Large technology companies have financial strength. They completed a record quarter for revenue and profits. Sales are growing due to the improvement in digital advertising, the rise of cloud computing and, most importantly, artificial intelligence. The latter has filled a majority of the calls with analysts from top executives of the companies who have been careful to assert their strengths in this technology and redouble their commitment to it, even in cases where it is at first glance less appreciated , like Apple or Meta. Adding to the business growth is margin improvement due to cost cuts after a poor 2022, which included tens of thousands of layoffs and other cost-cutting measures.
Overall, the total profit of the five most important technology companies (Apple, Microsoft, Alphabet, Amazon and Meta) rose by 45% to 86,398 million dollars (around 81,400 million euros per year) in the third quarter of the year. .current exchange rate). Each of the five companies broke their third-quarter earnings record. Sales growth accelerated in the third quarter despite Apple’s failure, which at least slowed the sales decline to just 0.7%. The others are growing in double digits.
The result for the full year is also on track to reach a new high and exceed the 2021 figures. In the first nine months of the year, the five companies mentioned earned $225,658 million, up 26.7% year-on-year. same period last year. Billings, again weighed down by Apple, rose 6.9% to 1.15 billion in the first nine months.
Microsoft is at the forefront of artificial intelligence
The best results were achieved by Microsoft. Its position is enviable in generative artificial intelligence, the technology that amazed the world with ChatGPT and which the company, a partner of OpenAI, integrates in one way or another into its various products and services. In addition, massive data processing, combined in part with artificial intelligence, is fueling its cloud computing business, where it is gaining ground on Amazon and distancing itself from Alphabet.
“We are rapidly introducing artificial intelligence into all layers of the technology platform and into all business functions and processes to increase our customers’ productivity,” Satya Nadella said in the conference call with analysts. “We have the most comprehensive cloud presence with more than 60 data center regions around the world, as well as the best AI infrastructure for training and inference. Additionally, our AI services are deployed in more regions than any other cloud service provider,” he boasted. Microsoft posted record sales and profits in both the third quarter and the full nine months. In the last quarter, the company reported sales of $56,517 million (+13%) and earned $22,291 million (+27%).
Although Alphabet was surprised by Microsoft and its subsidiary OpenAI’s advances in generative artificial intelligence and has since doubled its commitment to the technology, its cloud computing business’s numbers fell short of expectations, which was nevertheless punished by investors Its digital advertising business allowed it to achieve record sales ($76,693 million, +11%) and profit (19,689 million, +41.5%) in the third quarter.
The company that owns Google is integrating its Bard assistant into its services and testing the search engine. “By applying generative AI to search, we can address a broader range of information needs and answer new types of questions,” CEO Sundar Pichai told analysts. “As we expand access to our new AI services, we continue to make significant investments to support our AI efforts. (…) At Alphabet, teams look for ways to work as efficiently as possible while focusing on their highest priorities.”
The one that has benefited most from the cost cuts is Meta, which ended September with 66,185 employees, 21,000 fewer than a year earlier. Mark Zuckerberg promised to tighten his belt, and he did: “The Year of Efficiency has always had two distinct goals: to become an even stronger technology company and to improve our financial results so that we can invest aggressively in our ambitious long-term roadmap .” . “Now that we have overcome the key layoffs, the rest of 2023 will be about creating stability for employees, removing barriers that slow us down, introducing new AI-based tools to accelerate, etc.,” he explained Analysts.
Zuckerberg claims that “the two technological waves that we are immersed in are AI in the short term and the Metaverse in the long term.” Having put the Metaverse, which is currently ruinous for the company, on ice, the founder of Meta assures that he is already reaping the benefits uses artificial intelligence. “The investments we have made in AI over the years, including the billions of dollars we have invested in AI infrastructure, are clearly paying dividends in our ranking and recommendation systems, improving engagement and monetization.” said. As an example, he cited that AI-recommended content from accounts the user doesn’t follow is now the fastest-growing content category on Facebook, increasing overall time spent on the platform by 7%. By increasing sales (23.2% to $34,146 million) and cutting costs, Meta achieved an all-time quarterly profit record of $11,583 million, up 164% from a year earlier.
Amazon boss Andy Jassy also wanted to emphasize that artificial intelligence is bearing fruit beyond the data and cloud computing business: “All of our core businesses are working on generative AI applications to transform their customer experience,” he assured. Its applications include helping customers better find the products they want, predicting the inventory needed at their various locations, and deriving the optimal last-mile transportation routes for drivers to use. He also highlighted advances in advertising and his Alexa assistant, but admitted: “We still have a lot of work to do.” You’re in the best financial position to do that. Sales rose 12.6% to $143,083 million and profits rose 244% to $9,879 million.
Apple CEO Tim Cook also took pains to emphasize that the company’s products incorporate major advances in artificial intelligence, although he bragged less about it. “When we launched iOS 17, it included features like Personal Voice and Live Voicemail. AI is the basis of these functions. You can enjoy life-saving features such as fall detection, collision detection and ECG on the watch and on the phone. These functions would not be possible without AI. “We don’t label them as such because we label them based on their utility to the consumer, but the underlying technology behind them is AI and machine learning,” he told analysts.
Cook even suggested that Apple is also committed to generative AI. “Of course we are working on it. I won’t go into detail because we don’t really do that, but you can bet we’re investing. We’re investing a lot. Let’s do it responsibly. Over time, you will see advancements in products that have these technologies at their core,” he said.
The artificial intelligence race is full of multi-million dollar investments and multi-million dollar benefits. And the company that has seen the most growth thanks to the enormous processing demands that this technology brings has yet to present its results. This is Nvidia, the microprocessor developer, which will present its balance sheet on November 21st.
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