Watch Paul and Scarlet LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Intelligence hosted by Paul Sweeney and Scarlet Fu -Mandeep Singh, Global Tech Research Head at Bloomberg Intelligence, recaps earnings from Meta and Alphabet. Meta Platforms shares plunged after the company raised its spending outlook for the year, driven by its AI strategy and higher component pricing and data center costs. Alphabet shares jumped after the company reported strong demand for its cloud and artificial intelligence offerings. -Anurag Rana, Bloomberg Intelligence Technology Analyst, recaps earnings from Microsoft and Amazon. Microsoft said cloud computing revenue and spending on AI infrastructure will accelerate this year, with Azure cloud unit sales expected to increase about 40% in the current quarter. Amazon.com is spending at a rapid rate to expand data center capacity to meet the intense demand for artificial intelligence computing power, fueling the fastest quarterly sales growth for its cloud unit in more than three years. - Sam Fazeli, Bloomberg Intelligence, Director of Research for Global Industries and Senior Pharmaceuticals Analyst, discusses earnings from Eli Lilly and Merck. Eli Lilly raised its annual sales and profit forecast due to high demand for obesity medications and its new weight-loss pill. Merck &amp; Co. reported first-quarter sales that beat Wall Street estimates as demand ramps up for newer products like Winrevair and an injectable version of cancer blockbuster Keytruda. -Christopher Ciolino, Bloomberg Intelligence Senior US Machinery Analyst, discusses Caterpillar earnings. Caterpillar&#x27;s shares surged after the company delivered stronger-than-expected quarterly earnings and raised its long-term revenue outlook, supported by fast-growing sales from construction and power generation equipment. See omnystudio.com/listener for privacy information.

Alphabet, Amazon Outpace Meta in AI During Earnings Bonanza 

Bloomberg Intelligence

# Full Transcript

**Podcast:** Bloomberg Intelligence

## Participants

- **Paul Sweeney** (None)
- **Scarlet Fu** (None)
- **Mandeep Singh** (Bloomberg Intelligence)
- **Anurag Rana** (Bloomberg Intelligence)
- **Sam Fezzeli** (Bloomberg Intelligence)
- **Chris Cialino** (Bloomberg Intelligence)

## Transcript

Audio Studios. Podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Yesterday, after the close, a lot of the big tech names reporting and it's kind of the market's kind

of trying to suss out some winners and losers. Google, I guess, on the plus side. Meta on the downside. So let's check in with Mandeep Singh. He does all the technology stuff for Bloomberg Intelligence. Mandeep, Meta trading down 10 percent. Let's start there. What's the market reacting to? Well, the market is reacting to the CapEx increase when they don't have much to show, unlike their hyperschool cloud peers who clearly have seen that top line benefit. I mean,

Meta's top line growth is very strong, you know, 33 percent at the $200 billion run rate is very impressive. It's just that when you look for that extra line item where AI is categorized separately, they don't have much to show for it. And right now, the growth in AI is around coding agents. So Meta has a model. They've released it. But it's not something that specializes in coding agent. They are

targeting more of the personalized super intelligence, personal assistant, that kind of a use case. And they just haven't given us enough in terms of a timeline when they will start monetizing that use case. So all in all, CapEx increased tied to memory components, not really tied to additional capacity. It was enough to cause this, you know, 10 percent drawdown in the stock. But overall,

fundamentals were still strong when they reported the quarter for their core business. Yeah, I guess investors don't like it to hear when the CEO is saying there isn't a very precise plan for how each AI product will be cultivated. Sounds too generic for their liking. We should mention as well, Meta is now looking to sell up to $25 billion in investment grade bonds to kind of fund out all those spending plans they have. Speaking of spending plans, Alphabet is increasing its spending

plans by, I think, about another $10 billion? Yeah. And look, when you compare the magnitude of increases from Microsoft, which raised almost, you know, by $35, $40 billion in CapEx, Meta raised it by over almost $20 billion. And that was mostly attributed to memory price increases. So the question is, why was Alphabet increased not of the same magnitude? Yes, they raised, but it was a very

slight increase. And that kind of goes to show that Alphabet, out of all the hyperscalers, has the best CapEx efficiency. They are able to use their comput...

Alphabet, Amazon Outpace Meta in AI During Earnings Bonanza

Transcript

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Alphabet, Amazon Outpace Meta in AI During Earnings Bonanza

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.