Mapping big tech’s quarterly results: Commerce shakeup, cloud boom & AI’s proving grounds

Revenues, generally, were high, and earnings for all five industry giants beat Wall Street projections. Advertising and product results were a mixed bag, and cloud computing remained a promising growth area.

And the big bets, of course, are all on AI.

Here are the key takeaways, and what the results, taken as a whole, suggest about the future of tech – and who might come out on top of the AI battles.

Alphabet: A strong showing tinged by disappointing YouTube ad revenues

Google parent company Alphabet reported its second-quarter results last week. Innovations in AI and Search bolstered the company’s top line.

Revenue and earnings both beat analysts’ estimates. Revenue reached $84.74bn, compared with a Wall Street projection of $84.19bn, while earnings per share for the quarter were $1.89, above an expected $1.84.

Google ad revenue for the period was particularly strong, tallying $64.62bn, up 10.5% from the same period last year. YouTube ad revenue, despite a 13% year-over-year (YoY) uptick, missed analysts’ projections.

Other growth drivers were Google Cloud, which topped $10bn in quarterly revenue for the first time ever, as well as Search, an area that Google has been investing in significantly, with the roll out of AI Overviews (previously called Search Generative Experience).

Looking ahead, Alphabet is looking to expand Waymo, its self-driving cars company, pledging $5bn in a new multi-year plan.

It will also keep betting big on AI as it goes head-to-head with Microsoft (OpenAI’s top backer) and a number of other increasingly formidable developers. In a letter to investors last week, CEO Sundar Pichai said: “We are innovating at every layer of the AI stack. Our longstanding infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead.”

Despite the fairly strong results, the numbers, when paired with Tesla’s lackluster Q2 earnings, catalyzed a dip across many big tech stocks last week. The S&P slid 2.3% and Nasdaq fell 3.6% in the aftermath, representing the largest single-day dip for both since 2022.

Microsoft: Big bucks, but a miss on cloud computing and AI

Microsoft filed its fiscal fourth quarter earnings on Tuesday. Total revenue for the quarter came in at $64.7bn, above a Bloomberg-reported Wall Street estimate of $64.5bn, and up more than 9% from the same period last year.

Meanwhile, earnings per share were $2.95, above projections of $2.94, representing a 15.1% year-over-year (YoY) lift.

Although both of these key metrics surpassed expectations, Microsoft’s cloud computing and AI results missed analysts’ expectations. The Azure cloud computing unit saw 29% growth, below the projected 31%. Plus, sales in the AI-focused Intelligent Cloud division – which includes the Azure public cloud, Windows Server, developer platform GitHub and AI initiative Nuance – tallied $28.52bn for the quarter. Though the figure represents a 19% YoY boost, it’s below the $28.68bn revenue estimated by analysts polled by StreetAccount.

Shares dipped about 7% on the heels of the announcement. Despite the mild cooling effect, some analysts are confident that Microsoft is headed in the right direction when it comes to AI. “We come away from the call optimistic about AI prospects on both the cloud and SaaS side as well as Microsoft’s ability to efficiently manage higher spending,” said Angelo Zino, vice-president and senior equity analyst at CFRA, an independent investment research firm, in a statement shared with The Drum.

CEO Satya Nadella expressed optimism about the coming months. “I’m energized about the opportunities ahead,” he said on a call with investors Tuesday. “We are investing for the long term in our fundamentals, in our innovation, and in our people.”

Meta: Strong numbers generate confidence, with AI in focus

Meta’s stock spiked more than 9% Thursday morning after the company posted strong quarterly results Wednesday, despite forecasting a significant rise in capital expenditures for 2025.

Revenue for the period was $39.07bn, up 22% YoY. The figure beat analysts’ estimates of $38.31bn. Earnings also surpassed projections at $5.16 per share, compared with an expected $4.73.

The company’s advertising business, which accounts for the majority of its revenues, performed exceptionally well, jumping 22% – especially notable in comparison to Alphabet’s 10.5% lift in Google ad sales.

