Tech giants turn their huge bets on AI into profits

Despite the economic uncertainty surrounding tariffs and their massive spending on artificial intelligence (AI) , Google , Meta (Facebook, Instagram) , Microsoft , Apple , and Amazon all delivered profits that beat expectations in the second quarter. “There are moments that will live on in the history books for a long time… and yesterday evening was definitely one of them, with the spectacular results released by Microsoft and Meta,” wrote Dan Ives, an analyst at Wedbush Securities, on Thursday, July 31.

Microsoft crossed the $4 trillion market cap mark for the first time on Thursday, becoming the second company to surpass this symbolic threshold after AI chip leader Nvidia .

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The IT group had just published a net profit of $27.2 billion for the period from April to June on Wednesday, up 24% year-on-year, and a turnover of $76.4 billion (+18%). Its cloud activities (remote computing and AI services for businesses) exceeded $100 billion in revenue for the fiscal year, more than Microsoft's total revenue ten years ago.

Meta also stunned Wall Street on Wednesday with its net profit, which jumped 36% to $18.34 billion, on revenue of $47.5 billion (+22%). Its CEO, Mark Zuckerberg, attributed this performance to the integration of AI into its content recommendation tools for users and the selection of advertising locations for advertisers, in particular. The world's second largest digital advertising company thus posted solid margins despite the steady increase in its spending on AI.

This is good news for the billionaire executive, who has his eye on "superintelligence," the hypothetical technology with cognitive abilities superior to those of humans, the Holy Grail of Silicon Valley. He recently hired employees from OpenAI, Anthropic, and Google at exorbitant prices, and wants to invest "hundreds of billions of dollars" in new data centers with cutting-edge chips and considerable energy resources.

Google also warned that its investments would increase further. Its capital expenditures are expected to reach approximately $85 billion this year, $10 billion more than planned, compared to $52.5 billion in 2024. This is particularly necessary for its cloud business, whose sales jumped 32% but which is struggling to meet demand.

The internet giant can count on its profits: $28.2 billion in the second quarter, for more than $96 billion in revenue (+14%). The search engine does not seem to be suffering from competition from ChatGPT or Perplexity for the moment, having itself integrated generative AI tools. "The market has not yet fully grasped the wave of growth that is looming, fueled by some $2 trillion in planned spending over the next three years by companies and governments to deploy AI technologies," observed Dan Ives.

Investors were also watching for possible impacts from the trade wars. Meta and Amazon appear to be benefiting from the policies of Donald Trump's administration for now. In this climate of uncertainty, advertisers have retreated to the social media giant's proven platforms.

Amazon.com, for its part, capitalized on the decline in Chinese competition in the United States, with Shein and Temu losing the customs duty exemption for small packages. The Seattle-based company also achieved better-than-expected results, notably thanks to AI tools for consumers and for businesses via AWS, its cloud platform.

But it is growing less quickly than its competitors Microsoft and Google. Amazon's forecast for the current quarter was disappointing. Its stock fell more than 6% in electronic trading after the close of trading on the New York Stock Exchange on Thursday.

Apple's quarterly results delighted the market despite the high cost of tariffs and its delay in AI. The Californian group reported net profit of $23.4 billion on Thursday (+9%), boosted by iPhone sales. It thus far exceeded forecasts despite an $800 million bill related to US surcharges. And the cost of these tariffs is expected to exceed $1 billion for the current quarter.