Last night, Alphabet, Google’s parent company, surpassed a $2 trillion valuation as it announced its first-ever dividend payment. Alphabet’s shares surged over 12% to a record high, coinciding with the declaration of a $70 billion (£56 billion) share buyback plan.
Simultaneously, Microsoft shares rose following the announcement of record profits by the world’s most valuable company. Both tech giants overcame an earlier tech market slump triggered by concerns over the AI boom.
Alphabet reported a 15% increase in revenues, reaching $80.5 billion for the first quarter, with profits soaring 57% to $23.7 billion. The company introduced a quarterly dividend of 20 cents per share, resulting in a total payout exceeding $2.5 billion, and plans to continue these payments regularly. This follows Meta’s announcement of its first dividend in February.
Microsoft’s stock also climbed over 5% as its sales surged due to rising demand for its AI technology. Its quarterly revenues increased by 17% to $61.9 billion, and profits grew by 20% to $21.9 billion.
Concerns linger around Google potentially lagging behind entities like OpenAI, creator of the popular ChatGPT, amid fears that AI advancements could challenge its dominant search engine. Conversely, Microsoft has emerged as a major beneficiary of the ChatGPT phenomenon, incorporating the technology into many of its products and recently surpassing Apple as the top-listed company globally.
However, investor scepticism persists regarding whether the excitement and substantial investments in AI are yielding significant revenues.
These developments followed a broader tech downturn earlier in the day after Meta reported underwhelming results, causing the Nasdaq to drop as much as 2%. This occurred after Meta’s CEO, Mark Zuckerberg, experienced a personal loss exceeding $17 billion when Meta’s shares plummeted by 10%, following his announcement of significant investments in AI.
This week, the billionaire, who derives nearly all of his wealth from his company shares, was surpassed by Elon Musk as the world’s third-richest person, following a surge in Tesla’s stock that aided its recovery.
Following a significant drop in share prices last night, Mr. Zuckerberg’s net worth is now estimated at around $150 billion. As of yesterday, Mr. Musk’s fortune stood at approximately $179 billion.
Meta’s market value plummeted by over $100 billion as investors recoiled at Mr. Zuckerberg’s ambitious spending plans on AI technology.
