Microsoft and Google’s parent company, Alphabet, have both reported higher than expected revenue in their latest quarterly results.
Microsoft recorded revenue in the three months to the end of September of $56.5bn (£46.4bn), a 13% rise on the same period last year and better than the $54.5bn (£44.8bn) predicted by analysts.
It credited the strength of its cloud computing and PC businesses for the rise.
Meanwhile, Alphabet’s revenue for the same three-month period was $76.7bn (£63bn), an 11% year-on-year rise and also surpassing estimates that the figure would be $75.97bn (£62.5bn).
However, its performance was still dubbed “disappointing” after its cloud computing division reported revenue of $8.4bn (£6.9bn) – $20m (£16.4m) less than expected. The figure also represents quarterly growth of 22.5%, down from 28% in the previous three-month period.
Both companies reported their results at the close of the US stock markets on Tuesday afternoon.
In immediate after-hours trading, shares in Microsoft were up 5% – while Alphabet’s stock went in the opposite direction, falling almost 5%.
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It comes as tech firms race to harness artificial intelligence (AI), in an effort to boost profits and increase their range of services offered to customers.
The results revealed that revenue from Microsoft’s Intelligent Cloud unit, which houses its Azure cloud-computing platform, grew to $24.3bn (£20bn) – also better than expected.
While Microsoft is still developing many of its AI services, commentators expect Azure will play a key role.
The company has also secured an early march on its rivals by investing in startup OpenAI, owner of the popular ChatGPT chatbot service.
Jesse Cohen, a senior analyst at Investing.com, said the firm’s results “indicated that artificial intelligence products