Google owner Alphabet and Microsoft both fared better than expected last night, in a change of fortunes for the embattled tech sector.
Alphabet pulled in revenues of £56.2billion in the three months to March – edging just above the £56billion analysts had expected.
Profits slid to £12.1billion, compared to £13.25billion a year earlier – but beat analyst estimates of £11.1billion.
£182m payday: Google owner Alphabet, led by Sundar Pichai (pictured with his wife Anjali) pulled in revenues of £56.2bin in the three months to March
Alphabet said its board of directors had given the green light for £56.4billion in share repurchases – which could result in the same pace of buybacks as last year.
Google has felt the strain of slowing advertising spending, driven by global economic uncertainty, in recent years.
But Alphabet chief executive Sundar Pichai, who recently landed a £182million pay package, said in a statement: ‘We see huge opportunities ahead, continuing our long track record of innovation.’
Microsoft also said late yesterday that its revenues were up 7 per cent year-on-year to £42.6billion in the three months to March, beating analysts’ expectations of £41billion. Profits also increased by 9 per cent to £14.8billion, above the £13.3billion estimated.
The company has previously suffered the wrath of businesses pulling back on spending, especially across cloud services and software licences. But yesterday it pointed to growth in cloud computing sales.
And Satya Nadella, Microsoft chairman and chief executive, said a ‘new era of computing’ was on the way and that his firm was the ‘platform of choice’ for customers interested in artificial intelligence (AI).
Shares in the two tech giants – which released results after the US stock market closed on Tuesday – were up in after-hours trading.
Although both companies have doubled down on AI investment in recent months, they have also been on a mission to drive down costs.
Alphabet announced it would be laying off 12,000 employees worldwide, while Microsoft has let go around 10,000.
