Mega-cap tech earnings show a clear divergence: Alphabet (GOOGL) shares plunged 11.5% premarket after disappointing search ad results and surging AI-related spending raised concerns about profitability . In contrast, Microsoft (MSFT) climbed 1.8% on a strong cash flow beat and robust cloud growth .
Key takeaways:
- Alphabet (GOOGL): Missed on most lines, with search growth slowing and AI monetization at a lower rate than traditional search. AI-related spending accelerated, impacting cash burn .
- Microsoft (MSFT): Delivered strong Azure growth (48% YoY) and maintained spending discipline, leading to positive free cash flow .
This highlights investor scrutiny on AI spending efficiency and the varying impacts on tech giants' bottom lines.
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