Microsoft, Google see gains as Al fuels cloud demand

Microsoft and Google owner Alphabet sent a clear message to investors on April 25: Our spending on artificial intelligence (AI) and cloud computing is paying off.

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The companies trounced Wall Street estimates with their latest quarterly results, lifted by a surge in cloud revenue - fuelled in part by booming use of AI services.

That sent shares of the companies up in late trading, with Alphabet soaring as much as 17 per cent and Microsoft gaining 6.3 per cent.

The tech titans have been locked in a fierce battle for dominance in the field of AI, with Microsoft joining forces with start-up OpenAI to challenge Google's two-decade stranglehold on internet search.

But their latest quarterly results showed there is ample room for both companies to grow.

Silicon Valley has hailed 2024 as the year that companies will begin to deploy generative AI technology that can create text, images and videos from simple prompts.

In back-to-back earnings calls, Alphabet and Microsoft executives said the programs are driving more business for their cloud computing units.

Corporate customers are more open to making long-term investments in their cloud infrastructure, said research analyst Tejas Dessai at Global X ETFs. That has helped make the sometimes-volatile industry more reliable.