Investing.com -- Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.

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Microsoft’s Azure could become the ‘biggest hyperscale provider’

Shares of Microsoft (NASDAQ:MSFT) rose higher on Friday after the world’s largest company unveiled its fiscal Q1 earnings, beating Wall Street estimates.

The print further highlighted Microsoft’s unique position as an AI frontrunner, showcasing strong demand for its AI-powered services, which played a crucial role in the better-than-expected performance of its key Azure cloud business.

Looking ahead, the company’s CFO Amy Hood said that capital expenditures would increase "materially" to accommodate the rising demand for its generative AI products.

Bernstein analysts viewed this as an indication that Microsoft's leadership foresees a "line-of-sight" to a "significant" increase in cloud revenue.

"We also see this as an indicator that Microsoft has taken the AI mantel, and Azure could become the biggest and more important hyperscaler provider," the Bernstein analysts said in a note to clients.

"If this trend continues, then AI will be a large driver of Azure's long term revenue and will require re-evaluation up of Azure's potential size,” they added.

Google is ‘one of best positioned AI competitors,’ says BMO

Shares of Alphabet (NASDAQ:GOOG) soared to a new record high on Friday following a 10% jump driven by a stronger-than-expected earnings report for the fiscal first quarter of 2024.

Apart from beating Wall Street’s forecasts on top and bottom lines, the Google (NASDAQ:GOOGL) owner also announced its first-ever dividend of 20 cents per share, and authorized a new $70 billion stock buyback program, attracting further investor attention.

Moreover, the company said its capital expenditure (CapEx) surged to $12 billion during the period as it continued to invest heavily to improve its generative AI capabilities.

Commenting on the print, BMO Capital Markets analysts said they view Alphabet “" as one of the best-positioned AI competitors."

"1Q24 highlighted effective monetization of the new GenAI platform shift. Search & Other, YouTube Ads, and Google Cloud exceeded our growth expectations by 260bps, 720bps, and 190bps, respectively, attributable primarily to GenAI products," they noted.

Rosenblatt lifts Meta stock PT on higher CapEx outlook

Meta Platforms (NASDAQ:META) unsettled investors on Wednesday by forecasting higher expenses and lighter-than-expected revenue, which led to a nearly $200 billion reduction in its stock market value.

Concerns have risen that the increasing costs of AI development may outweigh its benefits, sending the company’s shares tumbling about 15% in extended trading and bringing its market capitalization down to around $1 trillion.

However, the announcement did not stray Rosenblatt analysts from reiterating their bullish views on Meta.

The investment banking firm upped its target price on the stock from $520 to $560.

Rosenblatt said Meta’s report showed that the company’s revenue growth outlook for the current quarter is strong, but decelerating.

Still, its analysts believe the highlight of the report was Meta’s plan to ramp up spending.

“The low end of guidance for 2024 total expenses of $96-$99 billion was hiked $2 billion, for a growth range of 15% to 19% Y/Y, with Meta citing higher infrastructure costs (AIdriven) and legal costs,” they wrote.