When it comes to the artificial intelligence gold rush, investors are opting for the perceived safety of the picks-and-shovels play rather than the miners. That could be a mistake.
The market had drastically different reactions to earnings from Microsoft and Advanced Micro Devices this week. The software and cloud giant run by Satya Nadella had a solid quarter. Revenue rose 15 per cent and net income increased 10 per cent to $22bn during the fiscal fourth quarter to June. Both numbers were slightly ahead of forecasts. Yet Microsoft shares fell in after-market trading.
Chipmaker AMD, seen as the closest rival to AI-chip leader Nvidia, also had a good quarter. Revenue rose 9 per cent while net income jumped to $265mn from $27mn in the year ago period. The stock gained 8 per cent after-hours.