These results, says Jeremy Goldman, the senior director of marketing, commerce and tech briefings at Emarketer are “a testament to Meta’s relentless pursuit of monetization.” He adds: “They’ve perfected the art of making every scroll and click count. Advertisers might as well hand over their wallets.”

The company expects to shell out big bucks in the coming year on augmented reality and metaverse technologies, in addition to AI (following the debut of its large language model Llama 3.1 in July).

In particular, CEO Mark Zuckerberg said the company plans to debut new AI tools for advertisers. On an investor call Wednesday, he said: “AI is … going to significantly evolve our services for advertisers in some exciting ways. It used to be that advertisers came to us with a specific audience they wanted to reach, like a certain age group, geography, or interests. Eventually, we got to the point where our ad systems could better predict who would be interested than the advertisers could themselves … Over the long term, advertisers will basically just be able to tell us a business objective and a budget, and we're going to go do the rest for them.”

A significant percentage of AI and metaverse investment will go to computing resources. In fact, CEO Mark Zuckerberg suggested that the next iteration of the Llama model will demand nearly 10 times the compute of the current version.

“Meta’s earnings call signaled how much expensive R&D still needs to go into AI,” says Martin SFP Bryant, founder of the tech newsletter PreSeed Now, and co-editor of the Geekout social media newsletter.

Meta’s stock is up 34% year-to-date.

Amazon: A rare revenue miss tempered by a cloud computing win

Amazon today reported an unusual revenue miss, leading to a 5% tumble in the stock price in after-hours trading.

Revenue for the period was $147.98bn, up 10% YoY, but failing to meet the projected benchmark of $148.56bn. Earnings per share for the quarter, however, surpassed expectations – reaching $1.26, versus a projected $1.03.

Some segments of Amazon’s business did exceptionally well. Amazon Web Services raked in $26.3bn – a 19% spike from last year. This was the third consecutive quarter in which the company’s cloud computing division grew significantly.

The company is also competing formidably in video streaming with Amazon Prime Video. And it was a notable quarter. It decided to make ad-supported streaming the default option for its 97.2 million Prime households. “This isn't just a power move – it's a declaration of war on ad-free competitors,” says Emarketer’s Goldman. Plus, he notes, “By slashing CPMs [cost per 1,000 ad impressions] to around $30, Amazon sent a clear message to Netflix and Disney Plus: adapt or perish. Watching these streaming giants scramble to lower their rates has been nothing short of entertaining.”

Amazon’s core revenue business is performing decently, but is fielding new challenges. Last month, the marketplace held its most successful Prime Day sales event to date. Sales in its online stores segment grew 5% YoY, while revenue from third-party seller services increased by 12%. However, consumer spending data indicates that shoppers are reaching for cheaper products, leading to a decline in Amazon’s average selling prices. Plus, the ecommerce giant is facing new levels of competition from dropshippers like Temu and Shein.

Chief financial officer Brian Olsavsky pointed to global events, including the Paris Olympic Games, to explain variance in consumer spending patterns during the quarter.

Amazon’s advertising revenue for the period was $12.77bn, just below the $13bn expected, but up 20% year-over-year.

“Amazon’s ad revenue continues growing, though not as much as expected. The company is focused on getting brands that don’t sell on Amazon to advertise with Amazon, which necessitates … offering comparable features to ad platforms like Google’s, Meta’s, and The Trade Desk’s,” says Nikhil Lai, a senior analyst at Forrester focused on marketing and media. Notably, Lai adds, the debut of Performance+ – a new Amazon campaign type that employs the company’s own data and machine learning capabilities for better targeting and optimization, claims to provide better transparency and control than Google’s Performance Max and Meta’s Advantage+.

The company’s forecasts for both revenue and operating income in the third quarter were lower than analysts’ estimates.

