Reading guide:Silicon Valley is not big, creating myths.
Author: Jessica
Article**: Si-Planet
Silicon Valley seems to have reached another fever pitch. In the past few days, the four major Internet giants in the United States, Microsoft, Google, Apple and Meta have submitted quarterly revenue answers one after another, starting a performance showdown
Meta successfully counterattacked, and its market value soared by $197 billion overnight, setting a record for the largest single-day growth;
Microsoft has hit a record revenue record for five consecutive quarters, adding $3 trillion, replacing Apple as the world's most valuable company;
Google Cloud Services continued to rise, achieving full-year profitability for the first time, and continued to increase investment in the AI arms race;
After Apple reversed the decline in the fourth consecutive quarter, it directly grabbed everyone's headlines, and the latest MR headset Vision Pro was officially released, landing strongly in official retail stores in the United States, blowing a whirlwind of panic buying.
It's been a long time since I've seen this scene.
One
Meta threw money into open-source AI, and Zuckerberg turned over
Three years ago, Facebook turned into Meta and went all out to bet on the metaverse, but its stock price and performance were "Davis's double kill". In the first 11 months of 2022 alone, the market value fell by 70%, with a blood loss of $600 billion, directly squeezed out of the ranks of the world's top 20 companies, and Zuckerberg's personal wealth also evaporated by more than $100 billion.
Later, Xiaozha adjusted the focus of his business, returned to social media and made a strong foray into artificial intelligence, and finally turned around on the 20th anniversary of Facebook this month and came up with the strongest financial report in history.
According to the data, Meta's revenue in the fourth quarter was 401US$100 million, a year-on-year increase of 25%, and net profit of US$14 billion, more than tripled over the same period last year. In addition to Reality Labs, the metaverse division continued to lose 46In addition to $500 million, Lu Run, an advertising and social media family, both exceeded expectations, and the number of daily active users increased steadily to 21100 million, with 30 monthly active users700 million.
Meta's shares surged 15% after hours following the earnings report, and have tripled since bottoming out in November 2022, outpacing all of the S&P 500 except Nvidia. At the same time, it announced an additional $50 billion** buyback and a 50-cent dividend per share for the first time in the company's history.
Zuckerberg believes that artificial intelligence is behind the improvement of the advertising business. Meta has been expanding its core advertising business by improving ad targeting, AI-recommended content, and the infrastructure needed to run it, which paid off in the quarter, with the average daily time spent on the company's apps increasing by 25% compared to the same period last year. Meta CFO Susan Li also said that the significant increase in Q4 revenue is due to AI recommended content** and high spending by Chinese business owners.
In addition to AI content optimization, Meta's determination in the artificial intelligence track is far more than that.
Zuckerberg has plans to spend trillions of dollars with Google, Microsoft, and OpenAI as the company's next goal. Regardless of the mainstream market trend, Meta has chosen to take a maverick all-open source path, believing that this open strategy will be more conducive to promoting technological innovation and building a thriving developer community, its large language model LLAMA2 has been free for research and commercial use, and the new generation of LLAMA3 is also being trained.
Xiaozha also announced the reorganization of key AI research units and the continued replenishment of the "ammunition depot" stockpile. By the end of this year, Meta will purchase about 350,000 Nvidia H100 GPUs, plus other potential ** vendors and self-developed AI chips, with a total of equivalent computing power equivalent to 600,000 H100.
According to Reuters, Meta will officially put into production the second-generation self-developed AI chip Artemis this year, which will be used to complement H100 and deploy its data center inference tasks, and the company's spokesperson also confirmed this chip plan. It is also rumored that Meta is also working on a more sophisticated processor that can perform AI workloads, with the ultimate goal of developing something that can rival Nvidia's GPUs.
In the future, Meta will continue to increase investment in artificial intelligence and commerce, while streamlining operating costs. After the Waterloo of the metaverse, Zuckerberg quickly adjusted the capital expenditure structure with the assistance of the new Chinese-American CFO Susan Li, setting 2023 as the "efficiency year", cutting 10,000 team employees and freezing about 5,000 unfilled vacant positions, finally turning the company around and resuming strong revenue growth.
At the post-earnings conference, Zuckerberg said that the scale of new employee introductions in 2024 will remain as low as possible. Susan Li also reported to Wall Street an estimated spending of $30 billion to $37 billion under the guidance of cost reduction and efficiency improvement goals, and the increase is mainly used to strengthen research and development in the field of AI, which greatly encouraged investor confidence.
After going the right way, Zuckerberg has turned around among shareholders and returned to the trillion-dollar market value club with Meta.
II
Google vs.Microsoft: The AI arms race continues to kill
Although it is not as big as Meta's counterattack, Microsoft and Google's financial report data this time are also very good, the development momentum is stable, and all key performance indicators have exceeded Wall Street expectations.
Google generated $86.3 billion in total revenue in the quarter, up 13% year-on-year, and net profit surged 50% year-on-year to 206$8.7 billion. However, the stock price closed down 6% on the earnings day after five consecutive trading days after holding strong for five consecutive trading days, but the revenue of the pillar advertising business, which accounts for 80% of the revenue, fell less than expected, and the capital expenditure surged by nearly half from the previous quarter.
Microsoft's results are even more impressive: total revenue of $62 billion and net profit of $21.9 billion, up 18 and 33 respectively from the same period last year, setting a new growth rate in two years. For the first time, under the leadership of current CEO Satya Nadella, it broke through the $3 trillion mark with its head held high, overtaking Apple to become the world's most valuable company.
