Microsoft Corporation (NASDAQ:MSFT)’s leading position in the artificial intelligence arms race and Google parent Alphabet Inc (NASDAQ:GOOG)’s flailing position in the cloud computer space were central talking points in the latest tech earnings season.
Microsoft, the world’s second-largest megacap, impressed the market, with revenue up 13% year-over-year to $56.5 billion, driven by its cloud division and its adoption of AI services powered by partner OpenAI.
Shares consequently moved 3.3% higher as a result, adding another $83 billion to the multi-trillion-dollar Redmond-based tech titan.
Meanwhile in camp Google, investors punished the search giant and world’s fourth-largest company for underdelivering in its cloud-computing segment, in a further sign that the gap is widening between it and Microsoft’s and Amazon’s bigger and better cloud services.
It felt like an overreaction to Google Cloud’s $200 million earnings miss (coming in at $8.4 billion instead of the Street’s $8.6 billion forecast) given the rest of the ship seemed in order.
Regardless, Alphabet shares fell 9% as a consequence when markets opened today, chopping as much as $160 billion from its valuation.
This journalist is far from a maths whizz, but these price movements suggest more than a $240 billion swing higher in valuation between Google and Microsoft.
It goes to show that, when playing with trillion-dollar multinational conglomerates, even minor share price fluctuations can make a gargantuan impact on the equities markets.