According to Blockworks, Alphabet's stock surged nearly 7% in early trading on Wednesday following better-than-expected earnings reported by Google's parent company on Tuesday evening. Alphabet attributed the positive performance to its investments in artificial intelligence, which have significantly boosted its Cloud and Search businesses by 35% and 12%, respectively, in Q3 2023. Google CEO Sundar Pichai highlighted the growing momentum and opportunities as customers increasingly adopt generative AI technologies.
The earnings report coincides with a surge in fundraising within the AI sector. Reports indicate that Elon Musk's AI startup, xAI, is in the midst of a funding round that could value the company at approximately $40 billion. This follows a $6 billion funding round in the spring that valued xAI at $24 billion. Additionally, OpenAI recently secured a $6.6 billion round, bringing its valuation to $157 billion.
Further excitement is anticipated in the tech sector with upcoming earnings reports from Meta and Microsoft. Analysts predict an 18% year-over-year revenue increase for Meta, driven by its AI-driven advertising strategies. Microsoft's third-quarter report is expected to reveal the integration of AI models from Anthropic and Google into its GitHub coding assistant. The after-hours trading session is expected to be eventful as these reports are released.