Apple: Plateauing iPhone sales offset by the promise of AI

Apple reported strong Q3 earnings today, surpassing Wall Street expectations with a 5% lift in revenue.

Revenue was $85.78bn, compared with Wall Street estimates pegging the number at $84.53bn. Earnings per share also came in above projections, at $1.40, compared with an estimated $1.35.

While iPhone revenue experienced a modest 1% YoY decline to $39.30bn, sales still outperformed projections. In contrast, iPad sales surged nearly 24% to $7.16bn, and Mac sales grew 2%, reaching $7bn for the quarter. Revenue from the company’s wearables, home, and accessories division dropped 2% to $8.10bn.

Apple’s services segment – which includes advertising – grew 14%, to $24.21bn, reaching an all-time high. Emarketer data indicates that Apple will generate about $10.58bn in ad revenues this year.

In terms of regional performance, China proved a sore spot for Apple, where revenue dipped 6% in light of intense competition. Nonetheless, CEO Tim Cook expressed confidence in the company’s ability to expand in the region, highlighting the high number of first-time iPad and Apple Watch buyers as a signal for potential market growth.

Like tech’s other titans, Apple has laser eyes on AI. At its developer conference in June, Apple unveiled Apple Intelligence, its AI play, which is focused primarily on personalization opportunities across device-level experiences. Looking ahead, it’s likely that the company views Apple Intelligence as the next frontier of revenue generation.

“Apple’s much anticipated AI features in iOS aren’t due to begin to roll out in the US until October, which will be at the end of the company’s next quarter,” says Bryant, the tech newsletter founder. “This means we might not know the true sales impact of these features until the following quarter.”

However, Bryant predicts that the investment in AI could ultimately help boost device sales, too. “Apple will no doubt trail the features heavily when it launches the next versions of iOS and the iPhone in September, which could well drive early sales of new iPhones,” he says.

Others agree that Apple’s ongoing investment in AI will likely be a boon for device sales and the business as a whole. “While discounted iPhone prices likely helped bolster sales this quarter, the company’s future success depends on two factors: keeping AI development costs low and ensuring that new AI-driven features compel price-sensitive consumers to upgrade their devices,” says Emarketer analyst Jacob Bourne.

Assessing the whole picture: AI in the foreground

Taken as a whole, quarterly results from the world’s biggest tech companies reflect a buoyant mood.

“Revenue rises for all [of these] companies show that big tech continues to get bigger, despite efforts to more tightly regulate these companies around the world,” says Bryant.

And ultimately, most of these players are “well-positioned” for ongoing growth, due to their strong data resources and advertising capabilities – in addition to other products and services, suggests Nicole Greene, vice-president, analyst at Gartner for Marketers.

Ecommerce trendlines are changing as consumer behavior evolves in response to economic conditions, a more competitive retail and commerce landscape and the genesis of alternative retail models.

Investments in cloud computing appear set to rise.

But the big story is, of course, AI. The technology will surely remain a central focus as tech giants grapple to get ahead. The ability to innovate and integrate AI across product offerings will likely become a significant determinant of competitive advantage.

The market, Bryant predicts, will be eager to see tech companies’ AI investments generate meaningful returns. “Investors are going to have to wait to see a significant financial life from the rise of generative AI,” he says.

Meanwhile, advertising models are shapeshifting as companies refine their strategies with AI and look to monetize attention in new ways. The changes, however, demand adaptability on the part of advertisers. As Greene, puts it: “GenAI is allowing for more quality, brand-differentiated content to be delivered to customers in context. Recent announcements are putting the advertising mix under even more scrutiny. These shifts require advertisers to reflect on their paid media mix and measurement approaches.”

In the longer term, who comes out on top in the AI races may be at least partially determined by the kinds of partners that buy in, Greene predicts. “While early adopter brands are seeing some of the immediate impact of tech giant investments in AI on business use cases – advertising and search in particular – which key partners brands choose to invest with across data partnership and ad spend will depend on the success of these early investments.”

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