Alphabet, Microsoft shares jump as investors cheer AI investment

LONDON (Reuters) — Microsoft and Google showed investors that heavy artificial intelligence investment can pay off with rising revenue, allaying concerns raised a day earlier by Meta, which said its expensive foray into AI was not immediately paying off.

Shares in Google-parent Alphabet were up over 11% in extended trading on Friday, while Microsoft shares rose nearly 5%.

That contrasts with a more than 10% slide in Meta shares on Thursday, after the social media firm signalled its costly bet on AI could take years to pay off.

Microsoft beat Wall Street estimates for third-quarter revenue and profit on Thursday, driven by gains from adoption of artificial intelligence across its cloud services.

Alphabet announced its first-ever dividend on Thursday and a $70 billion stock buyback, after beating expectations for the quarter in sales, profit and advertising.

(Reporting by Samuel Indyk; Editing by Amanda Cooper)