Big Tech's quarter in four charts: AI splurge and cloud growth

By Harshita Mary Varghese and Anhata Rooprai

Feb 6 (Reuters) - U.S. tech giants have predicted their spending would surge this year as ​they double down on artificial intelligence, sharpening investor scrutiny over ‌whether these costly bets would generate enough returns to justify the sector's high valuations.

The group - ‌including Alphabet, Microsoft, Amazon and Meta - is expected to pour more than $630 billion combined largely into artificial intelligence this year, even as returns so far have lagged the pace of growth in the outlays.

"Investors right now are not ⁠forgiving about large investments ‌without clear signal on return on invested capital," analysts at Morgan Stanley said.

Below is a snapshot of how the ‍companies fared in the December quarter:

CAPITAL EXPENDITURE

Amazon.com, once seen as a laggard in the AI race, is leading the charge with $200 billion reserved in spending. Alphabet is ​close behind with as much as $185 billion, while Meta has projected ‌up to $135 billion.

CLOUD REVENUE

Google Cloud notched the fastest growth among the three major U.S. cloud providers in the reported quarter with a rise of 48%.

While the business is smaller than its major rivals, strong adoption of the latest Gemini model has led some analysts to say that Alphabet has ⁠taken the lead in the AI race.

Amazon ​Web Services - the largest cloud player - meanwhile ​posted a revenue growth of 24%, while Microsoft's Azure reported a 39% increase.

UNEVEN PROFIT

Rising expenses weighed on profit growth at ‍Amazon and Meta ⁠in the quarter, while Microsoft reported its strongest profit growth in two years.

MARKET CAP GROWTH

Optimism about Gemini and Google's deal to power ⁠Apple's revamped Siri have also boosted Alphabet's share price, which has in recent months far ‌outperformed its rivals.

(Reporting by Harshita Mary Varghese and Anhata Rooprai ‌in Bengaluru; Editing by Sriraj Kalluvila)