Earnings Season Makes It Clear: AI Is the Only Game in Town

We’re roughly two-thirds of the way through the second-quarter earnings season, and the scoreboard doesn’t lie: AI is not just a line item in tech company presentations. It’s the engine driving the biggest corporate growth stories in a generation – from cloud computing and retail to healthcare, law enforcement, and beyond.

Artificial Intelligence is eating the world. And that explosive proliferation has cracked open a ‘technochasm’ that grows wider by the day…

I’m talking about a wealth divide unlike most anything we’ve seen before. The gap between tech companies and those falling behind has exploded, dramatically widening the schism between innovation investors and those stuck in ‘old-economy’ thinking. 

In short, if you’re not invested in AI, you’re not invested in growth, full-stop…

Meaning you’re at risk of landing on the wrong side of a rapidly widening wealth divide. 

Let’s break it down.

Alphabet’s AI Growth Engine Hits Overdrive

Alphabet’s (GOOGL) Q2 report wasn’t a beat; it was a slam dunk.

Revenue crushed estimates. Profits soared. But what really stood out was how AI has transformed every major Alphabet business unit into a growth machine.

Google Cloud revenues surged 32% year-over-year, driven almost entirely by demand for AI compute. Search and YouTube ad revenues both posted their best growth rates in several quarters – because artificial intelligence is making those engines smarter, faster, and more effective. (Translation: more money per user, per click, per second.)

The company’s AI video platform, Veo3, has already generated over 70 million videos in just two months. Meanwhile, its Gemini AI has rocketed past 450 million monthly active users, with daily requests up 50% quarter-over-quarter. 

That’s what exponential usage looks like.

In response, Alphabet hiked its capex guidance by another $10 billion – because it literally can’t build AI infrastructure fast enough to meet demand.

Even still, you don’t spend that kind of cash unless you know exactly what the future holds…

Microsoft’s AI Ecosystem Delivers Record Growth

Microsoft (MSFT) also dropped a haymaker on Wall Street this season.

Azure, the company’s cloud business, posted 39% year-over-year growth – its best performance since early 2024… and almost entirely AI-driven.

Revenues from Microsoft Fabric, its AI data platform, jumped 55%. Fabric now has 25,000-plus customers and holds the title of fastest-growing database product in company history. Considering Microsoft has lived through the PC, dot-com, and cloud booms… that’s quite a powerful indicator.

Then there’s Copilot, Microsoft’s flagship AI assistant suite, now with over 100 million monthly active users. In fact, all-in, more than 800 million people use a Microsoft AI product at least once per month.

Folks, the growth that this company is experiencing is more than the result of a new product cycle.

It’s a platform shift. And Microsoft is riding it to all-time highs.

How Meta Turned AI into a Revenue Multiplier

Similarly, Meta’s (META) AI strategy is paying off in triplicates: via engagement, ad dollars, and hardware adoption.

Time spent on Facebook grew 5% in the quarter. Instagram saw even better numbers, with engagement up 6%. 

This progress is directly tied to AI-powered content ranking improvements. Of course, more time spent on apps = more ads = more revenue. But it gets better.

Meta’s AI ad engine delivered a 3% boost in conversion rates on Facebook and a 5% bump on Instagram: massive numbers in the digital ad world.

Meanwhile, Meta AI – the company’s consumer-facing chatbot – now boasts over 1 billion monthly active users. 

Not to mention, the Ray-Ban Meta smart glasses are flying off the shelves, with sales tripling over the year. Demand continues to outpace supply. 

We see it as an indicator of what’s to come…