Driven by the AI wave, both companies' cloud segments have shown positive signs. Google Cloud revenue continued to grow to $9.2 billion, making it profitable for the first time for the full year. For Microsoft, today's cloud services have become the vanguard of the entire business system. Microsoft's intelligent cloud division, which includes Azure, servers, GitHub, and enterprise services, has earned 258 in a single quarterWith a revenue of 800 million US dollars, it has become the leader in the contribution list of the whole factory.
The potential of the cloud computing market is increasing day by day due to the necessary resources, data processing capabilities, and an innovative environment for AI development. After Microsoft made the first move to enter OpenAI, the $13 billion bet finally paid off. Amy Hood, the company's CFO, said at the conference that Azure cloud product sales soared 30% in the quarter, with 6 percentage points coming from AI demand, which is twice the contribution of AI to Azure in the previous quarter. The vast majority of the increment is due to OpenAI's inference calls on the Azure cloud. CEO Nadella also revealed that Microsoft now has 5One-third of the 30,000 Azure AI customers have joined in the last 12 months.
In addition to Azure cloud services, Microsoft's AI strategy also includes a series of ChatGPT-based Copilot AI software assistants, with full access to its popular productivity office suite, Microsoft 365. In terms of AI computing power deployment, Nadella announced the launch of two self-developed AI chips, MAIA 100 and COBALT 100, at the Ignite developer conference held in Seattle in November last year, to cope with the challenge of increasing large model training costs and get rid of the passive situation of being constrained by NVIDIA.
In the earnings quarter, Microsoft completed a $65 billion acquisition of Activision Blizzard and spent $11.5 billion on AI infrastructure such as cloud services and data centers. Nadella insists on continuing to be bullish on AI technology development, arguing that the market has shifted from talking about AI to applying AI at scale. We will continue to invest in new customers, efficiency, and productivity by integrating AI into every layer of the technology stack.
As one of the strongest competitors in the field of artificial intelligence with Microsoft, Google has also integrated the multi-modal large model Gemini launched at the end of last year into the chatbot Bard, and developed a series of AI suites such as the Vertex AI platform for deploying machine learning, Duet AI on Google Cloud, and self-developed TPU chips with high performance. While Microsoft brought OpenAI under its command, Google did not show weakness and handed an olive branch to Anthropic with an investment of more than $2.5 billion.
Sundar Pichai, CEO of Google, is determined to keep the big model as the metaverse and battle it out in the AI battle, saying that the company will focus on investing in the AI business and embedding new generative AI tools into more key products. He also said that AI is driving the growth of advertising traffic across Google's platforms, and looks forward to the surprises that Gemini Ultra will bring to the market after its launch: "We are pleased with the continued strong performance of search and the continued contribution from YouTube and the cloud. These areas are already benefiting from our AI investments and innovations. As we enter the Gemini era, the best is yet to come. ”
Three
Apple is eyeing me and saying that I am lagging behind, so I might as well wait and see
While people are amazed by the proud performance of Meta and Microsoft, the report card of Big Brother Apple seems a little "shy".
According to the latest quarterly earnings report, Apple's revenue for the quarter was $119.6 billion, exceeding expectations of $117.9 billion. $69.7 billion of that came from iPhone sales, far exceeding the previous forecast of $68.6 billion, but the total revenue in Greater China fell 13% due to sluggish sales from China. However, the positive news is that its active device base has exceeded 2.2 billion units, and its subscription services have also achieved 11% year-on-year growth, and Apple has finally reversed the fourth consecutive quarter of revenue decline.
Despite this, Apple still gained monstrous attention with the new generation of MR headset Vision Pro and grabbed the headlines. The brand, which has been called Apple's "most risky revolutionary product in 20 years," was officially launched on Friday local time. Customers who have previously placed orders and pre-orders will start receiving or picking up their orders at Apple offline retail stores.
Apple CEO Tim Cook arrived at Apple*** on Fifth Avenue in New York City on Friday morning to witness the launch of Vision Pro with the flocking fans. For the Vision Pro's $3,499 luxury**, what Cook calls "today's technology of tomorrow" is worth paying the bill.
While others are competing in the AI race, Apple seems to have no sense of urgency and is absent from the generative AI revolution. However, the new generation of spatial computing products introduced to the market, Vision Pro, is indeed regarded as a product that opens a new era of mixed reality. It indicates that the company, which takes mobile phones and computers as its home job, is quietly changing its product structure and has begun to try to increase its layout in the field of "AI+" integration of AR VR. Various AI functions such as digital doppelgangers, emotion detection, and intelligent interaction introduced in the device will also become a springboard for Apple to enter AI in 2024.
Two weeks ago, Bank of America upgraded its rating and price target on Apple, arguing that the Vision Pro headset "demonstrates a roadmap for AI products with a bright future and will be a key catalyst for the company's future growth."
In addition, Apple plans to unveil a series of new generative AI-based tools at the Worldwide Developers Conference (WWDC) in June 2024, including an upgraded version of Siri. These new tools will also be a core feature of iOS 18. Everything is becoming more exciting.
In just one week, the financial results have been invigorating the market, new products have exploded and landed, and the dizzying amount of information has made people have stronger expectations for the future.
There is no doubt that the prospect of AI technology is more optimistic about the technology giants than anything new, and increasing R&D and capital investment, attracting star AI companies to stand in line, seizing the AI ecosystem, and optimizing spending to reduce costs will be the key territory for large manufacturers to continue to compete fiercely.
For the "screws" of technology companies, layoffs and cost reduction are bound to become an inevitable and heavy topic in this round of transformation. Everything is new, and everything is full of unknowns. This is the best era for tech giants, and it may also be the worst for ordinary employees. (The author of this article, Jessica, ** in Silicon Star Pro, the web3 boss has been authorized by the author, edited and published by the web3 boss, and the views in the article are the author's views and do not represent the views of the web3 boss.) ）