Market Commentary

It’s All About Cloud: Microsoft Rises, Alphabet Sinks

Huzaifa Waseem
6 Feb 2024 · 1 minute read

Both Alphabet (GOOGL:US) and Microsoft (MSFT:US) reported better-than-expected results on the top and bottom lines. However, Google stock sank on weaker cloud growth, while Microsoft shares rose as the company’s Azure business experienced stronger growth.

This way, two of the tech industry's giants exhibited contrasting financial performances in their recent quarterly results. Microsoft received an unexpected financial boost from generative AI, while Google grappled with slowing growth in a core part of its business. 

Microsoft's shares surged by about 4% on the earnings news, contributing about $100 billion to its stock market value. In contrast, Alphabet, Google's parent company, lost approximately $100 billion in market capitalization, with its shares declining by more than 6% in early Wednesday trading.

Google's cloud computing division saw growth slow to 22%, falling short of the 26% that investors had anticipated. While this division constitutes only 11% of Alphabet's revenues, the disappointing cloud results impacted Alphabet's stock value. On the other hand, Azure's revenue rose 26% during the quarter.

Congressman Scott Franklin sold shares of both Microsoft and Google back in September. On the other hand, Senatore Markwayne Mullin reported he bought shares of both companies despite strong YTD performance. 

Both Microsoft and Alphabet are seen as major beneficiaries of the ongoing transition from general computing toward generative AI technology.