Investment in artificial intelligence (AI) continues to drive the prosperity of the technology industry, fueled by strong performances from Google, Microsoft, and Snap. However, despite positive first-quarter results, Meta's stock price experienced a sharp decline.
According to Fast Company, AI is becoming a catalyst for growth, allowing investors to profit from the advantages of this new technology.
Following the release of Snap's financial report, its stock price soared by over 30%, exceeding analysts' expectations. The company expects to reach 431 million daily active users, an increase of 9 million.
Microsoft and Google's thriving AI businesses
Alphabet, Google's parent company, saw its stock price rise by 13% and announced a dividend of 20 cents per share and a $70 billion stock buyback plan. Microsoft, which has invested billions of dollars in AI infrastructure, also experienced a moderate increase in its stock price.
In the Azure cloud computing division, Microsoft reported a total revenue of $26.7 billion, a 20% year-over-year growth. CEO Satya Nadella outlined how AI software plugins are driving further profits for the world's largest publicly traded company.
Nadella stated, "Microsoft's Copilot and Copilot stack are ushering in a new era of AI transformation, improving business outcomes in every role and industry."
Meanwhile, Alphabet CEO Sundar Pichai welcomed the prosperity brought by technological advancements, as the company's cloud revenue reached $9.6 billion, with the "Gemini era" underway.
Pichai said, "The company's momentum is strong. Our leadership in AI research and infrastructure, along with our global product footprint, positions us well for the next wave of AI innovation."
Why did Meta's stock price suffer?
As the parent company of Facebook, Messenger, Instagram, WhatsApp, and Threads, Meta's stock price plummeted by 10.5% on Thursday, resulting in a total market value loss of approximately $100 billion.
Despite Meta's announcement of a 27% revenue growth and doubled first-quarter profits, investors were spooked by CEO Mark Zuckerberg's warning that significant AI expenses will continue and it will take a considerable amount of time to achieve a return on investment.
The intensive costs and computing power required for advancements in new technologies mean that Meta's spending forecast for this year has increased from $35 billion to $40 billion.
Compared to Alphabet, Microsoft, and Snap, Zuckerberg presented his company's earnings differently, and concerns about fund utilization influenced the market and subsequent stock price loss. All tech competitors will continue to make significant investments in AI, but communication and presentation methods are equally important.
