Microsoft, Google Gain After AI Fuels Cloud Computing Demand (2)

Microsoft Corp. and Google owner Alphabet Inc. sent a clear message to investors on Thursday: Our spending on artificial intelligence and cloud computing is paying off.

The companies trounced Wall Street estimates with their latest quarterly results, lifted by a surge in cloud revenue — fueled in part by booming use of AI services. Alphabet shares surged as much as 12%, the biggest gain since July 2015, to their highest level ever. The rally pushed Alphabet’s valuation past $2 trillion. Microsoft rose as much as 3.5%.

Ruth Porat

Photographer: Chris Ratcliffe/Bloomberg

The tech titans have been locked in a fierce battle for dominance in ...