Tech giants Microsoft and Google’s parent company Alphabet have announced strong earnings for the quarter, driven by growth in their cloud and artificial intelligence (AI) divisions.
Microsoft reported an 8% increase in revenue for the fourth quarter of its financial year, reaching $56.2 billion compared to $51.8 billion in the same period last year. The company attributed this growth to its cloud revenue and products backed by AI. However, Microsoft’s shares dipped 3.3% in premarket trading as it outlined plans for increased spending on AI, which could negatively impact its bottom line.
Alphabet Inc, the parent company of Google, also exceeded expectations with its second-quarter revenue of $74.6 billion, a 7% year-on-year increase from $69.7 billion. Like Microsoft, Alphabet’s strong performance was driven by its cloud and AI initiatives.
In other news, Snap Inc, the owner of popular photo messaging app Snapchat, reported revenue of $1.07 billion for the quarter ending June. This surpassed analyst expectations and was accompanied by a 14% year-on-year increase in daily active users on Snapchat.
Meanwhile, Indian edtech startup Byju’s founder and CEO Byju Raveendran has been facing numerous challenges, including a raid by the Enforcement Directorate over foreign exchange violations. The company has also been accused of hiding funds, leading to lawsuits from US-based investors.
In the IT services sector, India’s sixth-largest company Tech Mahindra recorded a 39% decrease in net profit for the quarter, compared to the same period last year. TechM’s revenue from operations rose by 4% year-on-year, but dropped 4.2% sequentially.
A report by strategy consulting firm Redseer highlights the significant role that India’s middle-income consumers will play in driving growth in the country’s $300 billion ecommerce market. The report projects that consumers with an annual income ranging from Rs 2.5 lakh to Rs 10 lakh will contribute nearly $135 billion, or 45% of the total gross merchandise value, to the ecommerce market by 2030.
However, the report also raises concerns about the rise of influencers with fake followers on social media platforms in India. More than half of all social media influencers in the country reportedly have non-credible or fake followers, which can harm brands’ return on investment and reputation.
Overall, the strong earnings from Microsoft and Alphabet demonstrate the significant impact of cloud and AI technologies in driving growth for these tech giants. However, challenges faced by companies like Byju’s and Tech Mahindra highlight the complexities and risks within the industry. Additionally, the need for transparency and authenticity in influencer marketing is becoming increasingly important for brands in India.
