Google parent Alphabet sank 8.6% to three-month lows as its cloud business posted its slowest growth in at least 11 quarters.
“Investors are concerned that Alphabet is losing ground to Microsoft and Amazon in a sector seen as having huge growth potential due to the future adoption of generative artificial intelligence,” said Trade Nation’s David Morrison.
Microsoft, for its part, rose 3.8%, to a three-month high, after exceeding expectations for first-quarter results in all segments, including its cloud business.
Microsoft is overtaking Alphabet in the race to make money with generative artificial intelligence thanks to its early bets on OpenAI and its focus on large customers, raising fears that Google’s parent company could lose share in the computing market in cloud.
“Tech sector earnings got off to a mixed start last night, thanks to the focus on cloud computing, one of the sector’s big revenue sources,” said Chris Beauchamp of IG Group.