Google-parent Alphabet surged 6% in after-hours trading as the tech giant posted third quarter earnings that smashed analyst estimates.
Alphabet reported earnings per share of $2.12 (£1.63), which was up 37% on the same period last year and beat expectations of $1.83, according to data compiled by Bloomberg.
Revenue came in at $88.27bn for the quarter, up 15% from last year and ahead of forecasts of $86.44bn in sales.
Google CEO Sundar Pichai highlighted the growth of the cloud unit in an earnings call on Tuesday, noting that the company's AI portfolio is attracting new customers and leading to larger deals. Cloud revenue came in at $11.4bn, up 35% from the same period last year, surpassing expectations.
Matt Britzman, senior equity analyst, Hargreaves Lansdown, said that better-than-expected growth in Alphabet's cloud segment "continues to support the argument that the major cloud providers are well-placed to benefit from the AI revolution".
"For Alphabet specifically, it looks like its cloud offering is much better suited to this new AI phase of growth than it was in the previous wave where Amazon’s AWS and Microsoft’s Azure fared better," he said.
"With valuations sitting where they are, and Alphabet having multiple routes to play in the AI world, this looks an attractive name from here."
Chipmaker AMD slid more than 8% in pre-market trading on Wednesday after the company issued disappointing fourth quarter guidance in its latest results.
AMD said it expected revenue to come in at between $7.2bn and $7.8bn, though investors were anticipating it to guide to $7.55bn.
For the third quarter, AMD posted adjusted earnings per share of $0.92, which was in line with expectations. The chipmaker reported revenue of $6.8bn for the quarter, beating forecasts of $6.7bn, based on Bloomberg consensus estimates.
Ben Barringer, technology analyst at Quilter Cheviot, said: “AMD delivered a decent set of numbers, but it is ultimately living in Nvidia’s (NVDA) shadow.
"This is making life difficult as comparisons are naturally drawn between the two businesses, when in fact they are at very different scales."
Chipmaker Nvidia, which is due to report on 20 November, has a market share of 75% to 90% of the sector.
"The more important factor for AMD is that it is gaining market share from Intel, taking advantage of it being a wounded beast and cementing its place as the second source for chips after Nvidia," said Barringer.
"All investors can ask for is for AMD to continue to beat its expectations and raise guidance, which it is doing, and eventually the comparisons to Nvidia should subside.”
Tech behemoth Microsoft is one of the Magnificent 7 group of stocks due to report on Wednesday, releasing its first-quarter results after the closing bell.
When it released its full-year results back in July, Microsoft guided to first quarter revenue of between $28.6bn and $28.9bn for its intelligent cloud business.
For its productivity and business processes unit, Microsoft said it expected revenue of $20.3bn to $20.6bn. The company then forecasted revenue of $14.9bn to $15.3bn for its "more personal computing" unit.
Shares in social media platform Reddit soared 23% in pre-market trading on Wednesday morning, on the back of its third-quarter earnings release.
Reddit turned its first profit in the quarter, reporting net income of $29.9m, up from a loss of $7.4m last year. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $94.1m.
The company posted 68% revenue growth to $348.4m, with ad revenue making up $315.1m of that figure.
Daily active users also increased 47% year-on-year to 97.2 million.
Steve Huffman, co-Founder and CEO of Reddit, said that the company had "achieved important milestones, including new levels of user traffic, revenue growth, and profitability.
"Reddit continues to be one of the most visited and trusted sites in the world with opportunities available to us that aren’t available to most companies."
For fourth quarter, Reddit guided to revenue in the range of $385m to $400m and adjusted EBITDA of between $110m and $125m.
Daily active users were also better than expected at 443 million, compared to forecasts of 441.16 million.
Looking ahead to the fourth quarter, Snap expects to report revenue in the range of $1.51bn to $1.56bn, against an estimate of $1.56bn.
Angelo Zino, senior equity analyst at CFRA Research, told Yahoo Finance: "A very big positive is what they're doing on the subscription side of things.
"That is growing better than we ever would have imagined four or five quarters ago."
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Other companies in the news on Wednesday 30 October:
