With earnings that indicated major AI expenditures were driving growth, Alphabet and Microsoft on Friday spurred a rally in technology equities and dispelled concerns that their expensive projects would take years to pay off following a cautious prediction from Meta Platforms.

With a gain of almost $180 billion and a 10 percent increase in market value, Alphabet was able to attract investors with a $70 billion stock repurchase and its first dividend.

According to LSEG Datastream, the fourth most valuable company in the world toyed with the idea of closing above that level on an intraday basis more than three years ago.

Microsoft was expected to increase its market value by more than $80 billion and gain close to three percent.

Both Alphabet and Microsoft announced that their quarterly revenue growth was above forecasts as more consumers turned to services like the Copilot AI assistant and the Gemini chatbot, following billions of dollars being invested in the infrastructure required to enable AI apps.

According to Amy Hood, finance chief, artificial intelligence services contributed seven percentage points to Microsoft's Azure cloud computing platform's 31 percent revenue increase between January and March.

She also mentioned that the company's capacity was not fully meeting the near-term demand for AI, which hindered the company's development during the quarter and underscored the necessity of investing in infrastructure expansion.

With robust growth in Google Workspace, where the Alphabet subsidiary provides a plethora of AI services driven by its massive language model Gemini, cloud income at Google increased by roughly 28 percent.

The social networking behemoth Meta, whose stock fell 10 percent on Thursday, issued a warning about higher spending and slower-than-expected growth in contrast to the results.

The outcomes spurred a two percent rise in Amazon.com, which is scheduled to release its earnings on Tuesday. Thanks to the expectation that demand for their chips would be driven by the ongoing spending spree by IT giants, the stocks of AI chip manufacturers Nvidia, Broadcom, and Marvell Technology also saw gains of between one percent and two percent.