Artificial intelligence boosts tech companies’ profits
The five tech giants posted a combined net profit of $225.658 billion (about 210 billion euros) in the first nine months of 2023, up 27% from the same period last year, thanks to the emergence of artificial intelligence (AI).
The combined revenues of Alphabet (Google), Amazon, Apple, Meta and Microsoft increased by almost 7% to $1.15 trillion, up from $1.07 trillion in the same period last year.
Along with the massive adoption of artificial intelligence, these companies also benefited from the good development of their cloud-related areas and the recovery of the advertising market, as well as the comparison with the previous year, when their profit fell by 19% due to the increase in expenses after the outbreak of the war in Ukraine.
In particular, the combined profits of these companies were boosted by the rebound of Amazon, which recorded a profit to September of 19.801 billion dollars, compared with a loss of 3 billion in the previous year due to the fall in value of the electric vehicle manufacturer Rivian.
In this line, the rest of the companies also improved their figures, although, in the case of income, Apple struck a discordant note after its turnover fell.
Apple, the company with the slowest growth
In the first nine months of 2023, Apple was the company whose profits grew the least, by 2.8 % to 66,997 million dollars, although it was the company with the highest profits in absolute terms.
The company’s profits were weighed down by a 1.6% drop in turnover, to 266.131 billion dollars, due to lower sales, especially of iPad tablets and Mac computers.
The other side of the coin was Meta, whose profit rose by 35% to 25.081 billion dollars, while it was the company with the highest revenue growth, up 12% to 94.791 billion.
The company, which owns social networks such as WhatsApp, Facebook and Instagram, was boosted by the increase in advertising, which offset the losses that continued to be caused by the big bet of its founder, Mark Zuckerberg: its Reality Labs metaverse division.
Microsoft’s net profit rose 19 % to 60.671 billion in the year to September, after its revenues grew by 9 %; while Alphabet earned almost 15 % more, to 53.108 billion, after a 7 % increase in turnover compared to the previous year.
A particularly good quarter
The summer months were very good for the tech giants, as their combined profit grew 45% year-on-year in the third quarter to $86.398 billion.
In fact, during this period, Amazon’s profit tripled to $9.879 billion, while Meta’s grew 164% to $11.583 billion.
For its part, Alphabet earned 41.6% more, with 19.689 billion; Microsoft, 27% more, with 22.291 billion; and Apple, 11% more, with 22.956 billion.
Compared to profit, the growth in the revenues of the big technology companies during this quarter was more moderate, although all except Apple improved their figures for the previous year.
Specifically, Meta’s turnover grew by 23% compared to the third quarter of 2022, Microsoft’s increased by almost 13% and Amazon’s rose by 12.6%.
Alphabet’s revenue was up 11%, while Apple’s revenue declined by 0.7% in the quarter ending its fiscal year 2023.
Artificial intelligence pushes hard
As happened in the previous quarter, artificial intelligence has become one of the big bets of technology companies, which are already beginning to reap the rewards.
Indeed, during the results presentation, Alphabet CEO Sundar Pichai attributed the results to “AI innovations in search services”, as well as cloud services and Pixel devices.
Microsoft chief executive Satya Nadella said they were “rapidly injecting AI into every layer of technology and every business role and process to drive productivity improvement”.
Meta, meanwhile, also pointed to progress in AI, while Amazon highlighted innovation in this area, in part thanks to its programming assistant, CodeWhisperer. EFE
