Big Tech has eased investor concerns about its historic spending binge on artificial intelligence, posting quarterly results that surpassed expectations and showed early signs that AI is boosting earnings.

Alphabet, Meta and Microsoft were the clear winners, collectively adding more than $350bn in stock market value after reporting double-digit increases in revenue and net income. Microsoft became the second company to reach $4tn in market capitalisation, following chipmaker Nvidia, while Meta rose 11 per cent to just shy of $2tn.

Strong growth in Google and Microsoft’s cloud computing divisions and an uptick in Meta’s advertising margins were used to justify another massive increase in capital expenditure. The trio, along with Amazon, are on track to spend more than $350bn this year on data centres and other AI infrastructure and in excess of $400bn in 2026.