37 cardinal from $35 billion, while maintaining nan precocious extremity astatine $40 billion. Meta besides said it plans to summation CapEX further successful 2025. Last quarter, Meta shares had tumbled aft nan institution reported net amid worries astir overspending to put successful AI.

However, investors seemed little concerned pinch Meta's multi-billion dollar AI spending arsenic Zuckerberg reported early gains from nan tech. The institution said it is leveraging AI to amended recommendations for societal contented and ads connected its platforms to optimize personification engagement and make ads "more effective,” benefitting Meta's advertisement business.

Microsoft, Amazon Shares Fall Amid Growth Concerns

By contrast, weaker-than-expected maturation successful Microsoft's cloud segment overshadowed its net beat, sending shares lower.

On nan company's net call, CFO Amy Hood said AI-related capacity falling short of request held backmost Microsoft's unreality gains. CEO Satya Nadella said that nan institution is investing successful AI based connected request signals, and expects AI spending will thief Microsoft raise capacity to meet request successful nan 2nd half of fiscal 2025.

Amazon shares besides fell aft nan e-commerce elephantine missed gross estimates and issued anemic guidance for nan coming quarter. Company executives highlighted Amazon's position to summation from Amazon Web Services (AWS) customers preparing their unreality infrastructure for generative AI (GenAI) opportunities, but it wasn't capable to boost enthusiasm for nan stock.

Apple Investors Waiting connected iPhone 16 and Apple Intelligence Launches

Apple shares made flimsy gains Friday, a time aft its net hit estimates arsenic investors hold for nan expected merchandise of nan iPhone 16 and Apple Intelligence successful nan fall.

CEO Tim Cook said that Apple's AI features, which were unveiled successful June, will travel to users successful staggered launches, alternatively than successful 1 package update, pinch ChatGPT integration coming to iPhones by nan extremity of nan almanac year.

Apple's preamble of AI features has raised expectations they could spur an accelerated upgrade rhythm arsenic nan company's record-high instal guidelines could upgrade to newer devices to entree Apple Intelligence.