This week, many large tech companies presented their quarterly figures. AI investments dominate, but reactions to them vary greatly. Below, we discuss Microsoft, Alphabet, ServiceNow, Meta, and Samsung.
Microsoft reported revenue of €67 billion ($77.7 billion) and earnings per share of €3.21 ($3.72), both above expectations. In the short term, this is unlikely to wash away the aftertaste of the fact that Azure and Office 365 suffered an outage last night.
The Azure cloud division grew by 40 percent. CEO Satya Nadella emphasizes the importance of investment: “We continue to increase our investment in AI, both in terms of capital and talent, to capitalize on the enormous opportunities.”
AI spending rose 74 percent to €30.1 billion ($34.9 billion). The deal with OpenAI gives Microsoft a 27 percent stake in OpenAI, valued at €116.4 billion ($135 billion). The latter may be aiming for an IPO in 2026 or 2027 with a market value of $1 trillion.
CFO Amy Hood responds to concerns about an AI bubble. “Our need to expand infrastructure is enormous. That’s for business already booked, not for new orders,” she explains. According to her, Microsoft remains short on capacity despite substantial investments.
Read also: Intel continues to improve as quarterly figures impress
Alphabet breaks records with cloud and AI
Alphabet surpassed the $100 billion mark in quarterly revenue for the first time, equivalent to €86.2 billion. Revenue rose by 16 percent.
Google Cloud grew by 34 percent to 13.1 billion euros ($15.2 billion). Profits climbed 33 percent to 30.2 billion euros ($34.98 billion). This is despite a European fine of $3.5 billion.
The company plans capital expenditures of between 78.4 and 80.2 billion euros ($91-93 billion) for 2025. This money will mainly go to data centers and AI capacity.
ServiceNow grows thanks to AI adoption
ServiceNow exceeded expectations with revenue of €2.9 billion ($3.41 billion), an increase of 22 percent. Earnings per share came in at €4.16 ($4.82).
The annual contract value of AI activities exceeds €431 million ($500 million) this year. CEO Bill McDermott calls AI “the innovation opportunity of our generation.”
The company announced a 5-for-1 stock split to make the shares more accessible to retail investors.
Meta significantly increases AI spending
Meta saw revenue grow by 26 percent, but costs rose by 32 percent. CEO Mark Zuckerberg advocates “aggressively building capacity” to be prepared for superintelligence.
A one-time tax burden of $16 billion weighed on profits. Without this burden, net profit would have been $16.1 billion ($18.64 billion).
Meta increased capital expenditures to €60.3-62.1 billion ($70-72 billion) for this year. Personnel costs will rise next year due to the hiring of AI talent.
Samsung wants to compete with Qualcomm
Samsung is taking on Google. Its browser is coming to Windows as a first step toward “ambient AI.” The company is aiming for “intelligent browser experiences” that anticipate user needs.
The Galaxy S25 series used only Qualcomm chips. Samsung now plans to strengthen the Exynos processor for future flagships. There will also be more focus on HBM4 memory for AI applications. Traditionally
Revenue rose 15.4 percent to 52.2 billion euros ($60.5 billion). Operating profit climbed 160 percent to 10.5 billion euros (12.2 trillion won).
Market concerned about AI bubble
Wells Fargo analyst Scott Wren says investors want to see confirmation. “The market expects to hear that all AI capital expenditures translate into revenue and profit.”
The five largest tech companies are investing hundreds of billions in data centers and AI infrastructure for 2025. This is happening while concerns are growing about an AI bubble similar to the dot-com bubble of the 1990s.
Microsoft, Meta, Google, and Amazon are also preparing for cost savings. Amazon is considering cutting up to 30,000 jobs. For now, 14,000 jobs will disappear. Microsoft previously announced 9,000 layoffs. AI makes it easier for managers to replace human workers with automated systems; at least, that is the expectation. We are not yet convinced that this replacement will actually lead to success in the short to medium term.