Big Techies surge after surprising investors, showing how low expectations have fallen

Scrollin’ with the homies… Investors sighed after Amazon, Alphabet, Microsoft, and Meta delivered better-than-feared quarterly earnings this week. Those four make up about 15% of the S&P 500, and their results lifted the broader market. “AI” was a favorite in earnings calls, with Microsoft mentioning it 50 times. Other highlights:

• Amazon unboxed expectation-beating revenue growth, helped by solid gains in its #ad biz. The Prime padre said AI investments have helped it surface more relevant sponsored listings.

• Meta spiked 15% after it surprised investors with its first quarterly sales growth in a year and gave upbeat guidance as it served up more ads. Time spent on Instagram surged 24% thanks to AI recs and TikTok-esque Reels.

• Alphabet popped after the Google parent beat expectations, though ad revenue and profit fell from last year as YouTube advertising sagged.

• Microsoft also topped estimates, though quarterly sales grew just 7% after previous years of double-digit gains. AI-powered Bing had 100M+ daily users.

From Insta Stories to industry stories… Tech earnings paint a broader picture of consumer and corporate demand. Some trends:

• Ad-pocalypse not now? Google said it’s still suffering from an ad pullback, but Meta pleasantly surprised. Social-media ad growth is expected to accelerate this year.

• AI on the prize: Meta CEO Zuck said AI recs were boosting social engagement, while Microsoft said bots would drive revenue growth in its productivity tools.

• Cloud growth is slowing for Google, Amazon, and Microsoft as companies cool their spend, but it held up better than forecast (Google finally turned a cloud profit).