Story: AI is in the spotlight as the world’s top technology companies report earnings.
Both Microsoft and Meta beat expectations on Wednesday, but gave investors cause for concern.
The Windows maker said both earnings per share and sales beat expectations.
However, the company said it expects future growth in its cloud business to slow and will spend more on AI deployments than analysts expected.
Microsoft currently anticipates annual capital expenditures of $80 billion. That’s about $30 billion more than last year.
The huge spending has worried investors, with one analyst telling Reuters that the spending is likely to be a big drag on profit margins.
Meta also had a caveat.
Facebook’s parent company’s profits and sales also exceeded expectations.
But he warned that the costs associated with AI would “significantly accelerate.”
That has left investors questioning whether digital ad sales, the company’s main source of revenue, will be able to cover investments in new technology.
Facebook, which doesn’t have a cloud business, also faces questions about when it will actually benefit from AI.
Shares of both companies fell about 3% in after-hours trading following mixed messages from the tech giants.
The next day, Samsung’s third-quarter profits soared in Asia.
But the company warned that the pace of recovery is slowing as it struggles to capitalize on the AI boom.
Earlier this month, the South Korean company issued a rare apology for disappointing business results as it struggles to supply high-end chips to companies such as Nvidia.
Investors say it is being overtaken by local rivals SK Hynix and Taiwanese giant TSMC.
