Earnings reports show how Big Tech is quietly seeing a digital ad boom

With the increase of the already breathtaking technology giants Spending on artificial intelligencetheir digital advertising business has also gained momentum.

Quarterly earnings reports this week from dead, Amazon, alphabet and Microsoft All of them showed good advertising revenue.

A rise in online ad sales allayed concerns earlier this year Economic turmoilamplified by the President Donald TrumpThe trade policies of, would negatively impact advertising budgets.

“I think the digital ad market is strong,” said Jasmine Enberg, co-founder of Scalable, a media company specializing in the creator economy. “I think this economic instability and volatility is taking a toll on a lot of people at this point; it seems to be kind of the status quo.”

Meta topped its competitors for the quarter with the fastest growth in ad-related sales.

The company’s total in the third quarter revenue, of which 98% comes from online advertising, The company’s sales jumped 26% year over year to $51.24 billion, the company’s highest sales since the first quarter of 2024.

Revenue in Amazon’s online advertising unit It increased by 24% year-on-year To $17.7 billion, which represents a faster growth rate than the company’s growth rate AWS Cloud Computing UnitWhich saw sales increase by 20%.

CEO Andy Jassy highlighted on Amazon’s earnings call that the company continues to expand its demand-side platform for advertising to include more third-party apps and sites.

“If you look at some of the partnerships we’ve done, the Roku partnership gives us the largest connected TV footprint in the United States,” Jassy said. “And on top of that, what we’ve done recently in providing our DSP clients with the opportunity to integrate with ad inventory at Netflix, Spotify and SiriusXM, it’s powerful.”

Comprehensive alphabet propaganda Third-quarter sales were $74.18 billion, an increase of 13% from $65.85 billion a year ago. Online ad sales on YouTube in the third quarter rose 15% to $10.26 billion.

Microsoft’s news and search advertising unit generated $3.7 billion in revenue in 2018 The company’s first fiscal quarteran increase of 14% from the $3.2 billion recorded in the previous year.

Even if there has been some decline in ad budgets due to economic uncertainty, companies have likely shifted some of that spending from traditional businesses like newspapers to digital ad platforms, said Jeremy Goldman, senior content manager at Emarketer.

“I think it’s a no-brainer what could happen,” Goldman said. “To invest your money in social media, to invest your money in retail media, to invest your money in search ad spend.”

It wasn’t just huge companies that showed huge growth in online advertising this week.

I replied on Thursday I mentioned 68% jump in third-quarter sales, beating analyst estimates. Global daily active items grew 19% year-on-year to 116 million, beating estimates of 114 million, the company said.

pop and Pinterest The results are scheduled to be announced next week.

Achieving significant progress in the field of artificial intelligence

The tech giants have all made clear that they do not see any broader economic concerns that would justify cutting their spending on AI, and instead raised their guidance for capital expenditures, despite fears that… bubble.

Alphabet, Meta, Amazon, and Microsoft collectively expect capital spending exceeding $380 billion this year, which still represents a small portion of capital spending. 1 trillion dollars Deals worth data centers and cloud computing that OpenAI recently announced with its partners such as Nvidia, oracle and Broadcom.

But while investors were cheering for Amazon and Google, they were less enthusiastic about Microsoft, especially Meta.

Shares of Facebook’s parent company fell 11% on Thursday after the company said it would raise its minimum capital expenditures guidance To between $70 billion and $72 billion from the previous range of $66 billion to $72 billion.

Oppenheimer analysts downgraded Meta shares to the equivalent of hold from buy, because they said it was unclear how the social media company would benefit from its investments in artificial intelligence compared to its big technology rivals that also operate cloud computing services.

“Significant investment in superintelligence despite unknown revenue opportunities reflects 2021/2022 metaverse spending,” Oppenheimer analysts wrote, which contrasts with the company’s significant AI spending in relation to its project. Super intelligence laboratories To lose her money Reality Labs DepartmentWhich manufactures virtual reality and augmented reality technologies.

Suzanne Lee, Meta’s chief financial officer, said Wednesday during a… Follow-up earnings call That it is important for a company to invest in AI-related data center and third-party cloud computing services or else it risks falling behind, echoes a similar comments Made by the CEO Mark Zuckerberg.

“The company’s top priority is to invest our resources to position ourselves as a leader in the field of artificial intelligence,” Li said. “That means I think in the coming period of time, we could see some financial pressure during which our operating earnings could be lumpy.”

Meta has continued to point out how its investments in artificial intelligence will improve its online advertising business, but it has more difficulty showing how that spending will benefit the company in the future, Enberg said.

“I think part of that is we’ve heard the story now quarter after quarter about their ability to integrate AI into their advertising business and use that as a growth driver,” Enberg said. “What comes next is harder to articulate, and much less clear to investors and other people following this space.”

However, Meta is seeing some growth in new products e.g Meta artificial intelligence Goldman said the app contains the short video service powered by Vibes AI technology.

The company could also still expand further into subscriptions or even offer enterprise AI services to sell to businesses, “an area they haven’t played at all,” he said.

For now, Meta’s digital advertising unit remains its core business, and like in previous quarters, it’s unclear how the economy will impact ad budgets.

As the holiday season approaches, all eyes will be on whether ongoing economic concerns or tariff-related price hikes will cause consumers to cut back on spending, which could impact companies’ marketing campaigns.

“The next test will be when we get to the Black Friday numbers,” Goldman said. “Will these fall short of expectations?”

He watches: Big Tech profits tell you, “These are the companies you want to own.”