[OPINION] Alphabet and Microsoft: Searching for AI Monetisation

By Megan Stals, Market Analyst at Stake

While the hype around AI has been a key reason for driving collective upwards momentum in tech, earnings from Alphabet, Apple, Meta and Amazon suggest that we can expect to see certain names pull ahead of the pack in 2024.

Microsoft and Alphabet both showed strong numbers, but in the face of high expectations the stocks failed to rally in after hours trading. Google parent Alphabet exceeded earnings per share and revenue estimates, but search revenue narrowly missed expectations ($48 billion vs $48.15 billion), leading the stock to drop by around 6% in after hours trading.

While the miss on search was small, this may reignite fears that AI challengers could be slowly chipping away its search dominance. That said, the growth in Google Cloud improved this quarter, which bodes well for its ability to sell cloud services. Applications of its Gemini Pro large language model are just beginning to roll out, and this offers significant promise.